A. Background

CITA Biomedical, Inc. (the "Company" or "CITA(R)"), was incorporated in Colorado on June 9, 1981, under the name "Blue Grass Breeders, Inc." The Company was originally formed for the purpose of engaging in the business of acquiring, breeding, racing and selling thoroughbred horses. The Company completed an initial public offering of its $.0l par value common shares in February 1983, receiving net proceeds of approximately $2,134,000. From March 1987 to May 1989, the Company engaged in the business of breeding and selling horses. The Company was dormant from May 1989 through 1997.

On December 15, 1997 a special meeting of shareholders of the Company was...