The Hartech Corporation (the "Company"), incorporated in the State of Maryland in May 1996 is a diversified mid-stage development (investment type) Healthcare and Food Safety Service Organization. The Company has focused mainly on clinical and veterinary laboratory product development. The Company is a distributor and specification developer of general-purpose clinical and veterinary laboratory instruments (i.e., the "Bactobridge H₃") designed for real-time pathogen detection, cancer drug screening and tumor sensitivity testing. On January 28, 1997, the Company received clearance from FDA's Center for Devices and Radiological Health (CDRH) to use the Bactobridge H₃ to perform automatic analysis of antibiotic and cancer chemotherapy assays and tumor sensitivity testing [Owner/Operator #9010416 with an assigned pre-market notification number (510(k) #936123)]. The Bactobridge H₃ has also been cleared by the Veterinary Division of the USDA for non-invasive microbial testing of food products.

Many of the Company’s goals and objectives have been and/or are currently being met. The Company’s successes to date, are a direct result of the talent and dedication of its assembled professional management and international scientific teams, including the Imperial College of Science, Technology and Medicine in London, England and the Department of Medical and Research Technology (DMRT), University of Maryland School of Medicine. The Company has retained the SNS Bioengineering Developments Limited Company (a medical and biological engineering company) headquartered in London, England for instrument development. In 1996, the Company signed a "Proprietary Information Agreement" with the Environmental Technical Group (ETG) in Maryland, in anticipation of large scale manufacturing needs. The Company has been obtaining conductivity measuring tubes used in the Bactobridge H₃ from Electronic Tubes Ltd., and the Phillip Moore Company in the United Kingdom and the DC Scientific Glass of Maryland, in the US.

The Company possesses competitive advantages based on: 1) patented and patent pending technology, 2) the potential to provide cost-effective and 3) clinically efficacious outcomes. The Company owns all of its patented and patents pending technologies and it is [relatively] debt free. The most recent Fair Market value of the Bactobridge H3 regarding its use in in-vitro pre-treatment of chemotherapy patients was determined on October 17, 1997 by Sam Khoury, Ph.D., MBA, Sr. Intangible Asset Appraiser for the Dow Chemical Corporation to have a net present value of $202,000,000.00. The appraisal includes Revenues using the Technology factor method of $119,687,187.28 and total derivative sales of $42,335,774.00. Sam Khoury is now, President of Consor and Director of the Technology Management & Valuation (TMV) group. Although this technology can be use in both chemotherapy and food-borne pathogen detection applications, Sam Khoury's valuation report focuses only on cancer therapy. The current market value of a comparable laboratory instrument in the food industry i.e., the Bio Merieux Bactometer starts from $250,000.00 (not including the computer). DMRT has received a Bactobridge from Hartech discounted approximately 19% leaving a list price of approximately $208,000.00.

The capitalization required for final product development and further application specific software development, necessary for chemosensitivity testing and clinical microbiology applications is comparatively low. Competition is relatively low and therefore any competitive start-up presence in these sectors challenging us will require long lead times and substantial R&D investment. Comparison of competitive products and product evaluation to determine reliability and accuracy of the Bactobridge H₃ has been completed by DMRT, whose findings suggest clear advantages with minimal comparable products existing. For instance, Phase #1 of product testing of the Company's Bactobridge H₃ in a beta-testing manner for microbiological data collection, analysis and its' application in the food industry has already been completed by DMRT and has been observed by the USDA. This will help facilitate a marked rise in the Company's share of the healthcare and food safety market. The Company has reported the test results in a research paper that has been submitted to the National Academy of Science (NAS) for publication. On October 14, 1998, the Company was informed by the Managing Editor for NAS that the paper titled "Real-time Pathogen and Human Tumor Sensitivity Detection Technology to Improve Food Safety" had been forwarded to the Review Editors of NAS. DMRT will further promote the Bactobridge H₃ developments through technical notes/publications to major journals and through outside lectures.

Through corporate collaboration (Testing Agreements) DMRT, will provide data related to the Company's Bactobridge H₃ and performance of our BactoWatch software, for final product development and the marketing purposes, necessary to support the cancer treatment efforts of the University of Maryland Medical System and the surrounding Maryland healthcare community. DMRT's Research Laboratory, at the Allied Health Building-UMB is adequate to house multiple Bactobridge units and attached monitoring and data analysis computers. This project is designed to evaluate the Bactobridge as a diagnostic tool in determining the chemosensitivity of various tumors in order to select specific chemotherapeutic agents. Fresh samples of patient’s tumor from surgery or a biopsy will be tested with various drugs. Drugs that are most effective in killing the cancer cells will be recommended for treatment. The reference test for the instrument will involve detecting the presence of microorganisms within 1-24 hours from food sources, which will impact on industrial microbiological analyses, a secondary application of the instrument.

On July 2, 1997, the Company received authorization for healthcare providers’ reimbursement coverage from the Maryland Medical Care Policy Administration for the use of the Bactobridge H₃ in chemosensitivity, tumor sensitivity and antibiotic testing. In April 1998, DMRT received approval to conduct Pre-therapeutic In-vitro Anti-Cancer Drug Response Measurements using the Bactobridge H₃ from the University of Maryland at Baltimore’s Investigation Review Board (IRB). Also in April 1998, the Maryland General Assembly voted to require health insurers to pay the cost of coverage for patients participating in medical clinical trials for cancer and other life threatening diseases.

Since its inception, the Hartech Corporation has been involved with both the medical and food safety sciences. The principals of the Company have long, visible and distinguished track records of their involvement with emerging technologies that aid in the detection and reduction of foodborne pathogens, i.e., E-coli, salmonella, Listeria, Campylobacter and the Vibrios. They have primarily focused on food safety in the seafood industry and authored and filed a food additive petition (F.A.P. 1M4246) with the FDA, proposing that the food additive regulations be amended to provide for a safe use of a source of radiation to control foodborne pathogens in shellfish. They are also the inventors of U.S. Patent #5,482,726 "Methods for Reducing Contamination of Shellfish", which was granted in January, 1996.

Time is fast approaching for meat and poultry establishments to be in compliance with all USDA/FSIS mandated "Hazard Analysis Critical Control Points (HACCP) regulations, including pathological examination; conducting regular microbial testing for generic E-coli and performance standards for Salmonella. The Maryland State Cooperative Extension Service and several faculty members within the University Systems of Maryland have been involved in the development of these HACCP regulations and are conducting programs to help producers and processors comply with them. Use of the Bactobridge H3 for real-time detection of foodborne pathogens represents a major technological break-through in HACCP-based seafood, meat and poultry inspection and monitoring systems engineering. The primary attribute of the Company's Bactobridge H₃ is its speed. As an incubation instrument with associated computers, users will be able to detect the presence or absence of specific microorganisms within minutes after collection of samples. This science-based technology will give our local client and other seafood, meat and poultry establishments a microbiological tool to analyze food products and the processes used in preparing or packaging it, as required in HACCP validation and verification. DMRT has consistently reported the benefits of using the Bactobridge H₃ as a non-invasive; non-destructive way of determining quantitative analysis of suspected foodborne pathogens in specimens coming from commercial food processors.

The PC-based Bactobridge H₃ can serve as the basis for and/or support of a Laboratory Information System (LIS) to collect both graphical and numerical data necessary to analyze a wide spectrum of foodborne and malignant diseases (i.e., cancer) in both the human and animal populations. Electronic networks of PC-based Bactobridge H₃’s will allow users to perform rapid quantitative data sharing and analysis of such information to assess the use and efficacy of food safety control and prevention measures. Healthcare and food safety information systems can be used to enhance and expand the activities of FoodNet (CDC/USDA/FDA Foodborne Diseases Active Surveillance Network), the interagency component of CDC’s emerging infectious disease active surveillance program to improve the quantitative base for foodborne disease. Foodborne microbial pathogens account for an estimated 6 to 33 million cases of foodborne illness each year, and up to 9,000 deaths. In the last five years pressures of managed care have driven healthcare and food safety providers from hospital-centered strategies to a patient-centered focus that spans the continuum of care from the farm to the table. In the opinion of the Company’s Executives, the Bactobridge H₃ and their pathogen reduction technologies are essential for effective pathogen control and could serve as a foundation for the treatment of malignant diseases (i.e., cancers), benefiting the healthcare and food industries and the general public.