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To: jwk who wrote (3832)	10/26/1999 9:30:00 PM
From: Labrador	Read Replies (1) \| Respond to of 4122

Revenue projection numbers looked tasty [decided to take a look at the 10-K] Just a little behind schedule -- can you believe that just about 2 years ago, they were projecting earnings of $85 million in 2000!!! We entered into an agreement with The Hawke Group to provide financial public relations from October 15, 1997 to April 15, 1998. As part of their financial public relations engagement, The Hawke Group requested pro-forma projections for their Stock Highlights page. The Company furnished estimated revenues and pre-tax income in October 1997. The projections were based on statistics published in Diagnostic Imaging, an imaging trade journal, and our estimate of the number of CTLM(TM) Systems that could be sold. IN October 1997, the Company believed it could capture 30 units representing $7.5 million of the worldwide mammography market of $400 million in the first year. The domestic market represented a mammography market of $150 million. In the second and third year, the Company estimated that it could sell 75 and 186 foreign units and 135 and 300 domestic units, respectively. The Company believed it could achieve these projections because of the delivery of the laser components from Spectra-Physics in October 1997, which would enable it to resume clinical investigational trials and build a clinical atlas of case studies. Our Pacific Rim distributor representing thirteen Asian countries had stated that they were willing to purchase ten CTLM(TM) Systems immediately once we couLD provide a CD-ROM of clinical cases. We also had specific indications of interest for an additional twenty CTLM(TM) Systems which were TO be sold in the Pacific Rim once the initial atlas was updated to include clinical data collected from the first ten Pacific Rim countries. Although FDA export is required for any exportation of the CTLM(TM), FDA marketing clearance is not required for Pacific RIM countries. Concurrent with the foreign sales, we believed we would have at least three clinical investigational sites in the United States providing the data required for Pre-Market Approval (PMA) from the FDA. Over the next few years, industry predictions are that mammography sales will increase due to replacement of older systems. The third year after the introduction of a new medical imaging device usually creates a demand as imaging centers and hospitals feel that they will lose market share if they cannot provide the new technology to their patients. New technology generates new business as experienced with MRI. A forward-looking disclaimer was included directly below the projections. In February 1999, the Company, in an interview with the Miami Herald affirmed the basic projections qualifying them by stating that the results were anticipated for the fiscal year ending June 30, 2000. Below is a comparison of the Hawke Projections and the February 1999 Projections. <TABLE> <CAPTION> HAWKE PROJECTIONS FEBRUARY 1999 PROJECTIONS <S> <C> FISCAL YEAR 6-30-98 FISCAL YEAR 6-30-00 30 foreign units at approximately $250,000 30 foreign units at approximately $250,000 per unit per unit no domestic no domestic estimated revenue $7.5mm estimated revenue $7.5mm pre-tax income ($4mm) pre-tax income ($4mm) FISCAL YEAR 6-30-99 FISCAL YEAR 6-30-01 75 foreign units at approximately $250,000 75 foreign units at approximately $250,000 per unit per unit 135 domestic units at approximately $350,000 135 domestic units at approximately per unit $350,000 per unit estimated revenue $65.9mm estimated revenue $65.9mm pre-tax income $32mm pre-tax income $32mm FISCAL YEAR 6-30-00 FISCAL YEAR 6-30-02 186 foreign units at approximately $250,000 186 foreign units at approximately $250,000 per unit $350,000 per unit 300 domestic units at approximately $350,000 300 domestic units at approximately per unit $350,000 per unit estimated revenue $151.5mm estimated revenue $151.5mm pre-tax income $85.9mm pre-tax income$85.9mm </TABLE> Due to the delay in the commencement of the Nassau County clinical investigational trials, we are unable to determine when we anticipate FDA marketing clearance or will be able to begin foreign distribution, since we have deferred foreign distribution of the CTLM(TM) until such time as we have collected enough clinical data to compile an atlas of CTLM(TM) images. The delay in the commencement of the Nassau County investigational trials has made the February 1999 revenue projections unattainable and we are presently unable to determine when it will begin to generate revenue.