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Our financial statements for the year ended December 31, 1999 as restated contain a statement that losses from operations, a working capital deficit and a retained deficit, raise substantial doubt about our ability to continue as a going concern. The notes to the financial statements describe management's plan to address these concerns, which include: - Our raising 3,000,000 through a private placement of our securities in January 2000, - Our raising 2,100,000 through a private placement of our securities in March 2000, - The receipt by us of a commitment from the January 2000 investor to provide an additional 2,000,000 in private placement funding contingent on our achieving certain sales benchmarks for the first two quarters of 2000; - Our currently negotiating to raise an additional 15,000,000 via a private placement with a plan to pay off the Company's term loan with the proceeds; - Our having received a waiver from our credit facility lender for violations of certain covenants included in the loan agreement; - Our reducing portions of our fixed overhead expenses, including executive salary reductions of 1,300,000; - Our management having revised its marketing strategy and plans to reduce advertising expenditures; and.

During the period from June, 1998, until Mr. Irwin's resignation as Chief Executive Officer, disputes arose between Mr. Irwin and us. On October 8, 1999, we entered into a settlement agreement with Mr. Irwin in order to resolve certain mutual claims that had arisen. Among the principal terms of the settlement, Mr.

On January 24, 2000 the Company executed a consulting agreement with a financial consulting firm to assist the Company in marketing its common stock in Europe. The agreement was a one-year agreement that called for the issuance of 560,000 shares of common stock. The fair value of the stock on the day the agreement was executed was approximately 960,000, which was charged to operations as consulting expense. In August 1999, the Company entered into a three-year agreement with an individual to be the spokesperson for its Inholtra product line.]