A Google search reveals,
that former
Spheric Audio Labs is now
Extreme Laboratories, Inc:

Extreme Laboratories Inc
203. N Golden Circle Drive
Suite 201
Santa Ana, CA 92705
United States
800.774.3742 (Toll free)
   

http://atlas.mapquest.com/maps/map.adp?address=203%2e%20N%20Golden%20Circle%20Drive&city=Santa%20Ana&state=CA

Mr Durban seemed to suggest that these patents were not really formulated by SM himself but rather by people like himself and maybe others around him.

One thing I find odd is the statement from JD about "to save the company we would....."
Why would JD work so hard to save SM's company if they only met a few times. Developing a whole new product for SM to save his company seems like a pretty big favor.

Hello everyone,
I stumbled across this tpu thing about a month ago and have been fascinated by it from the first moment. I have been following all this with great intrest. I'm not a scientist or engineer or expert in any field, I am a just a maintenance technician in the plastics industry. I have not bothered joining in or posting till now because i didnt feel i have anything of value to offer. Then today I heard the radio show. The thing that kept coming up over and over again was how these people were in the AUDIO field and how the S.M.tpu was built with SPEAKER parts.Has anyone here ever built a set of hi-fi speakers before ? Back in the day, Radio Shack was one of the best places to buy speaker components.I think if you look at the 15" S.M. tpu you will see that the coil/cap unit may actually be a speaker crossover unit.He also seemed to use a speaker spring terminal connector on this unit also.I really don't want to send anyone on a wild goose chase here, but I do want to tell you all what I hear and see in this...

(P.S) Radio Shack doesnt really sell this kind of stuff anymore, but this place certainly does:
Parts-express.com

slicer

Here is again my former correspondence with Mr.Doleshal.
You must read it from end to start for the right time schedule.

hello Stefan,

Yes,  its all right to repost this.  I wish I could be of more help to you, but unfortunately, most of the kind of information you are seeking simply is not available. All this happened years ago, and my own memories of most of this are hazy.  My understanding is that Steven lost interest in persuing the matter years ago when he sold the rights to what he had to UEC. All such trade secrets and information would be property of UEC, and under such an agreement, Steven would not be permitted to reveal such secrets freely to others that he had sold to UEC for money. You probably can't get much technical detail from Steven.  Eariler this year, I heard there was some group in Ireland who was very publicly making the claim to possess such a device, but I don't recall their name, nor am I in any position to evaluate their claims. Also, there was a prominent group of UFO fans based in Virginia, (run by a Medical doctor named Greer(?) that was publicly claiming to have such a device about 2 or 3 years ago. The guy seemed to be an ethical and intelligent person, but I never actually saw his tecnhology demonstrated, and have no way to evaulate his claims. However, you MIGHT have more success investigating one or both of these groups than from Steven.


Regarding UEC, the way I remember it, UEC was to be an Australian corporation, possibly with affiliates in Europe or America, but primarily an Australian entity. If so, all relevant legal documents should be a matter of public record in Australia. They should be accessible, but I an not personally familiar with Autralian business or governemental procedures. It is quite possible UEC has changed its name or been sold to some other entity, but I would not know anything about this. My understanding was that Brian Collins was setting up UEC along with his associates, but I don't know their names.  I think Steven was not wanting to be part of that company, but simply wanted to sell his technology to them.  I have no address not contact information about them.

Reagrding Paul Stemm. Yes, Paul Stemm was the lawyer who put much of this deal together. He might have been one of the partners or stock holders of UEC., but I don't know that for sure. I have not seen Paul for many years.

Regarding patents on the TPU, I don't know whether the device itself has been patented. When last I knew anything about it in the late 1990s, this had NOT been done yet. Perhaps it has been done since. But if it has been done, it should be a matter of public record. A routine patent search should turn them up. Such procedures are now fairly easy to do over the internet. I don't see how Steven or any one else could prevent such patents from being examined. If they exist and are therfore publicly examinable government documents that anyone can look at, I don't see why Steven could or should want to prevent any one from seeing them.

About where UEC may have gotten funding, I don't know that either. If they possess a working technology, the obvious strategy for raising money would be to give demonstrations to potential investors. But I haven't heard of such things being done.

As far as my involvement in the testing of the device, I can tell you this much. After consulting with a number of highly experienced, intelligent experts in the field of electrical power generation, and asking them how a clever person might fake such a device as the TPU was claimed to be, several possible tests were suggested.

First of all, was necessary that no external wires or connection be permitted. (Some inventors insist their devices need to have such cable for "grounding purposes" or whatever. But any wire leading in could be used to send in power. Any "free energy device" that can't be demonstrated without such wires is almost certainly a fraud). This TPU was an exception, because it could easily be demonstarted with no such wires, either sitting on a glass table or carried about freely. Examiners could inspect it to make sure there were no concealed wires leading into it.

A second consideration was that the output must be demonstrated to light lamps or run ordinary electrical devices in a normal fashion. Simply showing a voltage reading on a meter was not sufficient. Ordinary volt meters are designed to measure either DC current or AC current with a regular waveform.  Feeding such a meter a complex electrical waveform with erratic spikes can confuse such meters. If the current averages about 2 volts but has an occasional brief surge of 700 volts, the meter might be fooled into thinking it is seeing a current of 700 volts when it really isn't.  ALL of the so-called "overunity "devices I have ever seen appear to work this way - by confusing the meters with complex waveforms they weren't designed to measure.  A meter will read as if there was a high voltage, but the output won't light bulbs or drive motors.  Although the output of Steven's devices did register on meters as a high voltage of a specific wattage, it did not display any of the problems of these so-called over unity devices. If the meter said 600 watts, the device really would light up 600 watts worth of light bulbs or run a 600 watt motor without problems.  Wneh measured this way, Steven's TPU always passed the tests easily.

The various experts I consulted frequently suggested another possible way such a effect might be faked was if the so-called TPU devices contained some kind of tiny batteries or storage devices. However, when the best experts on battery technology available were asked about this, they were never able to explain how a device as small as a TPU could store sufficient power to supply the load.  They were sure a portable unit capable to lighting six 100 watt light bulbs for 30 minutes or an hour COULD be built, but that it would need to be many times the size and weight of a TPU that seemed able to do the same thing. Perhaps battery technology now exists that's better than what was around ten years ago, but that still wouldn't explain how Steven could do what he did back then. Besides, if Steven had such a vastly superior electricity storage system so much better than anyone elses, the thing to do would have been simply to sell it as a new kind of battery instead of pretending it was a free energy device. The market for such a battery is probably hundreds of millions of dollars per year. Steven is an intelligent an practical man. If all he wanted was the money, he'd have surely done that instead of going the much more difficult rout of claiming it was all a free energy device.

The other possibility my experts raised was that these TPU were acting as receivers for power being "broadcast" to then via induction, magnet fields or radio waves from somewhere nearby. Although this was technically an easy thing to fake, in practice such trickery would be easy to detect. For the magnet fields or radio waves need to create 600 watts of usable power in the middle of a room ten feet away would need to be VERY intense at their source.  The room containing the reciever would have to be filled with a field so strong it would make compasses spin, or cook flesh like the inside of a microwave oven.   In such a case, the output of the TPU should diminish drastically when moved even a few  feet further away from the hidden transmitter.

Thus the engineers wanting to evaluate the TPU brought testing devices like Sony-All Waves, that could detect the presence of any magnetic field or radio waves in the area, and insisted the TPU be demonstrated not just inside Steven's house but at locations some distance from the house of their own chosing. Every time this was done, no magnetic fields nor radio waves could be detected in the house, or nearby, and the device always worked just as well in the house as outside, or even several hundred yards, or a mile or so away.

I personally saw this kind of thing done several times, and Steven's devices always passed the tests every time. So althougI haven't a clue how all this was accomplished, he DID manage to accomplish it.

As for the name John Sanchez, that name is not familiar to me. However, I was in the house the day when Professor Schinzinger examined the TPU in the manner discribed in the previous paragraph.  I talked with Shinzinger a few days later by phone. He called me because he was upset with me because I had (erroneously) told people he had been convinced that the TPU was genuine, when all he had actually meant to say was that he had been unable to detect any fraud.  I asked Schinzinger if their were other tests he thought might have revealed a possible fraud better than the tests he had done, but he was unable to suggest anything specific. Schinzinger was the Dean of Engineering for years at the nearby University of California Department of Engineering, and a resepcted expert on electrical power generation systems.  A more knowledgeable person on the subject probably could not be found anywhere.  As a respected man of high intelligence and high integrity, it seemed that he was nervous letting his name be used to endorse a technology he could not explain or understand. He didn't want to be embarrassed by something that might later turn out to be revealed as a trick or a fraud. He was never convinced it was real, but even so, he was unable to find any evidence of fraud, despite what seemed like his best efforts to do so. Dr. Shinzinger was rather old then, and I have not heard from him since. Whether he is still alive now, I can't say, and if he is, neither can I say what his present opinion about all this might be.

   I don't know if any of this helps you, But its about all I really know.  I know Steven was very frustrated by this years ago, and had pretty much abandoned hope of doing anything more with it when he sold it all to UEC, and moved on to other more mundane and more promising projects. He is a very talented inventer and engineer, and easily creates other kinds of devices of a non-controversial nature that can be more readily profited from in the present  economic and political environment that could things like this TPU. So far as I know, that is what he's been doing. But I haven't heard from him in many years. He used to often dream of living on a warm tropical island in the Caribbean, like Jamaica. Last time I heard from him he had earned sufficient money from his more ordinary projects to do so, and talked like he was ready to buy some land in Jamaica and move there. Far as I know, that's what he did.

If you have any further questions, feel free to ask me. I'll answer them as best I can, but as I have said, I probably can't be much help with the kind of technical information you are seeking simply because I don't have it and don't really know who does.

Good Luck, and Happy Hunting. If yu ever find anything interesting, please let me know. If ever make contact with Steven, please tell him I said Hello, that I wish him the best, and that I'd love to talk with him again some time.

Regards,

DAVE



Stefan Hartmann  wrote:

    Hi Dave,
    many thanks for your reply.

    Can I post this in the thread at
    http://www.overunity.com/index.php/topic,712.0.html

    ?

    Well, do you know, who this Universal Energy Corporation
    is, that seems to be said is the holder of the rights to the TPU ?

    How can they be contacted ? Do you know any address of them ?


    Did Steven Mark sell the rights to them ?

    Did Steven sell the rights to the TPU to his attorney Paul Stemm ?
    Is Paul Stemm or does he own Universal Energy Corporation ?

    Or If Steven did not sell the rights to the TPU to UEC how did UEC gain control of the device ?

    Why does Steven not what us to see the patents granted to UEC for parts of the TPU?

    Do these patents really exist?

    Is the Universal Energy Corporation a real company and are there public records that can be consulted that show records of this
    company?

    If the UEC really exists who are the shareholders and were shares raised by making demonstrations of the TPU?

    Do you know any answers to these questions ?

    And Dave,
    how were you involved in all of the testing and demos at this time ?
    Did you measure yourself the output of the device with measurement equipment ?

    Do you still know some other people , who I might cound contact,
    that could answer these above questions ?

    Do you know John Sanchez who was with Prof. Schinzinger testing the TPU ?
    How can John Sanchez be contacted ?

    Many thanks.

    Best regards, Stefan.
    ----
    Dipl. Ing. Stefan Hartmann
    Moderator of the international free energy
    research forum www.overunity.com
    Keplerstr. 11 B
    10589 Berlin, Germany

    ----- Original Message -----
    From: "Dave Doleshal"
    To: "Stefan Hartmann"
    Sent: Wednesday, November 01, 2006 9:56 PM
    Subject: Re: Steven Mark TPU unit witness ?


    > Hello Stefan,
    >
    > I am sorry to say I probably can't be much help on this. Yes, I did see the unit in operation several times, but that was many
    years ago. I do not have any technical secrets or details of how it works, beyond being fairly sure it does not have any thing to
    do with the kinds of things so many people have been speculating about. Mark his associates are the only ones who know about this,
    and they are apparently still not revealing anything.
    >
    > What I did see when the unit was in operation was that it DID appear to operate as Mark says it does - yielding an output of
    several hundred watts, with no wires leading in to. The possibility of it containing some kind of hidden batteries within it was
    often raised by skeptics, but every consultation with battery experts or battery salesman to explain how such a thing might be faked
    using the smallest state of the art batteries came up empty handed. Mark did demonstrations in which engineers measured the
    surrounding area to see if he might somehow secretly have been sending it energy via a radio waves or magnetic fields,or something,
    but none of them ever detected anything of the sort, despite heroic efforts to do so. Potential investors hired all manner of
    high-powered experts to debunk it or detect some fraud or trickery, but none were ever able to do so.
    >
    > So what does that prove? I don't know.
    >
    > One thing I am certain of is that all attempts to settle the matter by trying to evaluate the inventors character, etc are nothing
    but a waste of time. I see people do this with other kinds of technologies, and I understand why in the absence of hard evidence
    people feel the need to fall back on this grasping at straws approach, but it is utterly worthless. It is easy to make up with
    accusations and insults or nasty stories about ANYONE, but whether true or false, they amount to nothing. There is this human
    tendency to feel that if you can somehow find a flaw in someone's behavior, morals, character etc, you can therefore feel safe in
    dismissing them. But if you look at the history of famous geniuses like Da Vinci, Galileo, Lord Byron, Newton or Edison, they all
    were rather eccentric characters with colorful and checkered pasts. Edison was apparently a very rude guy in person. Einstein had
    six girlfriends in addition to his wife. Their detractors had an easy time
    > concocting all manner of fake charges against them, but none of that - false or true - had the slightest real bearing on the
    value of their creations. The opposite is equally true. So far as I know, ALL the nasty accusations against Steven Mark manufactured
    out of thin air, mostly by people hoping to blackmail or pressure him into making a deal with them and/or angry at him when he
    wouldn't. But even if they weren't, so what? Even if you find people to swear on a stack of Bibles that the inventor was a saint of
    stellar virtues and pure motives and morals, would that really be proof that his inventions worked? I don't think so.
    >
    > Good luck with it all.
    >
    > I haven't heard from Steven Mark in many years, so I you are in contact with him, please say Hello form me and wish him the
    best, and ask him to contact me.
    >
    > Regards,
    >
    > DAVE
    >
    >
    >
    > Stefan Hartmann wrote: Hallo Dr. Doleshal,
    > I am running the free energy research forum site
    > www.overunity.com
    >
    > I have been getting infos from Mr. Lindsay Mannix from Australia,
    > who is currently in contact with Steven Mark,
    > that you have been seeing a TPU unit from Steven Mark
    > "live in action", so to say...
    >
    > We are in this moment discussing and researching the TPU
    > very heavily in this thread:
    >
    > http://www.overunity.com/index.php/topic,712.0.html
    >
    >
    > Do you still have any technical informations about it
    > and can send me your view about it ?
    >
    > Maybe you like to join my free forum and
    > also discuss it there ?
    >
    > Do you know, who exactly owns the technology in this moment ?
    > It was said it is owned by UEC, but who is it and
    > how can these persons be contacted ?
    >
    > Many thanks.
    >
    >
    > Gruss / Best regards, Stefan Hartmann
    > ----
    > Dipl. Ing. Stefan Hartmann
    > Moderator of the international free energy
    > research forum www.overunity.com
    > Keplerstr. 11 B
    > 10589 Berlin, Germany

Tracking the Spheric Audio Labs seems to be pretty hard.
I just called their supposed number:
714/668-1180

but this was a wrong number.

As I can not call in this moment
the
800.774.3742 Toll free number
from Germany, maybe someone else can do
it and ask for an employee that was around already 13 years
ago,
when Steven Mark still worked at
Speric Audio Labs and ask what his job was .
Many thanks.

Here are a few articles I found about this company on the web:

 SANTA ANA, Calif.--(BUSINESS WIRE)--Dec. 28, 1994--Extreme Technologies Inc. (OTC:EXTMF)(VSE:XT) Wednesday announced that the company has changed the name of its wholly owned subsidiary PCBX Systems Inc. to Extreme TeleCom Inc.
advertisement
Click Here

The name change reflects the company's goal to offer a broad range of telecommunication systems for business applications.

Extreme TeleCom develops and markets several telecommunication product lines including a personal computer branch exchange (PCBX) which permits the operation of a full-featured telephone network control system from a centrally located personal computer. The system is comprised of an integrated circuit board which fits into a personal computer and has a number of advanced features.

Extreme Technologies is the parent company of three subsidiaries: Extreme Laboratories Inc. develops innovative sound technologies; Extreme TeleCom Inc. offers small- to medium-sized businesses integrated PC-based telephone networks through its proprietary PcBX TelCard; and PortaCom International Ltd. is involved in securing licensing, installation and operation of cellular telephone systems and other wireless communication services.

Extreme Technologies is listed on the Vancouver Stock Exchange and is quoted on the OTC Electronic Bulletin Board in the United States.

CONTACT: The Bohle Co., Los Angeles

              Christine Flaherty/Karin Olsen, 310/785-0515
               or
              Extreme Technologies Inc., Santa Ana
              Francis T. Phalen, 714/668-1180



Extreme Technologies Chairman Scott Mednick appointed to the additional post of CEO; President Phalen resigns for personal reasons.
Publication: Business Wire
Date: Thursday, February 9 1995
Subject: Officials and employees, Telecommunications systems
Company: Extreme Technologies Inc. Officials and employees
Product: Communications Equipment, Telecommunication Systems, Communications Equipment Manufacturing
You are viewing page 1

SANTA ANA, CALIFORNIA--(BUSINESS WIRE)--Feb. 9, 1995--EXTREME TECHNOLOGIES,INC.(OTC:EXTMF & VSE:XT) announced that Scott A. Mednick, Chairman, has been appointed to the additional post of Chief Executive Officer of the Company effective Friday, Feb. 10, 1995. At the same time, Francis T. Phalen will resign as President and CEO for personal reasons. Phalen remains on the Board of Directors and


According to Mednick, "steps have been taken to ensure continuity as Phalen steps down. Frank will also serve as a consultant and Director of the Company. The Company's future remains bright, and we expect a series of positive developments to be reported over the next several months."

Phalen additionally commented that his resignation is for personal reasons and that he plans to "remain active from the sidelines and as a consultant with no plans to dispose of my common stockholdings." He also stated "I am confident of the future prospects of the Company and regret that I will be unable to participate from an internal viewpoint in the spectacular growth that I believe will occur."

Extreme Technologies, Inc., formerly International PcBX System, Inc., is the parent company of three subsidiaries: Extreme Laboratories, Inc. which develops innovative sound technologies; Extreme TeleCom, Inc., offers small to medium-sized businesses integrated PC-based telephone services through its proprietary PcBX TeleCard; and PortaCom International, Ltd. which in involved in securing licensing, installation and operation of cellular telephone systems and other wireless communication services.

CONTACT: Juliette London

(714) 668-1180

Hi Stefan,
It was good to put a voice to a face on the radio show, in fact all the people that did ring in.
That was very kind of Mr Doleshal to reply in such detail about Steven Mark, this is more evidence the TPU is for real.
It would be good if the university lecturer could be tracked down and get him to confirm he saw a working TPU.
I very much doubt that Extreme Technologies will give out any info about an employee working for them, the best you could do would be to ask to speak to Steven Mark and see if they say, "ohh he left years ago".

I wonder who Spherics really is?
Maybe the data Spherics posted is an evolution of the TPU to the next level - a "Super TPU" with 10KW of output.
Think about it: 4 input/control coils, one toroidal collector coil.

Perhaps Jack can give us details about all these "other experimenters" who have the overheating issues after 20 minutes. Certainly no one person here has reached the stage of a working TPU let, never mind overheating problems.
[edit] I found this link that contains load more info: http://www.users.on.net/~lekh/stevenmark.html [/edit]
Regards
Rob

It seems this company Extreme TeleCom Inc. is bankrupt by now and thus out of business.
From:

http://sec.edgar-online.com/1996/08/15/00/0000898430-96-003905/Section7.asp


The following is an excerpt from a 10QSB SEC Filing, filed by PORTACOM WIRELESS INC/ on 8/15/1996.

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

BACKGROUND

The Company conducts business operations primarily through its wholly owned U.S. subsidiary, PortaCom International, Ltd. ("PIL"). The Company also has three inactive wholly owned U.S. subsidiaries; PCBX Systems, Inc. ("PCBX"), Extreme Telecom, Inc. ("Telecom"), Extreme Laboratories, Inc. (formerly known as Spheric Audio Laboratories, Inc.) ("Laboratories"), all of which ceased operations in August 1995, and presently have no active business operations.

Since 1994, through its PIL subsidiary, the Company has engaged in initial stage efforts to evaluate the feasibility of, and attempt to secure, licensing and joint venture arrangements for the operation of wireless telephone networks, mobile radio communication systems and other telecommunications technologies. In September 1995, the Company announced that it intended to focus all of its future activities on the development of its prospective emerging market cellular and wireless interests. Although the establishment and operation of wireless telephone networks and other advanced communications systems will be investigated by the Company wherever strategic opportunities arise, its principal efforts are presently focused on certain Asian countries. The Company's wireless telecommunications operations are in the development stage, have produced no revenues to date and remain limited in scope.

PCBX developed and was engaged in marketing a personal computer branch exchange which permitted the operation of a full-featured telephone network control system from a centrally-located personal computer. Telecom was engaged in distributing a line of telecommunications products manufactured by Nitsuko America Corporation. Laboratories developed and was engaged in marketing a line of audio speakers, as well as a proprietary audio recording and playback technology known as "SphericSound." PCBX, Telecom and Laboratories ceased operations in August 1995 and presently have no business operations.

Since the commencement of operations, the Company's revenues have been principally derived from the sale of its PCBX systems and to a substantially lesser degree from sales of Telecom and Laboratories products. Due to significant ongoing losses and the Company's inability to successfully develop and carry out marketing and sales strategies, the operations of PCBX, Telecom and Laboratories were closed in August 1995. The Company also attempted to secure licensing arrangements or other means of commercial exploitation of its SphericSound technologies; however, to date, only limited sales revenues were realized from these efforts.

Funding of the Company's operations since inception has been provided by:
(i) revenues from the sale of PCBX systems; (ii) proceeds from the sale of securities undertaken in a series of private placement transactions; and (iii) completion of an initial public offering on the Vancouver Stock Exchange during October 1992.

RESULTS OF OPERATIONS

Quarter ended March 31, 1996 as Compared with Period Ended March 31, 1995.

For the quarter ended March 31, 1996, the Company incurred a loss of $624,958 with no sales occuring. This compares to a loss of $4,014,522 on sales of $97,449 for the comparable prior year quarter. The decrease in sales (to nil) was due to the fact that the Company's revenue-producing subsidiaries (which were also generating significant net losses) have been closed. Revenues are expected to be nil throughout the fiscal year. Virtually all of the Company's sales in the 1995 period were attributable to the Company's PCBX systems and related products, with a small percentage of such sales being attributable to Spheric Audio. No sales have been realized by PIL.

The Company's loss for the quarter ended March 31, 1996 represents a loss of $.04 per common share, as compared to a loss per common share of $.13 for the comparable prior year quarter.

There were no cost of sales in the quarter ended March 31, 1996, as compared with $568,899 or 584% of sales in the prior year quarter. The Company's cost of sales as a percentage of sales in the quarter ended March 31, 1996 is not comparable to the prior period due to (i) the closure of the Company's revenue-producing subsidiaries in August 1995, and (ii) the Company's current business development activities not generating revenue.

Operating expenses fell in the quarter ended March 31, 1996 to $534,943 from $3,543,072 in the comparable year-earlier quarter, a decrease of $3,008,129, or 85%. Of this decrease, the most significant factors were a reduction in workforce and the cessation of sales, marketing and product development activities related to the closed PCBX, Telecom and Laboratories subsidiaries.

During the quarter ended March 31, 1996, wages and benefits fell to $79,716 from $728,096, an decrease of 89% from the comparable year-earlier quarter, primarily related to the cessation of sales, marketing and product development activities related to the closed PCBX, Telecom and Laboratories subsidiaries.

Consulting fees decreased to $264,137 in the current quarter from $1,175,758 recorded in the comparable prior year quarter. This reduction was primarily related to the cessation of business activities related to the closed PCBX, Telecom and Laboratories subsidiaries.

The Company's operations have become more dependent on its wireless telecommunications business development activities. The Company expects that it will continue to expend significant funds in order to obtain the licenses and form the joint ventures necessary for the Company or PIL to provide wireless communications services in developing international markets, although no revenue will be generated until such licenses are obtained and such joint ventures are operational. This may necessitate a material increase in general office overhead and other general and administrative costs.

LIQUIDITY AND CAPITAL RESOURCES

In the quarter ended March 31, 1996, the Company realized net proceeds of $975,785 from the issuance of shares of common stock in a private placement and exercise of stock options. In the quarter, the Company also did not repay any loans outstanding. These activities contributed to a net working capital (deficit) position as of March 31, 1996 of ($1,586,150), which is up $2,071,167 from ($3,657,317) at March 31, 1995.

The Company has incurred cumulative losses from inception through March 31, 1996 of $15,544,847 and has not yet achieved revenues sufficient to offset direct expenses and corporate overhead.

Since inception, a substantial portion of the Company's operating capital has been provided through financing activities. Operations have provided gross revenues to the Company of $2,222,650 whereas financing has yielded the Company net proceeds of $15,176,456. The Company's financing has been provided by an initial public offering and a series of private placements of shares. The Company anticipates that it may seek additional financing through the private placement of equity or debt securities, although there can be no assurances as to the success of such anticipated placement.

8

Between January 5 and March 31, 1996, the Company has arranged, subject to regulatory approval, private placements of convertible promissory notes having an aggregate principal amount of $780,000. The promissory notes are due and payable after two years, or after six months upon demand of the holder. The promissory notes are convertible into shares of common stock of the Company at conversion prices ranging from $1.49 to $2.50 per share. The Company will also issue to the investors non-transferable warrants to purchase an aggregate of up to 154,990 shares of common stock of the Company for a period of two years at a price equal to the conversion price of the notes (see Subsequent Events).

As of March 31, 1996, the Company had 1,467,268 (567,433 options and 899,835 warrants) options and warrants outstanding which upon exercise would yield to the Company additional proceeds in excess of $4.7 million. The exercise of existing warrants is impossible to predict with any certainty, accordingly, management can render no assurances that any material funds will be realized upon the exercise of such warrants, or whether such will be exercised at all.

The Company has been able to secure financing in the past through loans from certain stockholders. Management has no reason to believe that similar arrangements will be available in the future.

The Company's net working capital position increased approximately $319,518 from December 31, 1995 to March 31, 1996. Working capital levels have only been able to increase in the past by virtue of the Company's continued offerings of securities.

With the exception of fixed rental and certain personnel expenses, the Company anticipates no significant capital expenditures within the short term. Rental expense accounts for approximately $5,000 of fixed expenses on a monthly basis. Personnel costs, which are expected to remain relatively stable within the short term, are likely to account for approximately $26,500 of fixed expenses on a monthly basis. Additional variable expenses, such as consulting fees, legal and accounting, travel and entertainment, utilities and miscellaneous equipment purchases (or rentals) are expected to account for approximately $132,000 per month.

Management does not believe that in the near term the Company's operations will generate revenue or cash flow to finance its working capital or any capital expenditure requirements and the Company's operations will remain dependent on the Company's ability to obtain additional debt and equity financing (including from the exercise of existing warrants), as to which no assurance can be given. In the past, the Company has been able to secure financing through loans from certain stockholders. While the Company will continue to seek both debt and equity financing, there can be no assurance that any such financing will be available on terms acceptable to the Company or at all. Without such additional sources of financing, the Company will not be able to continue as a going concern.

9

SUBSEQUENT EVENTS

Convertible Promissory Notes

Subsequent to March 31, 1996, the Company arranged, subject to regulatory approval, private placements of convertible promissory notes having an aggregate principal amount of $1,025,000 (for a total amount of $2,405,000 of such securities placed between December 19, 1995 and May 7, 1996). The promissory notes are due and payable after two years, or after six months upon demand of the holder. The promissory notes are convertible into shares of common stock of the Company at conversion prices ranging from $2.50 to $3.25 per share. The Company will also issue to the investors non-transferable warrants to purchase an aggregate of up to 142,958 shares of common stock of the Company for a period of two years at a price equal to the conversion price of the notes. As of July 31, 1996, the issuance of such securities remains subject to regulatory approval.

Debt Settlements

In October 1995 the Registrant began to enter into written agreements to settle indebtedness in the aggregate amount of approximately $2,809,000 for cash or share consideration. These agreements were subject to regulatory approval. In May 1996, the Registrant received regulatory approval and completed the settlement of $2,513,121 of such debt through the issuance of a total of 1,256,561 shares of Common Stock. As of July 31, 1995, 53,675 shares continue to be reserved for issuance when permissible.

In December 1995, the Registrant agreed to the restructuring and settlement of claims of two parties related to each other, which settlement has subsequently been amended and partially paid. As of the July 31, 1996, the Registrant is obligated to make a final payment of $200,000 due December 31, 1996.

Between October 10, 1995 and May 28, 1996, the Registrant had settled for cash approximately $1,090,000 of accounts payable owing by the Registrant and its closed subsidiaries. As of July 31, 1996, the outstanding accounts payable of the Registrant's closed subsidiaries is approximately $185,000, which management of the Registrant is continuing to attempt to settle on terms favorable to the Registrant, although no assurances about such settlements can be given.

Cancellation of Performance Shares

In October 1995, certain shareholders agreed to surrender their 5,950,000 performance shares which were then held under an escrow arrangement. In consideration therefor, the Registrant agreed to issue 314,762 common shares at a deemed price of $2.00 per share. Although the performance shares have been irreversably canceled by the Registrant, as of July 31, 1996, the issuance of the 314,762 shares continues to be subject to the removal of the Registrant from the jurisdiction of both the Vancouver Stock Exchange and the British Columbia Securities Commission.

Bonus Shares and Warrants

In connection with the issuance of certain short-term debt by the Company in January 1995 and May 1996, the Company has agreed to issue, subject to regulatory approval, 85,590 "bonus" shares of common stock and 166,667 share purchase warrants, exercisable at $3.30 per share,

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expiring on May 31, 1997. As of July 31, 1996, the issuance of such shares and warrants remains subject to regulatory approval.

EFFECTS OF INFLATION

The Company does not expect inflation to materially affect its results of operations, however, it is expected that operating cost and the cost of capital equipment to be acquired in the future may be subject to general economic and inflationary pressures.