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Microcap & Penny Stocks : IMDS nasdaq bulletin board -- Ignore unavailable to you. Want to Upgrade?

To: Dan O who wrote (3067)	4/2/1999 11:57:00 AM
From: Labrador	Read Replies (1) \| Respond to of 4122

Nasdaq Listing Lives-- Don't Give Up The Ship Yet!! This was in the most recent proxy (filed in Jan 1999) On June 11, 1998, the Company filed an Application for Review before the United States Securities and Exchange Commission to appeal the Decision of the Council. The basis for the appeal was that the Council erred in affirming the Panel's decision placing conditions upon the Company's initial inclusion. The Company contends that; (i) it did satisfy all the listing requirements on a timely basis but was initially rejected for listing by the Nasdaq Staff and Panel on grounds that were ultimately reversed by the Committee in the first appeal; (ii) that the Company satisfied the listing requirement and this fact was so recognized in the Committee's Decision in the first appeal; (iii) that due to the four month delay cased by the Nasdaq Staff; dilatory review process, and the irresponsible remarks made by a Nasdaq Staff member to Barron's, the price of the Company's stock declined below the initial listing requirement (but remained well above the maintenance requirement). Based upon price deficiency alone, the Company was denied listing. On August 8, 1998, the Company filed it's Brief in Support of Application for Review. Nasdaq's brief was due on September 10, 1998 and filed on September 15, 1998. On September 25, 1998, the Company filed its Reply Memorandum to the Brief of the Nasdaq Stock Market. As of the date of this Information Statement, no hearing has been scheduled. If IMDS can get a Nasdaq listing, this would give it some creditability, and probably favorably affect its share price. Keep those fingers crossed!! Hearing should be coming up soon?

To: Dan O who wrote (3067)	4/11/1999 6:35:00 PM
From: Dan O	Read Replies (1) \| Respond to of 4122

Misleading Technology Statements: The concerns around the technology misrepresentations are as follows: 1. misrepresentation of material facts in prior annual reports regarding who owned the technology, including the 1997 patent 2. omission of material facts in prior annual reports including the fact that the most precious contract we could possibly have was not memorialized; 3. gross negligence in failing to memorialize that contract between the company and a major shareholder (Grable) until now with the resulting terms being substantially different than previously disclosed; 4. potential conflict of interest of management with shareholders (with shareholders losing the conflict); 5. serious risk of reversion of our main asset to Grable under very plausible circumstances. The main asset of the company is its right to use the CTLM technology. Grable's employment contract granted him a "development royalty" for his efforts in developing the technology. This royalty was disclosed in the 1996 and 1997 10ks, but no other obligations were mentioned. The Background sections of the 1996 and 1997 10ks refer to a patent that was applied for in 1995 and eventually granted in 1997. The '96 and '97 reports say that the company (not Grable) filed "its" (not "his") patent application due to advances made by the company (using company funds and company time). Never at any time was it represented that Grable was the owner of the new patent, in fact, the opposite was clearly stated. Never at any time was it disclosed that the company had any other obligations to Grable for the technology other than the development royalty disclosed in the 1996 10K. Now, however, footnote 9 of the 1998 10k states that GRABLE is the owner of the technology including the 1997 patent. Suddenly, the technology that INVESTORS funded through their contributions to IMDS was being represented as the property of GRABLE! Considering that the technology is our ONLY real asset, this sudden change was crushing to the common shareholder! The 1998 10k notes that Grable issued a license to IMDS to use the technology in June 1998 (technology the shareholder had thought already belonged to them). However, paragraph 13 of that license agreement states that the license can be revoked by Grable AT HIS OPTION in certain circumstances including bankruptcy (a legitimate risk for this company) or change of control. Not only was this not disclosed previously, but it actually results in a conflict between Grable and the shareholders. In a perverse way, Grable is better off if the company goes bankrupt, as long as FDA approval is received, since he would have all of the rights to the technology by himself. The 1998 10k and the 14C issued 10/29/98 make the admission that the patent license was not memorialized in writing with Grable until June 1998. According to the 14C, during the delay in memorializing the contract circumstances turned in Grable's favor, allowing him to negotiate more favorable terms, including: 1. Grable was granted an additional 7 million shares 2. The contract included a reversion clause in the event of bankruptcy or change of control 3. The royalty rate in his employment contract was doubled from a maximum of 5% to a maximum of 10% depending on the sale amount 4. Anti-dilution protection was granted to Grable. The company admitted in the public filing that Grable had a "fiduciary duty to the Company and its Shareholders to formalize, in writing, the oral agreement regarding the patent". This can only be interpreted as meaning that Grable was grossly negligent in failing to perform his fiduciary responsibilities by memorializing the contract only after circumstances moved in his favor. All of this pre-supposes that the Company did not own the technology in the first place which is a highly disputable premise based on prior public filings. Considering the fact that there IS NO SHAREHOLDER VALUE without the technology, these misrepresentations were egregious.

To: Dan O who wrote (3067)	4/11/1999 6:46:00 PM
From: Dan O	Read Replies (1) \| Respond to of 4122

Unfair (to shareholders) compensation practices: Richard and Linda Grable are two of three founders of IMDS. Between the two of them, they control the voting shares (though it is unclear to me if that will continue to be true after preferred convertible securities convert). There is no independent compensation committee governing their behavior. The patent discussion above is an extreme example of how this lack of independence may lead to a disregard for shareholder interest. Below are additional examples. Richard Grable's salary went from $100,000 in 1995 to $286,000 in 1998. Linda's salary went from $65,000 to $119,000 in the same time period. The average person's salary probably increased 3% per year over that same period. During this period the company had such setbacks as the NASDAQ failure and the drop in share price by 90% or more, hardly justifying the rewards. Further, there were large stock options (some at one-third of market), health insurance, car allowances, the patent awards mentioned above, and cost of living adjustments of 7% per year! Once operational, they will be paid bonuses, patent royalties and other compensation. All of this compensation has been negotiated by management with THEMSELVES at shareholder expense. These lucrative benefits are being granted by a company with no revenues to a management team that has failed the shareholder's in some very serious ways. It is difficult to determine how much of the $30mm invested to date has gone to the founders and their family members. I have posed this question to them and have not yet received a response. We now know that several family members are employeed by the company. It is not clear what procedures are in place to ensure that they were employeed because they were the most qualified candidates (vs because they were family). Clearly, the Miami Herald points out that they aren't doing badly. We need to determine if nepotism is occuring here. While not illegal, nepotism is not in the best interests of shareholders. When nepotism exists, it is rarely good for common shareholders as it indicates that a company is not getting the best qualified candidates for the lowest salary dollar in a rigorous competitive interview process. This is unacceptable in any company, particularly one that cannot afford to spend precious corporate resources to enrich family members of the majority owners. The alleged family relationships have been denied for a while until recently. If there are relationships, any denials or half-truthful answers are relevant in that they might be considered attempts to alleviate concerns about nepotism through deliberate deception. Though it is not illegal to employ family or for family to invest in a corporation, it is not unreasonable to ask whether arms length negotiations are occurring, whether shareholder interests are being watched over (given the lack of independent review), whether proper disclosures of related party activity has occurred (only Linda and Richard are mentioned in related party transactions) and whether shareholders have been deceived by denials made by the organization in the past.