##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549




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Form 10-K/A

(Amendment No. 1)


|                                            |  |                                                                                         
|------------------------------------------- |  | ----------------------------------------------------------------------------------------
|(Mark One)                                  |  |                                                                                         
|þ                                           |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                           
|                                            |  | For the financial year ended December 31,
    2003                                      
|                                           
|OR                                         
|                                           
|oOF
    THE SECURITIES EXCHANGE ACT OF 1934 |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d)                                   
|                                            |  | For the transition period
    from          to                                          

Commission file number 001-15459



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Horizon Medical Products, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                                                    |  |                                                   
|--------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Georgia(State or other jurisdiction of
    incorporation or organization)                           |  | 58-1882343(I.R.S. Employer
    Identification No.)
|                                                                                                   
|One Horizon Way
    P.O. Box 627
    Manchester, GeorgiaAddress of principal executive
    offices) |  | 31816(Zip Code)                                   

(Registrants telephone number, including
area code):

(706) 846-3126


Securities registered pursuant to
Section 12(b) of the Act:

Common Stock, $.001 Par Value

Securities registered pursuant to
Section 12(g) of the Act:

None

Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the
past
90 days. Yes þ     No o

Indicate
by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any amendment to this
Form 10-K. o

Indicate
by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of
1934). Yes o     No þ

The
aggregate market value of the voting stock held by
non-affiliates of the Registrant was $9,326,005 on June 30,
2003, based on the closing sale price of such stock on The
American Stock Exchange.

The
number of shares outstanding of the Registrants Common
Stock, $.001 par value, as of March 26, 2004 was
43,943,653.



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TABLE OF CONTENTS









|                                    |  |                                                                                                        |    |      |    | 
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------ | -- | ---- | -- | 
|                                    |  |                                                                                                        |    | Page
|                                    |  |                                                                                                        |    |     
|PART III                           
|Item 10.                            |  | Directors and Executive
    Officers of the Registrant                                                 |    |      | 1  | 
|                                    |  | Directors                                                                                              |    |      | 1  | 
|                                    |  | Executive Officers and Key Employees                                                                   |    |      | 3  | 
|                                    |  | Audit Committee and Determination of Audit
    Committee Financial Expert                              |    |      | 4  | 
|                                    |  | Section 16(a) Beneficial Ownership Reporting
    Compliance                                            |    |      | 4  | 
|                                    |  | Code of Ethics                                                                                         |    |      | 4  | 
|Item 11.                            |  | Executive Compensation                                                                                 |    |      | 4  | 
|                                    |  | Employment Agreements                                                                                  |    |      | 4  | 
|                                    |  | Summary Compensation Table                                                                             |    |      | 11 | 
|                                    |  | Option Grants in Last Fiscal Year                                                                      |    |      | 12 | 
|                                    |  | Option Exercises and Values for Fiscal 2003                                                            |    |      | 13 | 
|                                    |  | Director Compensation                                                                                  |    |      | 13 | 
|                                    |  | Compensation Committee Interlocks and Insider
    Participation                                        |    |      | 15 | 
|                                    |  | Report of the Compensation Committee on Executive
    Compensation                                     |    |      | 16 | 
|                                    |  | Performance Graph                                                                                      |    |      | 18 | 
|Item 12.                            |  | Security Ownership of
    Certain Beneficial Owners and Management and Related Stockholder
    Matters |    |      | 19 | 
|                                    |  | Equity Compensation Plan Information                                                                   |    |      | 19 | 
|                                    |  | Security Ownership of Certain Beneficial Owners
    and Management                                     |    |      | 20 | 
|Item 13.                            |  | Certain Relationships and
    Related Transactions                                                     |    |      | 22 | 
|Item 14.                            |  | Principal Accountant Fees
    and Services                                                             |    |      | 22 | 
|Exhibit Index                       |  |                                                                                                        | 25 |     
|EX-31.1 CERTIFICATION OF THE C.E.O.
|EX-31.2 CERTIFICATION OF THE P.F.O.
|EX-32.1 CERTIFICATION OF THE C.E.O.
|EX-32.2 CERTIFICATION OF THE P.F.O.






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EXPLANATORY NOTE

Pursuant to the rules and regulations of the
Securities and Exchange Commission, this Amendment No. 1
(this Amendment) on Form 10-K/ A is being filed
to amend Items 10, 11, 12, 13 and 14 of Part III of
the Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 of Horizon Medical Products, Inc.
(the Company), which was filed March 30, 2004
(the Annual Report). Other than as set forth in the
preceding sentence, the Company has not undertaken to update,
add or otherwise amend any information contained or incorporated
by reference into the Annual Report.




PART III









|         |                                                       
|-------- | ------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant




DIRECTORS

The Board of Directors of the Company currently
consists of seven (7) directors. Each directors term
expires at each annual meeting, and our shareholders must elect
seven individuals to serve as our Board of Directors until the
following years annual meeting.




Pursuant to the Amended and Restated
Securityholders Agreement entered into by and among the Company,
ComVest Venture Partners, L.P. (ComVest),
Medtronic, Inc., Standard Federal Bank, National
Association and Marshall B. Hunt (the Securityholders
Agreement), which amended an agreement originally entered
into in connection with the Companys March 2002
recapitalization (the Recapitalization), ComVest
currently has the right to appoint two designees and one
additional director who is independent in accordance
with the rules and regulations of the American Stock Exchange.
Additionally, Medtronic has the right to designate one
independent director to the Board of Directors, ComVest and
Medtronic have the right to jointly designate one independent
director, and the Companys Board of Directors has the
right to designate two members of senior management as directors
of the Company. Effective October 31, 2003, the Board of
Directors appointed Dr. David Ku, Robert L. Priddy and
Robert J. Wenzel to its Board of Directors, concurrently
with the resignations of directors H. Ross
Arnold, III, William E. Peterson, Jr. and
A. Gordon Tunstall from the Board. Pursuant to the terms of
the Securityholders Agreement, the current membership of the
Board of Directors is comprised as follows: (i) ComVest has
designated Messrs. Blue and Priddy as its directors and
Mr. Brands as an independent director; (ii) Medtronic
has designated Mr. Tucker as an independent director;
(iii) ComVest and Medtronic have jointly designated
Dr. Ku as an independent director; and (iv) the Board
of Directors has designated Mr. Wenzel and Mr. Hunt as
management directors.




|                         |  |     |    |          |  |  |          | 
|------------------------ |  | --- | -- | -------- |  |  | -------- | 
|Name                     |  | Age |    | Position
|                         |  |     |    |         
|Harold Blue              |  |     | 42 |          |  |  | Director | 
|James E. Brands          |  |     | 66 |          |  |  | Director | 
|David A. Ku, Ph.D., M.D. |  |     | 47 |          |  |  | Director | 
|Marshall B. Hunt         |  |     | 48 |          |  |  | Director | 
|Robert L. Priddy         |  |     | 57 |          |  |  | Director | 
|Robert D. Tucker         |  |     | 70 |          |  |  | Director | 
|Robert J. Wenzel         |  |     | 53 |          |  |  | Director | 

Harold Blue.Mr. Blue, 42, joined the Companys Board of Directors
in March 2003. Mr. Blue has been president of Commonwealth
Group Holdings, LLC, a merchant banking operation, since June
2000. From 1993 until June 2000, he served as the Chairman and
Chief Executive Officer of Proxymed, Inc., an electronic
healthcare transaction processing services company.
Mr. Blue currently serves on the Board of Directors of
Notify Technology Corp. (where he also serves on the
compensation committee), a communications application service
provider of wireline and wireless messaging
services, Inoveris, and Commonwealth Group Holdings.

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James E. Brands.Mr. Brands, 66, joined the Companys Board of
Directors in April 2003. Mr. Brands is the founder of
Brands & Co., which provides business and financial
consulting services, and has been active as Principal in such
business from time to time since 1982. From April 1999 until
September 2001, Mr. Brands served as Senior Executive Vice
President of Able Telcom Holding Corp., whose principal
businesses were development of telecommunications networks and
intelligent highway systems throughout the United
States and in other parts of the world. From November 1997 until
April 1999, he was the Chief Financial Officer of Wilson Pest
Control, a consolidation of companies providing pest control
services.

Marshall B. Hunt.Mr. Hunt, 48, has been a director since the Companys
inception in 1990 and is a co-founder of the Company. He served
as the Companys Chief Executive Officer from the
Companys inception in 1990 through January 2004, except
for the period from October 23, 2001 through March 15,
2002. During this period, Mr. Hunt continued to serve as an
employee of Horizon (but not as an officer or director, as
required by the Forbearance Agreement entered into in 2001), and
was responsible for identifying and exploring refinancing
opportunities. Mr. Hunt has served as the Companys
Chairman of the Board since 1997 (except for the period from
October 23, 2001 through March 15, 2002). Prior to
co-founding the Company, Mr. Hunt co-founded Cardiac
Medical, Inc., or CMI, a distributor of cardiac pacemakers,
in 1987, and served as its Chief Executive Officer until October
1997. Mr. Hunt currently serves as Secretary of CMI. In
1981, Mr. Hunt founded Hunt Medical Systems, Inc., a
distributor of pacemaker products, and served as its President
from 1981 to 1987. From 1979 through 1981, Mr. Hunt held
various sales and management positions with American Hospital
Supply Corporation.

David A.
Ku, Ph.D., M.D.Dr. Ku,
47, joined the Companys Board of Directors in October
2003. Dr. Ku is currently a regents Professor of Mechanical
Engineering at the Georgia Institute of Technology and a
vascular surgeon. Dr. Ku has served in such roles for
18 years. He has been the Fulbright Gastprofessor in
Munich, Germany, and a Fellow in Cardiovascular Pathology at the
University of Chicago. In addition, Dr. Ku is a licensed
medical doctor in the state of Georgia. Dr. Ku is also the
Chief Executive Officer of SaluMedica, LLC, a medical device
company which develops orthopedic implants. Dr. Ku holds
patents on a number of devices, has been published in numerous
medical journals, and has done extensive research in the areas
of Bioengineering and Fluid Mechanics.

Robert L. Priddy.Mr. Priddy, 57, joined the Companys Board of
Directors in October 2003. Mr. Priddy is currently Chairman
and CEO of RMC Capital, LLC, an investment firm. He founded that
company in 1995. Mr. Priddy was also the Chairman and CEO
of ValuJet Airlines from its inception in 1993 to its merger
with AirTran Airways in 1997. Mr. Priddy was also a founder
of Atlantic Southeast Airlines and Florida Gulf Airlines. He is
on the Boards of AirTran Holdings, Bankserv, Inoveris, and
Microsulis Medical. Mr. Priddy is also a General Partner in
the ComVest II private equity fund. This fund specializes
in corporate restructuring.

Robert D. Tucker.Mr. Tucker, 70, joined the Companys Board of
Directors in March 2002. Since February 1996, Mr. Tucker
has served as Chairman and Chief Executive Officer of Maximum
Benefits, LLC, a telecommunications company founded by
Mr. Tucker in 1995, which markets long distance and
internet services. From May 1997 to January 2001,
Mr. Tucker served as President and Chief Executive Officer
of Specialty Surgicenters, Inc., a developer, owner and
manager of outpatient surgery centers.

Robert J. (Bob)
Wenzel.Mr. Wenzel, 53, joined
the Companys Board of Directors in October 2003.
Mr. Wenzel currently serves as the Companys
President, Chief Operating Officer and Interim Chief Executive
Officer. Mr. Wenzel became Chief Operating Officer of the
Company in May 2002 and was named President, effective
July 1, 2003. He assumed the role of Interim Chief
Executive Officer in January 2004. Between 2001 and 2002,
Mr. Wenzel was a consultant with Impact Consulting Group in
Chanhassen, Minnesota, where he provided assistance to
distressed small- to medium-sized organizations by assisting
management in the development and implementation of business
plans. In addition, Mr. Wenzel served as Chief Operating
Officer for Virtual Fund, Inc. from 1991 until 2001 and as
President of ColorSpan Corporation (formally known as
LaserMaster) between 1989 and 2000.

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EXECUTIVE OFFICERS AND KEY EMPLOYEES

Executive Officers

|                  |  |     |    |          |  |                                                                             |  |  |      | 
|----------------- |  | --- | -- | -------- |  | --------------------------------------------------------------------------- |  |  | ---- | 
|                  |  |     |    |          |  | Executive                                                                  
|                  |  |     |    |          |  | Officer                                                                    
|Name              |  | Age |    | Position |  | Since                                                                      
|                  |  |     |    |          |  |                                                                            
|Robert J. Wenzel  |  |     | 53 |          |  | President, Chief Operating Officer, and Interim
    Chief Executive Officer |  |  | 2002 | 
|Robert R. Singer  |  |     | 38 |          |  | Vice President  Sales                                                      |  |  | 1999 | 
|L. Bruce Maloy    |  |     | 40 |          |  | Vice President  Administration and
    Secretary                           |  |  | 1998 | 
|Elaine G. Swygert |  |     | 41 |          |  | Corporate Controller                                                        |  |  | 2004 | 

Robert J. (Bob)
Wenzel.Mr. Wenzel, 53, currently
serves as the Companys President, Chief Operating Officer
and Interim Chief Executive Officer. Mr. Wenzel is also a
member of the Companys Board of Directors. Mr. Wenzel
became Chief Operating Officer of the Company in May 2002 and
was named President, effective July 1, 2003. He assumed the
role of Interim Chief Executive Officer in January 2004. Between
2001 and 2002, Mr. Wenzel was a consultant with Impact
Consulting Group in Chanhassen, Minnesota, where he provided
assistance to distressed small- to medium-sized organizations by
assisting management in the development and implementation of
business plans. In addition, Mr. Wenzel served as Chief
Operating Officer for Virtual Fund, Inc. from 1991 until
2001 and as President of ColorSpan Corporation (formally known
as LaserMaster) between 1989 and 2000.

Robert R. Singer.Mr. Singer, 38, has served as the Vice President of Sales
since 1999. Mr. Singer joined Horizon in 1990 as a sales
representative in East Tennessee. In 1991, he was transferred to
Atlanta to cover the Georgia territory. Prior to assuming his
current position, Mr. Singer served as National Sales
Manager from 1997 to 1999. Mr. Singer began his sales
career in 1987 as an account executive with Mixon-Baker
Financial in Atlanta.

L. Bruce Maloy.Mr. Maloy, 40, joined the Company in 1990 in its sales and
marketing department and has served as the Vice
President  Administration of the Company since 1996
and Secretary since 2004. From 1990 to 1996, Mr. Maloy
served in various capacities at the Company, including Regional
Manager from 1991 to 1993, National Sales Manager from 1993 to
1995, and Director of Marketing from 1995 to 1996.

Elaine G. Swygert.Mrs. Swygert, 41, has served as Corporate Controller since
September 2000 and was named an executive officer by the Board
of Directors in February 2004. From joining the Company in
September 1999 to September 2000, she served as Director of
Budgets, Planning and Credit/Collections. Prior to joining
Horizon, from 1993-1999, she was a co-owner and manager of a
family owned business, Four Point L.P. Gas Company, Inc., a
propane marketer. From 1990-1993, Mrs. Swygert was
Financial Reporting Manager for Sales Technologies, a sales
force automation division of Dun & Bradstreet
Corporation. Other experience includes Assistant Controller and
SEC Compliance Manager of IMTECH from 1988-1990 and from
1985-1988, as well as various staff accountant positions,
including Senior Accountant with Coopers & Lybrand, now
PricewaterhouseCoopers LLP. Mrs. Swygert is a certified
public accountant.

Key Employees

|                  |  |     |    |          |  |                                 |  |  |      | 
|----------------- |  | --- | -- | -------- |  | ------------------------------- |  |  | ---- | 
|Name              |  | Age |    | Position |  | Since                          
|                  |  |     |    |          |  |                                
|Michael J. Fowler |  |     | 42 |          |  | Vice President of Manufacturing |  |  | 2001 | 
|A. David Smith    |  |     | 33 |          |  | Vice President of Engineering   |  |  | 2000 | 

Michael J. Fowler.Mr. Fowler, 42, became Vice President of Manufacturing for
the Company in September 2001. He joined Horizon as Director of
Manufacturing in March 1999. Prior to joining Horizon, he was a
Senior Manufacturing Engineer and between 1992 and 1999 served
in various manufacturing and plant support functions with the
medical division of C. R. Bard, Inc., a developer,
manufacturer and marketer of

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vascular, urological and oncological diagnosis
and intervention products. Additionally, from 1989 to 1992,
Mr. Fowler was a Senior Industrial Engineer with Baxter
Healthcare Corporation.


A. David Smith.Mr. Smith, 33, became Horizons Vice President of
Engineering in November 2000. From May 1998 until November 2000,
he was an engineering manager for Horizon. Mr. Smith began
working for the Company in June 1997 as a production supervisor.

AUDIT COMMITTEE AND DETERMINATION OF

AUDIT COMMITTEE FINANCIAL EXPERT


The Board has established an Audit Committee. The
Audit Committee is responsible for nominating the Companys
independent auditors for approval by the Board of Directors,
reviewing the scope, results and costs of the audit with the
Companys independent auditors, and reviewing the financial
statements and accounting practices of the Company. The Audit
Committee is governed by a written charter adopted by the Board
of Directors. During 2003, the Audit Committee met five times.
The members of the Audit Committee are Dr. Ku,
Mr. Tucker, and Mr. Brands. Our Board of Directors has
determined through the exercise of its business judgment that
Mr. Brands is an audit committee financial
expert as defined in the rules and regulations of the
Securities and Exchange Commission and is financially
sophisticated as defined in the rules and regulations of
the American Stock Exchange. Mr. Brands, Dr. Ku, and
Mr. Tucker are all independent as such term is
defined in both the rules and regulations of the Securities and
Exchange Commission and the rules and regulations of the
American Stock Exchange.

SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act
of 1934 requires the Companys directors and executive
officers and persons who own more than 10% of a registered class
of the Companys equity securities to file with the SEC
initial reports of ownership and statements of changes in
ownership of common stock and other equity securities of the
Company. Based solely upon a review of such reports furnished to
the Company and certain representations of such persons, all
such persons complied with the Section 16(a) reporting
requirements during 2002, except that: (1) Form 4s for
Mr. Maloy were inadvertently filed late relating to
(i) an option granted on September 27, 2002 for
40,000 shares which vested on March 27, 2003,
(ii) an option for 30,000 shares granted on
May 30, 2003 and (iii) an option granted on
October 21, 2003 for 25,000 shares,
(2) Form 4s for Mr. Singer were inadvertently
filed late relating to (i) an option granted on
May 30, 2003 for 30,000 shares, (ii) an option
granted on October 21, 2003 for 25,000 shares, and
(3) a Form 4 for Mr. Hunt was inadvertently filed
late relating to an option granted on October 21, 2003 for
500,000 shares.

CODE OF ETHICS

The Company has adopted a Code of Business
Conduct and Ethics (the Code of Ethics), applicable
to the Companys officers, directors and employees, which
includes the code of ethics applicable to the Companys
senior executive and financial officers. This Code of Ethics is
filed as an exhibit to the Annual Report.






|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

EMPLOYMENT AGREEMENTS

Employment Agreement with Marshall B.
Hunt.Mr. Hunt is our Chairman of
the Board and our former Chief Executive Officer. While no
longer an employee of the Company, the Securities and Exchange
Commission requires that the Company describe the compensation
paid by us to Mr. Hunt pursuant to the terms of his
employment arrangements. The following section details such
compensation.

In connection with the Recapitalization, the
Company entered into an employment agreement with Mr. Hunt
on March 16, 2002 (the Hunt Employment
Agreement). In the Hunt Employment Agreement,

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Mr. Hunts base salary was established
at $270,000, with the opportunity to earn an annual bonus of
100% of base salary if the annual increase in the Companys
earnings per share was 35% or more and 50% of base salary if the
annual increase in the Companys earnings per share was at
least 25% but less than 35%. The Hunt Employment Agreement
provided that Mr. Hunt was entitled to participate in all
compensation, benefit and insurance programs maintained by the
Company in which executive officers were eligible to participate
and for certain other benefits, including reimbursement for
reasonable family medical and dental expenses which were not
covered by insurance, an automobile lease and certain
reimbursements for country club dues. The term of the Hunt
Employment Agreement was 12 months (until March 16,
2003). If Mr. Hunt was terminated by the Company without
cause (as defined in the Hunt Employment Agreement) either
during the term of the Hunt Employment Agreement or thereafter,
then he would have been entitled to one year severance of his
base salary and certain employee benefits.


By amendment, effective November 15, 2002,
the term of the Hunt Employment Agreement was extended to
April 1, 2004, Mr. Hunts base salary was
increased to $283,500 per year, the Executive Committee
granted options to Mr. Hunt to purchase
1,000,000 shares of the Companys common stock (as
described below), and the annual bonus calculation described
above was replaced with a new bonus calculation for 2003. Under
the bonus calculation for 2003, Mr. Hunt was entitled to an
annual bonus based upon the Companys achievement during
2003 of certain levels of net sales and EBITDA when compared
with the Companys net sales and EBITDA in its operating
plan for 2003 approved by its Board of Directors (the
Operating Plan), as follows: (i) if the
Companys actual annual net sales during 2003 were greater
than fifty percent (50%) of net sales for 2003 as
reflected in the Operating Plan, Mr. Hunt was entitled to a
bonus of one-half (1/2) of his base salary in 2003 times
the applicable bonus percentage, and (ii) if the
Companys actual annual EBITDA for 2003 was greater than
fifty percent (50%) of the EBITDA for 2003 as
reflected in the Operating Plan, then Mr. Hunt was entitled
to a bonus of one-half (1/2) of his base salary in 2003
times the applicable bonus percentage. This
applicable bonus percentage was determined by dividing actual
annual net sales by Operating Plan net sales for 2003 (and
actual annual EBITDA by Operating Plan EBITDA for 2003): where
the result of such division was greater than
fifty percent (50%), but less than
seventy-six percent (76%), the applicable bonus
percentage is fifty percent (50%), where the result of
such division was seventy-six percent (76%) or more,
but less than one hundred percent (100%), the
bonus percentage was seventy-five percent (75%), and
where the result of such division is
one hundred percent (100%) or greater, the
applicable bonus percentage was
one hundred percent (100%).

In connection with the Hunt Employment Agreement,
Mr. Hunt was granted options to purchase
3,500,000 shares (the Hunt Options) of the
Companys common stock at the exercise price of
$0.45 per share, of which 2,500,000 shares vested and
became exercisable immediately with a term of ten years. The
terms of the Hunt Options provide that the remaining
1,000,000 shares would vest and become exercisable after
the earliest to occur of the following: (i) January 1,
2004, provided that the Companys net income before any
provision for income taxes is at least $8 million for the
fiscal year ending December 31, 2003, which amount is to be
adjusted appropriately in the event that the Company sells any
of its operating assets or divisions and reduces its debt,
(ii) the date on which the Company consummates a merger,
consolidation or sale or disposition of all or substantially all
of its stock or assets, or (iii) the date on which the
Company terminates the employment of Mr. Hunt for other
than good cause (as defined in the Hunt Employment Agreement) if
such termination date occurs prior to January 1, 2004. In
an amendment to the Hunt Options on November 15, 2002, the
vesting requirement in clause (i) above was modified to
provide that the Hunt Options representing 1,000,000 shares
vest and become exercisable on January 1, 2004 based upon
the Companys achievement during 2003 of certain levels of
EBITDA under the Operating Plan, as follows: If the actual
EBITDA for 2003 was greater than 50% of Operating Plan EBITDA
for 2003, then the number of shares which would vest would be
calculated by multiplying 1,000,000 times the vesting
percentage. The vesting percentage is determined by dividing
actual EBITDA for 2003 by operating EBITDA for 2003; where the
result of such division is greater than 50%, but less than 76%,
the vesting percentage is 50%, where the result of such division
is 76% or more, but less than 100%, the vesting percentage is
75%, and where the result of such division is 100% or greater,
the vesting percentage is 100%.

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By amendment to the Hunt Employment Agreement
effective October 21, 2003, the term of the Hunt Employment
Agreement was extended through January 31, 2006 (subject to
the right of the Company to terminate the Agreement upon notice
with cause (as defined therein) or upon 120 days prior
notice without cause or the right of Mr. Hunt to terminate
the agreement upon 120 days prior written notice).
Mr. Hunts salary was increased to $315,000. Such
amendment also outlined the bonus structure for Mr. Hunt
for fiscal years 2004 and 2005. Such structure is irrelevant, as
Mr. Hunt is no longer an employee of the Company. The
remainder of Mr. Hunts rights and benefits under the
Hunt Employment Agreement remained unchanged.

Under the Hunt Employment Agreement, if a change
in control event were to occur at any time when Mr. Hunt is
receiving severance payments from the Company, then he would
have been entitled to receive, in lieu of such severance
compensation and benefits, his base salary for each of the three
years following such change in control event. A change in
control event was defined as one of the following transactions
that occurs prior to March 16, 2005: (i) the adoption
of a plan of merger or consolidation as a result of which the
holders of the outstanding voting stock of the Company as a
group receive less than fifty percent of the voting stock of the
surviving or resulting corporation, or (ii) the sale of
substantially all of the assets of the Company, and as a result
of either transaction the shareholders of the Company receive
cash and/or securities valued on the date of the transaction at
$3.00 or more per share. This provision, among others, was
superceded by the Separation Agreement described below.

On January 14, 2004, the Company and
Mr. Hunt entered into a Separation Agreement (the
Separation Agreement) in connection with
Mr. Hunts resignation as Chief Executive Officer of
the Company. The Separation Agreement generally supercedes and
replaces the Hunt Employment Agreement. Pursuant to the
Separation Agreement, the Company agreed to provide
Mr. Hunt with the following severance payments: (i) a
bonus equal to $181,084 (representing the 2003 bonus
Mr. Hunt was entitled to), (ii) a bonus equal to
$105,000, representing a portion of the 2004 bonus payable to
Mr. Hunt, payable on April 1, 2005, (iii) salary
equal to $105,000, payable in installments between
January 1, 2004 and April 30, 2004, (iv) salary
equal to $315,000, payable in installments between May 1,
2004 and April 30, 2005, (v) a bonus equal to
$128,267, payable on January 1, 2005, and (vi) a bonus
equal to $52,816, payable in installments between
January 15, 2005 and April 30, 2005. In addition, the
Company will reimburse Mr. Hunt for certain automobile
expenses and certain reasonable medical and dental expenses not
covered by insurance for a period continuing through April 2005.

Also, under the Separation Agreement, the Company
affirmed its obligations to Mr. Hunt under (i) the
non-qualified stock option agreement dated March 15, 2002,
(ii) the non-qualified stock option agreement dated
March 15, 2002 (as amended on November 15, 2002),
(iii) the stock option agreement contained in the
November 15, 2002 amendment to the Hunt Employment
Agreement, (iv) the non-qualified stock option agreement
dated February 23, 2003, and (v) the stock option
agreement dated October 21, 2003. Notwithstanding the
above, the Separation Agreement provides that (i) only
500,000 shares (out of a possible 1,000,000) have vested or
will vest under the March 15, 2002 non-qualified stock
option agreement (as amended on November 15, 2002); and
(ii) Mr. Hunt will have until January 16, 2006 to
exercise the options granted on November 15, 2002 pursuant
to the 1998 Stock Incentive Plan.

Employment Agreement with William E.
Peterson, Jr.Mr. Peterson
is our former President. While no longer an employee of the
Company, the Securities and Exchange Commission requires that
the Company describe the compensation paid by us to
Mr. Peterson pursuant to the terms of his employment
arrangements. The following section details such compensation.

In connection with the Recapitalization, the
Company entered into an employment agreement with
Mr. Peterson on March 16, 2002 (the Peterson
Employment Agreement). Mr. Petersons base
salary was established at $225,000, with the opportunity to earn
an annual bonus of 100% of base salary if the annual increase in
the Companys earnings per share was 35% or more and 50% of
base salary if the annual increase in the Companys
earnings per share was at least 25% but less than 35%. The
Peterson Employment Agreement provided that Mr. Peterson
was entitled to participate in all compensation, benefit and
insurance programs maintained by the Company in which executive
officers were eligible to participate and for certain other
benefits, including reimbursement for reasonable family medical
and dental expenses which were not covered

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by insurance, automobile leases and certain
reimbursements for country club dues. The term of the Peterson
Employment Agreement was six months (September 16, 2002).
If Mr. Peterson was terminated by the Company without cause
(as defined in the Peterson Employment Agreement) either during
the term of the Peterson Employment Agreement or thereafter,
then he would have been entitled to one year severance of his
base salary and certain employee benefits.


By amendment, effective September 16, 2002,
the term of the Peterson Employment Agreement was extended to
March 16, 2003, and the Peterson Employment Agreement was
amended to provide that if the Company terminated his employment
without good cause (as defined in the Peterson Employment
Agreement) or if Mr. Peterson terminated his employment by
leaving the Company at any time from September 17, 2002
through March 16, 2003, then the Company would continue to
pay Mr. Peterson his base salary for twelve
(12) months after such termination, plus any unpaid bonus
for 2002, and provide certain employee benefits during such
period. By amendment to the Peterson Employment Agreement,
effective March 7, 2003, the term of the Peterson
Employment Agreement was extended to December 31, 2003 and
the annual bonus calculation described above was replaced with a
new bonus calculation for 2003. Under the bonus calculation for
2003, Mr. Peterson had the opportunity to earn quarterly
bonuses of $20,000 if management business objectives established
for him by the Chief Executive Officer of the Company and by the
Executive Committee, both for the quarter in question and for
the year to date through the end of such quarter, were
satisfied. Further, such amendment provided that if
Mr. Petersons employment with the Company ended via a
termination by the Company without good cause or if
Mr. Peterson left the Company, between March 7, 2003
and December 31, 2003, then he would be entitled, in
addition to other compensation due him, to receive his normal
base salary for twelve months following such termination.

In connection with the Peterson Employment
Agreement, Mr. Peterson was granted options to purchase
1,000,000 shares (the Peterson Options) of the
Companys common stock at the exercise price of
$0.45 per share. The Peterson Options vested and were
exercisable immediately. The Peterson Options have a term of ten
years.

Pursuant to an amendment to the Peterson
Employment Agreement dated June 17, 2003, Mr. Peterson
agreed to relinquish the title of President effective
June 30, 2003 and the term of the Peterson Employment
Agreement was extended to January 31, 2004 Under such
amendment, effective June 30, 2003 Mr. Peterson
transitioned to Vice-Chairman of the Company and his salary was
reduced to $112,500. Further pursuant to such amendment, upon
the resignation of Mr. Peterson or the termination of
Mr. Peterson by the Company without good cause
prior to January 31, 2004, Mr. Peterson would remain
entitled to the continued provision of a $225,000 salary for a
period of one year following the end of his employment.

Effective January 30, 2004,
Mr. Peterson ended his employment with the Company. As
already noted, Mr. Peterson remains entitled to severance
of $225,000 through January 30, 2005. In addition, through
such period, Mr. Peterson remains entitled to participate
in all compensation, benefit and insurance programs maintained
by the Company in which executive officers are eligible to
participate and certain other benefits, including reimbursement
for reasonable family medical and dental expenses which are not
covered by insurance, and automobile leases. Mr. Peterson
was also entitled to any bonus earned by him prior to his
resignation, but no such bonus was earned.

If a change in control event occurs at any time
when Mr. Peterson is receiving severance payments from the
Company, then he is entitled to receive, in lieu of such
severance compensation and benefits, his base salary for each of
the three years following such change in control event. A change
in control event is defined as one of the following transactions
that occurs prior to March 16, 2005: (i) the adoption
of a plan of merger or consolidation as a result of which the
holders of the outstanding voting stock of the Company as a
group receive less than fifty percent of the voting stock of the
surviving or resulting corporation, or (ii) the sale of
substantially all of the assets of the Company, and as a result
of either transaction the shareholders of the Company receive
cash and/or securities valued on the date of the transaction at
$3.00 or more per share.

Employment Agreement with Robert J.
Wenzel.The Company entered into an
employment agreement with Robert J. Wenzel dated
May 8, 2002 (the Wenzel Employment Agreement),
which initially provided for Mr. Wenzel to serve as the
Companys Chief Operating Officer. The initial term of the
Wenzel

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Employment Agreement expired on December 31,
2002. The Wenzel Employment Agreement initially provided that
Mr. Wenzel was eligible to earn bonus compensation of
$65,000 if the management business objectives established for
Mr. Wenzel by the Companys Chief Executive Officer
and the Executive Committee of the Board for the third and
fourth quarters of 2002 were satisfied.


Pursuant to the Wenzel Employment Agreement, the
Executive Committee has granted Mr. Wenzel options to
purchase 250,000 shares of the Companys common stock
under the Companys 1998 Incentive Stock Plan, as amended
(the Plan). 100,000 shares became exercisable
on December 31, 2002 and an additional 50,000 shares
became exercisable on December 31, 2003. The remaining
100,000 options become exercisable as follows: one-half on
December 31, 2004 if Mr. Wenzel is an employee on such
date, and the remaining one-half on December 31, 2005 if
Mr. Wenzel is an employee on such date.

By amendment to the Wenzel Employment Agreement,
effective November 12, 2002, the term of
Mr. Wenzels employment was extended through
December 31, 2003, his base salary for 2003 was increased
to $225,000 and his bonus compensation during 2003 was
established as a quarterly bonus of $20,000 if the management
business objectives established for him by the Chief Executive
Officer of the Company and by the Executive Committee, both for
the quarter in question and for the year to date through the end
of such quarter, were satisfied. Pursuant to such Amendment to
the Wenzel Employment Agreement, the Executive Committee granted
Mr. Wenzel options to purchase an additional
350,000 shares of the Companys common stock under the
Plan. On December 31, 2003, 70,945 of these options became
exercisable. The remaining options become exercisable as
follows: 70,945 shares become exercisable on
December 31, 2004 if Mr. Wenzel continues as an
employee until that date, and 208,110 shares become
exercisable on December 31, 2005 if Mr. Wenzel
continues as an employee until such date.

By further amendment to the Wenzel Employment
Agreement, effective October 31, 2003, the term of
Mr. Wenzels employment was extended through
October 31, 2005 and his base salary was increased to
$250,000. Under such amendment, Mr. Wenzel may earn
quarterly bonuses during 2004 based on the Companys
achievement of net sales and/or EBITDA levels under the
Companys 2004 Operating Plan as approved by the Board of
Directors (the 2004 Operating Plan).
Mr. Wenzels bonus schedule is as follows: (i) if
the Companys actual net sales during a calendar quarter
are ninety-five percent (95%) or greater than, but less than one
hundred percent (100%), of the net sales established by the 2004
Operating Plan for the same calendar quarter, then
Mr. Wenzel would be entitled to a $6,250 bonus;
(ii) if the Companys actual net sales during a
calendar quarter are one hundred percent (100%) or greater than
the net sales established by the 2004 Operating Plan for the
same calendar quarter, then Mr. Wenzel would be entitled to
a $12,500 bonus; (iii) if the Companys actual EBITDA
during a calendar quarter is eighty-two percent (82%) or greater
than, but less than one-hundred percent (100%), of EBITDA
established by the 2004 Operating Plan for the same calendar
quarter, then Mr. Wenzel would be entitled to a $6,250
bonus; and (iv) if the Companys actual EBITDA during
a calendar quarter is one-hundred percent (100%) or greater than
the EBITDA established by the 2004 Operating Plan for the same
calendar quarter, then Mr. Wenzel would be entitled to a
$12,500 bonus. Mr. Wenzel may earn a net sales bonus and a
EBITDA bonus. Mr. Wenzel is entitled to participate in all
benefit and insurance programs maintained by the Company in
which executive officers are eligible to participate, to have an
automobile allowance, and to have a monthly commute expense
allowance.

By further amendment to the Wenzel Employment
Agreement, dated February 25, 2004, the Company and
Mr. Wenzel agreed upon the terms through which
Mr. Wenzels 2004 bonus shall be calculated. Under
such amendment, Mr. Wenzel may earn quarterly bonuses
during 2004 based on the Companys achievement of net sales
and/or EBITDA levels under the 2004 Operating Plan.
Mr. Wenzels bonus schedule is as
follows: (i) if the Companys actual net sales
during a calendar quarter are ninety-four percent (94%) or
greater than, but less than one hundred percent (100%), of the
net sales established by the 2004 Operating Plan for the same
calendar quarter, then Mr. Wenzel would be entitled to a
$6,250 bonus; (ii) if the Companys actual net sales
during a calendar quarter are one hundred percent (100%) or
greater than the net sales established by the 2004 Operating
Plan for the same calendar quarter, then Mr. Wenzel would
be entitled to a $12,500 bonus; (iii) if the Companys
actual EBITDA during a calendar quarter is seventy-five percent
(75%) or greater than, but less than one-hundred percent (100%),
of EBITDA established by the

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2004 Operating Plan for the same calendar
quarter, then Mr. Wenzel would be entitled to a $6,250
bonus; and (iv) if the Companys actual EBITDA during
a calendar quarter is one-hundred percent (100%) or greater than
the EBITDA established by the 2004 Operating Plan for the same
calendar quarter, then Mr. Wenzel would be entitled to a
$12,500 bonus. In the event the Company sells a product line or
division during 2004 or in the event the Company is acquired by
a third party during 2004, then Mr. Wenzels bonus for
the quarter in which such event occurs shall be calculated using
actual net sales and EBITDA through the month end immediately
prior to such sale or acquisition and using net sales and EBITDA
under the 2004 Operating Plan through such month end. Such
amendment also establishes Mr. Wenzels 2005 bonus
structure. Such structure is substantially the same as the 2004
structure, except that the applicable bonus amounts of $6,250
and $12,500 are increased to $7,500 and $15,000, respectively.
Moreover, during the period of October 1, 2005 through
October 31, 2005, the Compensation Committee of the Board
of Directors shall determine the bonus compensation earned by
Mr. Wenzel rather than the applicable 2005 bonus structure.


On February 26, 2004, the Company granted
Mr. Wenzel options to purchase an additional
500,000 shares of the Companys common stock at an
exercise price of $1.65 per share. One-third of such
options shall vest and become exercisable on each of
January 1, 2005, January 1, 2006, and January 1,
2007. Such options will vest and become exercisable upon a
change-in-control (as defined therein) of the Company and expire
ninety days following termination of Mr. Wenzels
employment.

The Company must provide Mr. Wenzel with
120 days notice should it decide to terminate his
employment without cause. Further, should the Company terminate
Mr. Wenzels employment without good cause, he would
be entitled to an additional bonus equal to the sum of all
quarterly bonuses paid by the Company to him for the four
previous quarters and for further severance compensation of
twelve months of base salary.

Employment Agreement with Robert
Singer.The Company entered into an
Employment Agreement with Robert Singer dated June 21, 2001
(the Singer Employment Agreement), which provides
for Mr. Singers continued employment as Vice
President of Sales. Initially, the Singer Employment Agreement
had a two year term (subject to the right of the Company to
terminate the Agreement upon notice with cause (as defined
therein) or upon thirty days prior notice without cause or the
right of Mr. Singer to terminate the agreement upon ninety
days prior notice) and provided for an annual base salary of
$150,000. Under the terms of the Singer Employment Agreement,
Mr. Singer was eligible to earn bonus compensation of
$10,000 for each quarter during the term based upon whether the
Companys domestic sales during the calendar quarter
exceeded the amount of sales in the Companys operating
plan for the quarter. The Singer Employment Agreement also
provided that Mr. Singer was entitled to participate in all
benefit and insurance programs maintained by the Company in
which executive officers were eligible to participate and to
have an automobile allowance. Mr. Singer would be entitled
to receive his base salary and benefits for a period of twelve
months from the date of termination in the event his employment
was terminated without cause (as defined), or for a period of
three months from the date of termination where employment is
terminated for failure to meet quarterly or annual sales goals
established by the Company. The Singer Employment Agreement also
provided that Mr. Singer was entitled to a stay
put bonus of $50,000 in the event the Company was acquired
and he remained an employee of the Company through the
acquisition. In the event of an acquisition, Mr. Singer
would be entitled to severance compensation of his base salary
and certain benefits payable over an eighteen month period
(i) if he complies with certain non-competition provisions
and (ii) if he continues his employment through the
acquisition and if he is not offered within sixty days after the
acquisition a position of employment within a fifty mile radius
of his home or his office in Manchester that is acceptable to
him and he then resigns.

Pursuant to an amendment to the Singer Employment
Agreement, Mr. Singers term of employment was
extended through June 21, 2004 (subject to the right of the
Company to terminate the Agreement upon notice with cause (as
defined therein) or upon sixty days prior notice without cause
or the right of Mr. Singer to terminate the agreement upon
sixty days prior notice), and his base salary was increased to
$160,000. In addition, Mr. Singer is eligible to earn a
bonus of $10,000 for each quarter during the term based upon the
Companys performance in terms of revenue and EBITDA and
upon Mr. Singers achievement of quarterly management
business objectives established by the Chief Operating Officer
of the Company. If Mr. Singers

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employment with the Company continues after the
term, Mr. Singer does not have an employment agreement with
the Company and Mr. Singers employment is terminated
without good cause (as defined therein), then the Company shall
continue to pay Mr. Singer his base salary for a period of
six months following the effective date of termination. If
Mr. Singers employment is terminated for good cause,
then the Company shall continue to pay Mr. Singer his base
salary for a period of sixty (60) days. Mr. Singer is
still entitled to participate in all benefit and insurance
programs maintained by the Company in which executive officers
are eligible to participate and to have an automobile allowance.
Moreover, Mr. Singer would still be entitled to the
stay put bonus described above in the event the
Company is acquired and he remains an employee through the
acquisition.


Executive Officers Severance And Bonus
Agreements.The Company is currently a
party to a Severance and Bonus Agreement dated November 12,
1999 with L. Bruce Maloy. Under this agreement, Mr. Maloy
is entitled to a stay put bonus of $50,000 in the event the
Company is acquired and Mr. Maloy remains an employee of
the Company through the acquisition. In the event of an
acquisition, Mr. Maloy is also entitled to severance
compensation ($107,200) payable over a 12-month period
(i) if he complies with certain non-competition provisions
and (ii) if he continues his employment through the
acquisition and is terminated after the acquisition without
cause (as defined in the agreement) or if he is not offered
within 30 days after the acquisition a position of
employment within a 50 mile radius of his home that is
acceptable to Mr. Maloy and he resigns.

The Company is also a party to Bonus Agreements,
entered into in the fourth quarter of 2003, with each of
Mr. Maloy, Robert Singer, and Elaine Swygert. Under these
agreements, each such officer is entitled to receive a
stay-put bonus of $25,000 in the event (i) the
Company pays in full the Convertible Notes issued by the Company
in the Recapitalization or (ii) there has been a sale
of the Company (whichever occurs first), and such officer
is employed by the Company at such time. A sale of the
Company is defined as (a) a sale of all or
substantially all of the assets of the Company for cash or
stock, or (b) a merger or consolidation of the Company with
another entity for cash or stock where the shareholders of the
Company immediately after such merger or consolidation own
thirty-five percent (35%) or less of the stock of the surviving
entity, or (c) a sale of a majority of the issued and
outstanding stock of the Company for cash or stock.

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SUMMARY COMPENSATION TABLE




The following table sets forth information
concerning total compensation earned or paid to the Chief
Executive Officer and certain other executive officers of the
Company (collectively, the named executive officers)
for services rendered to the Company during each of the last
three fiscal years.




|                             |                                      |        |      |                     |  |              |         |                 |  |               |         |         |  |  |        |        |  |  |           |           | 
|---------------------------- | ------------------------------------ | ------ | ---- | ------------------- |  | ------------ | ------- | --------------- |  | ------------- | ------- | ------- |  |  | ------ | ------ |  |  | --------- | --------- | 
|                             |                                      |        |      |                     |  |              |         |                 |  | Long-Term    
|                             |                                      |        |      |                     |  |              |         |                 |  | Compensation 
|                             |                                      |        |      |                     |  |              |         |                
|                             |                                      |        |      | Annual Compensation |  |              |         | Securities     
|                             |                                      | Fiscal |      |                     |  | Other Annual |         | Underlying     
|Name and Principal Positions |                                      | Year   |      | Salary              |  | Bonus(1)     |         | Compensation(2) |  | Options(3)(#)
|                             |                                      |        |      |                     |  |              |         |                 |  |              
|Marshall B. Hunt(4)          |                                      |        | 2003 |                     |  | $            | 289,734 |                 |  | $             | 183,064 |         |  |  |       |        |  |  | 1,000,000 |          
|                             | Chairman of the Board and            |        |      | 2002                |  |              |         | 272,979         |  |               |         | 527,430 |  |  |        |       |  |  |           | 4,500,000 | 
|                             | Former Chief Executive Officer       |        |      | 2001                |  |              |         | 268,125         |  |               |         |        |  |  | $      | 28,586 |  |  |           |          | 
|Robert J. Wenzel(5)          |                                      |        | 2003 |                     |  |              | 228,148 |                 |  |               | 104,100 |         |  |  |       |        |  |  | 500,000   |          
|                             | President, Chief Operating Officer & |        |      | 2002                |  |              |         | 129,546         |  |               |         | 55,000  |  |  |        |       |  |  |           | 600,000   | 
|                             | Interim Chief Executive Officer      |        |      | 2001                |  |              |         |                |  |               |         |        |  |  |        |       |  |  |           |          | 
|William E. Peterson, Jr.(6)  |                                      |        | 2003 |                     |  |              | 168,750 |                 |  |               | 38,400  |         |  |  | 23,101 |        |  |  | 425,000   |          
|                             | Former President and Secretary       |        |      | 2002                |  |              |         | 225,000         |  |               |         | 539,738 |  |  |        |       |  |  |           | 1,000,000 | 
|                             |                                      |        |      | 2001                |  |              |         | 219,375         |  |               |         |        |  |  |        |       |  |  |           |          | 
|Robert R. Singer             |                                      |        | 2003 |                     |  |              | 155,201 |                 |  |               | 32,017  |         |  |  |       |        |  |  | 55,000    | (7)      
|                             | Vice President  Sales               |        |      | 2002                |  |              |         | 150,000         |  |               |         | 26,667  |  |  |        |       |  |  |           | 25,000    | 
|                             |                                      |        |      | 2001                |  |              |         | 146,250         |  |               |         | 20,000  |  |  |        |       |  |  |           | 2,100     | 
|L. Bruce Maloy               |                                      |        | 2003 |                     |  |              | 115,000 |                 |  |               | 46,613  |         |  |  |       |        |  |  | 55,000    | (7)      
|                             | Vice President  Administration      |        |      | 2002                |  |              |         | 115,000         |  |               |         | 31,961  |  |  |        |       |  |  |           | 63,500    | 
|                             |                                      |        |      | 2001                |  |              |         | 112,125         |  |               |         | 66,882  |  |  |        |       |  |  |           |          | 






---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Amounts include paid and unpaid bonuses
    pertaining to each year and commissions paid during each year.
    With respect to the bonuses paid to Mr. Hunt during fiscal
    2003, see How was the Chief Executive Officer
    compensated? under Report of the Compensation
    Committee below.                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(2) | The Company provides the named executive officers
    with certain group life, health, medical and other non-cash
    benefits generally available to all salaried employees and
    certain auto allowances and other benefits. The amount for
    Mr. Hunt in 2001 includes $14,532 for automobile
    allowances. No other such compensation exceeded 10% of the total
    annual salary and bonus for any named executive officer in any
    year for which a dollar amount is not disclosed.                                                                                                                                                                                                    
|   
|(3) | See Option Grants in Last Fiscal Year
    below with respect to 2003 option grants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(4) | Mr. Hunt served as the Companys Chief
    Executive Officer until January 16, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(5) | Mr. Wenzel became an executive officer of
    the Company in May 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|   
|(6) | Mr. Peterson served as the Companys
    President until June 30, 2003 and as Secretary until
    January 30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|   
|   
|(7) | These options were granted to vest (i) at
    the rate of options for 10,000 shares per quarter during
    the second, third, and fourth quarter of 2003 if Mr. Singer
    and Mr. Maloy satisfied certain management business
    objectives for each such quarter. Options for 26,300 shares
    for Mr. Maloy and 26,800 shares for Mr. Singer
    were earned pursuant to such management business objectives.
    Such options will vest over a period of three years from the
    grant date with one-third vesting on May 30, 2004,
    one-third on May 30, 2005, and the remainder on
    May 30, 2006 if the employee remains employed with the
    Company through each such vesting date.
|   

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##### Table of Contents



OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information with
respect to option grants to the named executive officers during
fiscal 2003 and the potential realizable value of such option
grants:

|                         |  |         |           |            |  |           |       |            |  |                      |                 |     |  |  |          |     |  |   |         |  |  |   |         | 
|------------------------ |  | ------- | --------- | ---------- |  | --------- | ----- | ---------- |  | -------------------- | --------------- | --- |  |  | -------- | --- |  | - | ------- |  |  | - | ------- | 
|                         |  |         |           |            |  |           |       |            |  |                     
|                         |  |         |           |            |  |           |       |            |  | Potential Realizable
|                         |  |         |           |            |  |           |       |            |  | Value at Assumed    
|                         |  |         |           | % of Total |  |           |       |            |  | Annual Rates        
|                         |  |         |           | Options    |  |           |       |            |  | of Stock Price      
|                         |  | Number  |           | Granted to |  |           |       |            |  | Appreciation        
|                         |  | of      |           | Employees  |  | Exercise  |       |            |  | for Option Term(7)  
|                         |  | Options |           | in Fiscal  |  | Price     |       | Expiration |  |                     
|Name                     |  | Granted |           | Year(1)    |  | ($/Share) |       | Date       |  | 5%                   |                 | 10%
|                         |  |         |           |            |  |           |       |            |  |                      |                 |    
|Marshall B. Hunt         |  |         | 1,000,000 |            |  |           | 37.46 | %          |  |                      | 500,000  $0.75 |     |  |  | 2/25/13  | (2) |  | $ | 286,147 |  |  | $ | 725,153 | 
|                         |  |         |           |            |  |           |       |            |  |                      | 500,000  $0.91 |     |  |  | 7/16/05  | (3) |  |   | 235,835 |  |  |   | 597,653 | 
|Robert J. Wenzel         |  |         | 500,000   |            |  |           | 18.73 | %          |  |                      | 500,000  $0.91 |     |  |  | (4)      |     |  |   | 286,147 |  |  |   | 725,153 | 
|William E. Peterson, Jr. |  |         | 425,000   |            |  |           | 15.92 | %          |  |                      | 425,000  $0.75 |     |  |  | 2/25/13  | (2) |  |   | 200,260 |  |  |   | 508,005 | 
|Robert R. Singer         |  |         | 55,000    |            |  |           | 2.1   | %          |  |                      | 30,000  $0.58  |     |  |  | 5/30/13  | (5) |  |   | 9,776   |  |  |   | 24,773  | 
|                         |  |         |           |            |  |           |       |            |  |                      | 25,000  $0.91  |     |  |  | 10/21/13 | (6) |  |   | 14,307  |  |  |   | 36,258  | 
|L. Bruce Maloy           |  |         | 55,000    |            |  |           | 2.1   | %          |  |                      | 30,000  $0.58  |     |  |  | 5/30/13  | (5) |  |   | 9,593   |  |  |   | 24,311  | 
|                         |  |         |           |            |  |           |       |            |  |                      | 25,000  $0.91  |     |  |  | 10/21/13 | (6) |  |   | 14,307  |  |  |   | 36,258  | 



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options to purchase a total of
    2,669,667 shares of common stock were granted to employees
    of the Company in fiscal 2003. Options to purchase an aggregate
    of 925,000 shares granted to Messrs. Hunt and Peterson
    were not granted under the 1998 Incentive Stock Plan, as amended
    (the Plan), and the remaining 1,744,677 options were
    granted under the Plan.                                                                                                                                                                                                                                                                                                                                                            
|   
|(2) | Such options vested based on fiscal year
    2003 net sales and EBITDA levels. Specifically, such
    options were to vest if the 2003 audited financial statements
    for fiscal year 2003 reflect that actual sales and actual EBITDA
    for the 2003 fiscal year are equal to or greater than sales and
    EBITDA for the 2003 fiscal year as described in the Operating
    Plan for the 2003 fiscal year which was approved by the Board of
    Directors on February 25, 2003. These sales and EBITDA
    targets were not achieved during fiscal 2003, and these options
    expired.                                                                                                                                                     
|   
|(3) | These options vest only upon the occurrence of
    the sale of the Company (as such term is defined in the option
    agreement governing these options) on or before July 16,
    2005. If such a sale of the Company has so occurred and the
    options vest, such options will be exercisable until
    October 21, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(4) | These options vest, if at all, upon a sale of the
    Company (as such term is defined in the option agreement
    governing these options) at any time during the period that
    Mr. Wenzel is employed by the Company or, if
    Mr. Wenzels employment with the Company is terminated
    without cause under his employment agreement, during the period
    that expires on the later of April 30, 2007 or eighteen
    (18) months after the last day of the stated term of his
    employment under any employment agreement between
    Mr. Wenzel and the Company, upon the sale of the Company.
    If such a sale of the Company has so occurred and the options
    vest, such options will be exercisable until October 21,
    2013.
|   
|(5) | The terms of these options provided that such
    options would be earned at the rate of 10,000 shares per
    calendar quarter during the second, third, and fourth quarter of
    2003 only if Mr. Singer and Mr. Maloy satisfied
    certain management business objectives for each such quarter.
    Options for 26,300 shares for Mr. Maloy and
    26,800 shares for Mr. Singer were earned pursuant to
    such management business objectives. Such options will vest over
    a period of three years from the grant date with one-third
    vesting on May 30, 2004, one-third on May 30, 2005,
    and the remainder on May 30, 2006 if the employee remains
    employed with the Company through each such vesting date.              
|   
|(6) | Each option will vest over three years from the
    date of grant with one-third on October 21, 2004, one-third
    on October 21, 2005, and the remainder on October 21,
    2006 if the employee remains employed with the Company through
    each such vesting date. Each option that has not vested and
    become exercisable with vest and become exercisable in full upon
    the earlier of (i) a sale of the Company (as such term is
    defined in the option agreement governing these options) or
    (ii) upon the Companys                                                                                                                                                                                                         

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | payment of the $14,763,000 senior subordinated
    convertible notes issued in connection with the Recapitalization
    in March 2002.                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(7) | Potential realizable value assumes that the stock
    price increases from the date of grant until the end of the
    option term (10 years) at the annual rate specified (5% and
    10%). The 5% and 10% assumed annual rates of appreciation are
    mandated by Securities and Exchange Commission rules and do not
    represent the Companys estimate or projection of the
    future price of common stock. The Company does not believe that
    this method accurately illustrates the potential value of a
    stock option.

OPTION EXERCISES AND VALUES FOR FISCAL
2003

The following table sets forth certain
information with respect to option exercises during fiscal 2003
by each of the named executive officers and the status of their
options at December 31, 2003:

|                         |  |               |   |                |  |                       |   |                      |  |             |           |               |  |  |           |  |  |   |           |  |  |   |         | 
|------------------------ |  | ------------- | - | -------------- |  | --------------------- | - | -------------------- |  | ----------- | --------- | ------------- |  |  | --------- |  |  | - | --------- |  |  | - | ------- | 
|                         |  |               |   |                |  |                       |   |                     
|                         |  | Number of     |   |                |  | Number of Unexercised |   | Value of Unexercised
|                         |  | Shares        |   |                |  | Securities Underlying |   | In-the-Money        
|                         |  | Acquired Upon |   |                |  | Options 12/31/03      |   | Options 12/31/03(1) 
|                         |  | Exercise of   |   | Value Realized |  |                       |   |                     
|Name                     |  | Option        |   | Upon Exercise  |  | Exercisable           |   | Unexercisable        |  | Exercisable |           | Unexercisable
|                         |  |               |   |                |  |                       |   |                      |  |             |           |              
|Marshall B. Hunt         |  |               | 0 |                |  |                       | 0 |                      |  |             | 3,122,850 |               |  |  | 1,377,150 |  |  | $ | 3,109,361 |  |  | $ | 888,366 | 
|William E. Peterson, Jr. |  |               | 0 |                |  |                       | 0 |                      |  |             | 1,000,000 |               |  |  | 0         |  |  |   | 1,010,000 |  |  |   |        | 
|Robert J. Wenzel         |  |               | 0 |                |  |                       | 0 |                      |  |             | 220,945   |               |  |  | 879,055   |  |  |   | 127,581   |  |  |   | 526,919 | 
|Robert R. Singer         |  |               | 0 |                |  |                       | 0 |                      |  |             | 68,600    |               |  |  | 51,800    |  |  |   | 49,596    |  |  |   | 37,334  | 
|L. Bruce Maloy           |  |               | 0 |                |  |                       | 0 |                      |  |             | 107,500   |               |  |  | 51,300    |  |  |   | 67,225    |  |  |   | 36,894  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In accordance with SEC rules, values are
    calculated by subtracting the exercise price from the fair
    market value of the underlying common stock. For purposes of
    this table, fair market value is deemed to be $1.46, the rounded
    average of the high and low common stock price reported for
    American Stock Exchange transactions on December 31, 2003.
    At December 31, 2003, the exercise prices of all options
    held by the named executive officers range from $0.44 to $14.50.

DIRECTOR COMPENSATION

Cash Compensation.Each non-employee director of the Company (excluding
Messrs. Blue, Hunt and Priddy) receives a fee of $3,000 for
each meeting of the Board of Directors attended in person and
$1,000 for each meeting of a committee of the Board of Directors
attended (except for committee meetings held on the same day as
Board meetings and except that Mr. Tucker receives no fees
for attending meetings of the Executive Committee). Directors
are reimbursed for travel and other expenses incurred in
connection with attendance at meetings of the Board of Directors
or committees thereof. Directors who attend meetings of the
Board of Directors by teleconference receive an additional $500
for each such meeting so attended. Directors who are also
employees of the Company, as well as Mr. Blue, receive no
additional compensation for service as directors.

Options.On
March 16, 2002, Mr. Tucker received options to acquire
65,000 shares of common stock at an exercise price of
$0.85 per share. Twenty-thousand shares of common stock
underlying these options vested and became exercisable
immediately upon grant. Twenty five-thousand shares of common
stock underlying these options vest and become exercisable at
800 shares for each meeting of the Executive Committee
attended by Mr. Tucker as a member of such committee.
Beginning in 2003, the remaining 20,000 of these options vest in
three equal annual installments at the earlier of the
Companys annual meeting of shareholders or June 1 of
such year, in the event Mr. Tucker has continued as a
director of the Company until such vesting dates.

On September 27, 2002, T. Lee Provow
received options to acquire 40,000 shares of common stock
at an exercise price of $0.985 per share. Twenty-thousand
shares of common stock underlying these options became

13



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##### Table of Contents



exercisable immediately upon grant. All options
have expired as Mr. Provow resigned from the Board of
Directors on March 7, 2003.


On February 25, 2003, Robert J. Simmons
received options to acquire 20,000 shares of common stock
at an exercise price of $0.43 per share, all of which
options vested and are currently exercisable in full.
Mr. Simmons resigned from the Board of Directors on
March 28, 2003.

On April 3, 2003, Mr. Brands received
options to acquire 60,000 shares of common stock at an
exercise price of $0.35 per share. One-third of these
options became exercisable immediately upon grant. An additional
one-third of these options vested in four equal installments on
June 30, 2003, September 30, 2003, December 31,
2003 and March 31, 2004. Beginning in 2004, the remaining
one-third of these options vest in three equal annual
installments at the earlier of the Companys annual meeting
of shareholders or June 1 of each year, in the event
Mr. Brands has continued as a director of the Company until
such vesting dates.

On October 31, 2003, Dr. Ku received
options to acquire 40,000 shares of the Companys
common stock at an exercise price of $1.82 per share.
One-half of these options became exercisable immediately upon
grant. Beginning in 2004, the remaining one-half of these
options vest in three equal annual installments at the earlier
of the Companys annual meeting of shareholders or
June 1 of each year, in the event Dr. Ku has continued
as a director of the Company until such vesting dates.

On February 25, 2003, Mr. Hunt was
granted options to purchase 500,000 shares of the
Companys common stock at an exercise price of
$0.75 per share. The terms of such options provided that
such options vest based on fiscal year 2003 net sales and EBITDA
levels. Specifically, such options were to vest if the 2003
audited financial statements for fiscal year 2003 reflected that
actual sales and actual EBITDA for the 2003 fiscal year are
equal to or greater than sales and EBITDA for the 2003 fiscal
year as described in the Operating Plan for the 2003 fiscal year
which was approved by the Board of Directors on
February 25, 2003. These sales and EBITDA targets were not
achieved during fiscal 2003, and these options expired.

On October 21, 2003, Mr. Hunt was
granted options to purchase 500,000 shares of the
Companys common stock at an exercise price of
$0.91 per share. These options vest only upon the
occurrence of the sale of the Company (as such term is defined)
on or before July 16, 2005. If such a sale of the Company
has so occurred and the options vest, such options will be
exercisable until October 21, 2013.

On October 21, 2003, Mr. Wenzel was
granted options to purchase 500,000 shares of the
Companys common stock at an exercise price of
$0.91 per share. These options vest, if at all, upon a sale
of the Company (as defined) at any time during the period that
Mr. Wenzel is employed by the Company or, if
Mr. Wenzels employment with the Company is terminated
without cause under his employment agreement, during the period
that expires on the later of April 30, 2007 or eighteen
(18) months after the last day of the stated term of his
employment under any employment agreement between
Mr. Wenzel and the Company, upon the sale of the Company.
If such a sale of the Company has so occurred and the options
vest, such options will be exercisable until October 21,
2013.

On February 25, 2003, Mr. Peterson, a
director of the Company through October 2003, was granted
options to purchase 425,000 shares of the Companys
common stock at an exercise price of $0.75 per share. The
terms of such options provided that such options vest based on
fiscal year 2003 net sales and EBITDA levels. Specifically, such
options were to vest if the 2003 audited financial statements
for fiscal year 2003 reflected that actual sales and actual
EBITDA for the 2003 fiscal year are equal to or greater than
sales and EBITDA for the 2003 fiscal year as described in the
Operating Plan for the 2003 fiscal year which was approved by
the Board of Directors on February 25, 2003. These sales
and EBITDA targets were not achieved during fiscal 2003, and
these options expired.

On October 21, 2003, A. Gordon Tunstall
received options to acquire 20,000 shares of common stock
at an exercise price of $0.91 per share, all of which
options vested and are currently exercisable in full.
Mr. Tunstall resigned from the Board of Directors on
October 31, 2003.

14



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##### Table of Contents



On October 21, 2003, H. Ross
Arnold, III received options to acquire 20,000 shares
of common stock at an exercise price of $0.91 per share,
all of which options vested and are currently exercisable in
full. Mr. Arnold resigned from the Board of Directors on
October 31, 2003.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION

Prior to October 31, 2003, the Executive
Committee handled certain compensation matters with respect to
senior executive officers of the Company. During such time, the
Executive Committee consisted of three members of the Board of
Directors, who, pursuant to a securityholders agreement entered
into in connection with the Companys March 2002
recapitalization (which was superceded by the Securityholders
Agreement) were: (i) a director designated by ComVest who
served as Chairman of the Executive Committee, (ii) the
independent director designated by ComVest; and
(iii) Marshall B. Hunt. Mr. Hunt, the
Companys Chief Executive Officer during 2003, did not
participate in deliberations concerning his compensation.

Pursuant to the Securityholders Agreement, this
executive committee structure terminated effective
October 31, 2003, and on February 24, 2004, the Board
of Directors constituted a new Executive Committee. Currently,
the Executive Committee is comprised of Mr. Tucker,
Mr. Wenzel and Mr. Blue. The Executive Committee, to
the fullest extent permitted by law and the Amended and Restated
Bylaws of the Company, has and may exercise, when the Board of
Directors is not in session, all powers of the Board in the
management of the business and affairs of the Company. The
Executive Committee shall retain its power so long as
Mr. Tucker, Mr. Wenzel and Mr. Blue comprise the
membership of the Executive Committee. The affirmative vote of
all of the members of the Executive Committee is required in
order to take action.

15



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##### Table of Contents



REPORT OF THE COMPENSATION COMMITTEE

ON EXECUTIVE COMPENSATION


The Compensation Committee of the Board of
Directors has furnished the following report on executive
compensation for fiscal 2003. Until March 16, 2002, the
Compensation Committee was responsible for reviewing and
approving the compensation arrangements for the Companys
executive officers and for administering the Companys 1998
Stock Incentive Plan (the Plan), at which point the
Executive Committee assumed responsibility for administration of
the Plan. Through the time at which the Executive Committee was
terminated in October 2003, the Compensation Committee still
participated in a review of compensation matters affecting the
Company. The Compensation Committee was reconstituted in August
2003, at which time the Compensation Committee consisted of
H. Ross Arnold, III, a former director of the Company, and
Mr. Brands. In October 2003, the Compensation Committee was
again reconstituted to consist of Mr. Blue, Mr. Brands
and Dr. Ku. In accordance with the listing standards of
AMEX, the Compensation Committee is currently solely responsible
for determining the compensation of the Companys executive
officers. On or before the Companys 2004 Annual Meeting of
Shareholders, all members of the Compensation Committee will be
independent, as defined in the rules and regulations of AMEX.

What is our philosophy on executive officer
compensation?

Our compensation program for executives consists
of the following key elements:



| |   |                                                       
| | - | ------------------------------------------------------
| |  | a base salary;                                        
|
| |  | a performance-based annual or quarterly
    bonus; and
|
| |  | periodic grants of stock options.                     

The Compensation Committee believes that this
compensation approach best serves the interests of the Company
and its shareholders. It enables the Company to meet the
requirements of the highly competitive environment in which the
Company operates, while ensuring that executive officers are
compensated in a way that advances both the short- and long-term
interests of the Companys shareholders.

Base Salary.Base
salaries for certain of the Companys executive officers,
as well as changes in such salaries, are set forth in the
employment agreements entered into with the Company are
established by the Chief Executive Officer and approved by the
Compensation Committee when established or increased. Base
salaries for the Chief Executive Officer and President are
determined by and reviewed periodically by the Compensation
Committee. The Compensation Committee can revise upward the
compensation structure for executive officers as it determines
is necessary. The factors the Compensation Committee considers
in evaluating the adequacy of compensation for the
Companys executive officers include competitive industry
salaries, a subjective assessment of the nature of the position,
the contribution and experience of the officer, and the length
of the officers service.

Annual or Quarterly
Bonus.The variable annual or
quarterly bonus permits individual performance to be recognized
on an annual or quarterly basis, and is based, in significant
part, on an evaluation of the contribution made by the officer
to Company performance (compensation and bonus arrangements
applicable to the Companys Chief Executive Officer and
President, respectively, are described below.) Typically, our
executive bonuses are based specifically on the achievement of
either Net Sales and EBITDA levels and/or management business
objectives established by our Board of Directors or by the Chief
Executive Officer or the Chief Operating Officer.

Stock Options.Stock
options relate a significant portion of long-term remuneration
directly to stock price appreciation realized by all of the
Companys shareholders. Under the stock option guidelines
adopted by the Compensation Committee, stock option grants may
be made to executive officers upon initial employment, upon
promotion to a new, higher level position that entails increased
responsibility and accountability, in connection with the
execution of a new employment agreement, and/or when all
previously granted stock options have either fully vested or are
within twelve months of full vesting. Using these guidelines,
the Chief Executive Officer or the Chief Operating Officer
recommend the number of options to be granted, within a

16



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##### Table of Contents



range associated with the individuals
salary level, and present their recommendations to the
Compensation Committee for review and approval. The Chief
Executive Officer and/or the Chief Operating Officer may make
recommendations that deviate from the guidelines where they deem
it appropriate.


While options typically vest over a minimum
two-year or three-year period, options granted to certain
executive officers may have longer or shorter vesting periods.
Options have been granted under the Plan to the Chief Executive
Officer and to the Chief Operating Officer.

How was the Chief Executive Officer
compensated?

Marshall B. Hunt served as the
Companys Chief Executive Officer during 2003, continuing
in such role until January 2004. Currently, Robert J.
Wenzel serves as our Chief Operating Officer, President, and
Interim Chief Executive Officer. This section outlines how
Mr. Hunt was compensated during fiscal 2003.

As the former Chief Executive Officer,
Marshall B. Hunt was compensated pursuant to the terms of
an employment agreement which was entered into on March 16,
2002. The agreement, as amended, provided for an annual base
salary of $283,500. Mr. Hunt was entitled to an annual
bonus for 2003 based upon the Companys achievement during
2003 of certain levels of net sales and EBITDA when compared
with the Companys net sales and EBITDA in its operating
plan for 2003 approved by its Board of Directors. By amendment
to Mr. Hunts employment agreement in October 2003,
Mr. Hunts base salary was increased to $315,000. See
Employment Agreements elsewhere in this Amendment
for a summary of these terms.

How is the Company addressing Internal Revenue
Code limits on deductibility of compensation?

Section 162(m) of the Internal Revenue Code
generally disallows a tax deduction to public corporations for
compensation over $1,000,000 paid for any fiscal year to the
corporations chief executive officer and four other most
highly compensated executive officers as of the end of any
fiscal year. No executive officer received more than $1,000,000
in compensation in fiscal year 2003 that will be subject to the
Section 162(m) limitation on deductibility.



| |                       
| | ----------------------
| | COMPENSATION COMMITTEE
|
| | James E. Brands       
| | Dr. David A. Ku       
| | Harold Blue           

The foregoing report of the Compensation
Committee shall not be deemed incorporated by reference by any
general statement or reference to this Amendment into any filing
under the Securities Act of 1933, as amended, or under the
Security Exchange Act of 1934, as amended, except to the extent
that the Company specifically incorporates this information by
reference and shall not otherwise be deemed filed under such
acts.

17



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##### Table of Contents



PERFORMANCE GRAPH

Set forth below is a line graph comparing the
percentage change in the cumulative total shareholder return on
the Companys common stock against the cumulative total
return of the Russell 2000 Growth Index and the Companys
peer group index. The Companys peer group consists of
Arrow International, Inc., C.R. Bard, Inc., Conmed
Corp., and ICU Medical, Inc. The stock performance graph
assumes $100 was invested on January 1, 1999 and measures
the return thereon at various points based on the closing price
of the common stock on the dates indicated, assuming
reinvestment of dividends.

(PERFORMANCE GRAPH)

|             |  |        |        |          |  |          |        |          |  |          |        |          |  |   |        |  |  |   |        |  |  |   |        | 
|------------ |  | ------ | ------ | -------- |  | -------- | ------ | -------- |  | -------- | ------ | -------- |  | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|            
|            
|             |  | 1/1/99 |        | 12/31/99 |  | 12/29/00 |        | 12/29/01 |  | 12/31/02 |        | 12/31/03
|            
|            
|Horizon      |  | $      | 100.00 |          |  | $        | 58.82  |          |  | $        | 8.94   |          |  | $ | 10.12  |  |  | $ | 16.24  |  |  | $ | 33.18  | 
|Russell 2000 |  |        | 100.00 |          |  |          | 119.82 |          |  |          | 114.78 |          |  |   | 115.96 |  |  |   | 90.94  |  |  |   | 132.20 | 
|Peer Group   |  |        | 100.00 |          |  |          | 104.66 |          |  |          | 102.56 |          |  |   | 135.61 |  |  |   | 126.00 |  |  |   | 153.47 | 



The Stock Performance Graph shall not be deemed
incorporated by reference by any general statement incorporating
by reference this Amendment into any filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to
the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed
filed under such Acts.

18



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##### Table of Contents








|         |                                                                                                       
|-------- | ------------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder
    Matters

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes information as of
December 31, 2003 relating to equity compensation plans of
the Company pursuant to which grants of options, restricted
stock, or other rights to acquire shares may be granted from
time to time.

|                                                              |  |                            |           |                               |  |                                      |      |  |  |  |           | 
|------------------------------------------------------------- |  | -------------------------- | --------- | ----------------------------- |  | ------------------------------------ | ---- |  |  |  | --------- | 
|                                                              |  | Number of securities to    |           |                               |  | Number of securities remaining      
|                                                              |  | be issued upon exercise of |           | Weighted-average exercise     |  | available for future issuance under 
|                                                              |  | outstanding options,       |           | price of outstanding options, |  | equity compensation plans (excluding
|Plan Category                                                 |  | warrants and rights        |           | warrants and rights           |  | securities reflected in column (a)  
|                                                              |  |                            |           |                               |  |                                     
|                                                              |  | (a)                        |           | (b)                           |  | (c)                                 
|Equity compensation plans approved by
    shareholders(1)     |  |                            | 4,529,217 |                               |  | $                                    | 1.01 |  |  |  | 1,470,783 | 
|Equity compensation plans not approved by
    shareholders(2) |  |                            | 4,000,000 |                               |  | $                                    | 0.45 |  |  |  | N/A       | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Consists of grants under the Companys 1998
    Stock Incentive Plan, as amended.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(2) | Consists of (i) a grant of options to
    purchase 3,000,000 shares of the Companys common
    stock to Mr. Hunt and (ii) a grant of options to
    purchase 1,000,000 shares of the Companys common
    stock to Mr. Peterson, each such grant having been made in
    connection with the Recapitalization. Options for
    500,000 shares were granted to Mr. Hunt and options
    for 425,000 shares were granted to Mr. Peterson in
    February 2003, exercisable upon the Companys achievement
    of financial goals in 2003. These goals were not obtained and
    these options expired.

19



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##### Table of Contents



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

Based upon a review of filings with the
Securities and Exchange Commission, we believe that each of the
following individuals or entities is the beneficial owner of
more than 5% of our common stock. The following table shows the
amount of our common stock beneficially owned (unless otherwise
indicated) as of March 31, 2004 by (i) our directors
and nominees for director, (ii) our named executive
officers (as defined herein), (iii) our directors and
executive officers as a group and (iv) each person known by
us to beneficially own more than 5% of our common stock. The
percentages set forth below are based on 43,943,653 shares
of the Companys common stock outstanding as of
March 31, 2004.

|                                                                                    |                                                                           |                  |            |                   |  |  |      |   | 
|----------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | ---------------- | ---------- | ----------------- |  |  | ---- | - | 
|                                                                                    |                                                                           | Number of Shares |            |                  
|                                                                                    |                                                                           | Beneficially     |            | Percent of Shares
|Name(1)                                                                             |                                                                           | Owned(2)         |            | Outstanding      
|                                                                                    |                                                                           |                  |            |                  
|Directors and Executive Officers:                                                   |                                                                           |                  |            |                   |  |  |      |  
|Robert J. Wenzel(3)                                                                 |                                                                           |                  | 220,945    |                   |  |  | *    |  
|Robert R. Singer(4)                                                                 |                                                                           |                  | 107,533    |                   |  |  | *    |  
|L. Bruce Maloy(5)                                                                   |                                                                           |                  | 146,267    |                   |  |  | *    |  
|Elaine Swygert(6)                                                                   |                                                                           |                  | 65,200     |                   |  |  | *    |  
|Harold Blue                                                                         |                                                                           |                  | 258,000    |                   |  |  | *    |  
|James E. Brands(7)                                                                  |                                                                           |                  | 60,000     |                   |  |  | *    |  
|Marshall B. Hunt(8)                                                                 |                                                                           |                  | 7,331,198  |                   |  |  | 15.8 | %
|David R. Ku(9)                                                                      |                                                                           |                  | 20,000     |                   |  |  | *    |  
|Robert Priddy(10)                                                                   |                                                                           |                  | 2,529,334  |                   |  |  | 5.8  | %
|                                                                                    | RMC Capital, LLC
    1640 Powers Ferry Rd Suite 125
    Marietta, Georgia |                  |            |                   |  |  |      |   | 
|Robert D. Tucker(11)                                                                |                                                                           |                  | 49,067     |                   |  |  | *    |  
|All current directors and executive officers as a
    group (10 persons)            |                                                                           |                  | 10,787,544 |                   |  |  | 22.2 | %
|Shareholders Beneficially Owning Greater than
    5% of the Companys Common Stock: |                                                                           |                  |            |                   |  |  |      |  
|ComVest Venture Partners, L.P.(12)                                                  |                                                                           |                  | 9,975,000  |                   |  |  | 23.0 | %
|                                                                                    | Attn: Carl Kleidman
    830 Third Avenue
    New York, New York 10022     |                  |            |                   |  |  |      |   | 
|Commonwealth Associates Group Holdings, LLC(13)                                     |                                                                           |                  | 11,132,396 |                   |  |  | 25.6 | %
|                                                                                    | Attn: Carl Kleidman
    830 Third Avenue
    New York, New York 10022     |                  |            |                   |  |  |      |   | 
|ComVest Management, LLC(14)                                                         |                                                                           |                  | 9,975,000  |                   |  |  | 23.0 | %
|                                                                                    | Attn: Carl Kleidman                                                       |                  |            |                   |  |  |      |   | 
|                                                                                    | 830 Third Avenue                                                          |                  |            |                   |  |  |      |   | 
|                                                                                    | New York, New York 10022                                                  |                  |            |                   |  |  |      |   | 
|Medtronic, Inc.                                                                     |                                                                           |                  | 7,200,000  |                   |  |  | 16.6 | %
|                                                                                    | 710 Medtronic Parkway
    Minneapolis, Minnesota 55932                    |                  |            |                   |  |  |      |   | 
|Michael S. Falk(15)                                                                 |                                                                           |                  | 11,132,396 |                   |  |  | 25.6 | %
|                                                                                    | c/o Commonwealth Associates Group Holdings,
    LLC                       |                  |            |                   |  |  |      |   | 
|                                                                                    | 830 Third Avenue                                                          |                  |            |                   |  |  |      |   | 
|                                                                                    | New York, New York 10022                                                  |                  |            |                   |  |  |      |   | 

20



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##### Table of Contents



|                             |                                                                                     |                  |           |                   |  |  |     |   | 
|---------------------------- | ----------------------------------------------------------------------------------- | ---------------- | --------- | ----------------- |  |  | --- | - | 
|                             |                                                                                     | Number of Shares |           |                  
|                             |                                                                                     | Beneficially     |           | Percent of Shares
|Name(1)                      |                                                                                     | Owned(2)         |           | Outstanding      
|                             |                                                                                     |                  |           |                  
|William E. Peterson, Jr.(16) |                                                                                     |                  | 3,427,890 |                   |  |  | 7.6 | %
|                             | c/o Morgan Stanley
    950 E. Paces Ferry Road
    Suite 2700
    Atlanta, GA 30326 |                  |           |                   |  |  |     |   | 



---



| |   |                                                                      
| | - | ---------------------------------------------------------------------
| | * | Represents less than 1% of the Companys
    outstanding common stock



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Except as otherwise indicated, the address of
    each of the executive officers and directors is the address of
    the Company, which is One Horizon Way, P.O. Drawer 627,
    Manchester, Georgia 31816.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | (2) | Under the rules of the Securities and Exchange
    Commission, a person is deemed to be a beneficial
    owner of a security if that person has or shares
    voting power, which includes the power to vote or to
    direct the voting of such security, or investment
    power, which includes the power to dispose of or to direct
    the disposition of such security. A person also is deemed to be
    a beneficial owner of any securities which that person has the
    right to acquire within sixty (60) days. Under these rules,
    more than one person may be deemed to be a beneficial owner of
    the same securities and a person may be deemed to be a
    beneficial owner of securities as to which he or she has no
    economic or pecuniary interest. Except as set forth in the
    footnotes below, the persons named below have sole voting and
    investment power with respect to all shares of common stock
    shown as being beneficially owned by them.
|
| | (3) | Represents shares of common stock that may be
    acquired upon the exercise of stock options exercisable within
    60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
|
| | (4) | Includes 77,533 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
|
|
| | (5) | Includes 116,267 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
|
| | (6) | Represents shares of common stock that may be
    acquired upon the exercise of stock options exercisable within
    60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| | (7) | Includes 40,000 shares of common stock that
    may be acquired upon the exercise of stock options exercisable
    within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (8) | Includes 1,149,210 shares of common stock
    owned by Hunt Family Investments, L.L.L.P., a Georgia limited
    liability limited partnership of which Mr. Hunt is the
    managing general partner, and 4,000,000 shares of common
    stock that may be acquired upon the exercise of stock options
    exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | (9) | Represents shares of common stock that may be
    acquired upon the exercise of stock options exercisable within
    60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | In addition to the 1,200,000 shares
    beneficially owned by RMC Capital, LLC (RMC), which
    Mr. Priddy, a director of the Company, beneficially owns as
    a manager of RMC, Mr. Priddy may be deemed to beneficially
    own an additional 1,329,334 shares of the Companys
    common stock, over which Mr. Priddy maintains sole voting
    and dispositive power.                                                                                                                                                                                      
|    
|(11) | Represents shares of common stock that may be
    acquired upon the exercise of stock options exercisable within
    60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|    
|(12) | ComVest Management, LLC (ComVest
    Management) is the general partner of ComVest Venture
    Partners, L.P. (ComVest), and ComVest Management is
    wholly-owned by Commonwealth Associates Group Holdings, LLC
    (CAGH). ComVest may be deemed to be the beneficial
    owner of an aggregate of 9,975,000 shares of the
    Companys common stock. ComVest, ComVest Management and
    Mr. Falk may be deemed to share such voting and disposition
    powers with respect to such 9,975,000 shares of Common
    Stock beneficially held by ComVest.
|    

21



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##### Table of Contents





|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(13) | CAGH, as the ultimate parent entity, may be
    deemed to beneficially own 10,174,174 shares of the
    Companys common stock. This number includes
    199,174 shares of the Companys common stock
    beneficially held by Commonwealth and 9,975,000 shares
    beneficially owned by ComVest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(14) | ComVest Management, as the general partner of
    ComVest, may be deemed to beneficially own 9,975,000 shares
    of the Companys common stock beneficially held by ComVest.
    ComVest Management and Mr. Falk may be deemed to share
    voting and disposition powers with respect to these shares of
    common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    
|(15) | Mr. Falk is the Chairman of CAGH. Only
    Mr. Falk has the authority to vote or dispose of the
    shares. Mr. Falk may be deemed to be the beneficial owner
    of an aggregate of 11,132,396 shares of Common Stock, as
    follows: Mr. Falk may be deemed to beneficially own the
    9,975,000 shares of Common Stock beneficially owned by
    ComVest (ComVest, ComVest Management and Mr. Falk may be
    deemed to share such voting and disposition powers with respect
    to such 9,975,000 shares of the Companys common
    stock), 6,488 shares of Common Stock beneficially owned by
    Commonwealth and 287,684 shares of Common Stock
    beneficially owned by CAGH. Mr. Falk may be deemed to share
    voting and disposition powers with respect to
    199,174 shares of the Companys common stock
    beneficially held by Commonwealth. In his capacity as Chairman
    and controlling equity owner of CAGH, Mr. Falk may be
    deemed to share indirect voting and dispositive power with
    respect to such entities shares and may therefore be
    deemed to be the beneficial owner of such securities. Finally,
    Mr. Falk has the sole power to dispose of an aggregate of
    958,222 shares of the Companys common stock.
|    
|(16) | Includes 1,000,000 shares of common stock
    that may be acquired upon the exercise of stock options
    exercisable within 60 days.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 






|         |                                                   
|-------- | --------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions

Harold Blue, who was appointed to the
Companys Board of Directors in March 2003, serves as the
President of Commonwealth Associates Group Holdings, LLC
(CAGH). ComVest Venture Partners, L.P. is an
affiliated entity of CAGH. In connection with the
Recapitalization, in March 2002, the Company issued Convertible
Notes to ComVest in the principal amount equal to $4,400,000.
During fiscal 2003, the Company paid an aggregate of $348,127 in
interest to ComVest on the Convertible Notes issued to ComVest.

In April 2003, the Company entered into the
Exclusive Distributor Agreement with Medtronic, Inc., the
beneficial owner of 16.6% of the Companys common stock
(the Distributor Agreement). Under the Distributor
Agreement, the Company became the exclusive distributor
commencing June 1, 2003 in the United States for
Medtronics IsoMed constant flow infusion system for the
delivery of chemotherapy agents for use in hepatic arterial
infusion therapy for patients with colorectal and/or liver
cancer. During 2003, the Company paid an aggregate of $320,575
to Medtronic in connection with the Distributor Agreement.

During 2003, Tunstall Consulting, Inc., an
affiliate of Gordon Tunstall, a director of the Company from
January 2003 through October 2003, provided consulting services
to the Company with respect to financial and certain related
matters, including the Recapitalization. In 2003, the Company
incurred, and paid in its entirety, fees of $66,000 to Tunstall
Consulting for consulting services rendered to the Company.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant Fees and
    Services

On November 12, 2002, the Company notified
the firm of PricewaterhouseCoopers LLP that, by decision of the
Audit Committee of the Board of Directors, it would be dismissed
effective November 14, 2002. Effective November 15,
2002, the Company appointed Grant Thornton LLP as its
independent public accountants to replace the firm of
PricewaterhouseCoopers LLP. The decision to dismiss
PricewaterhouseCoopers LLP and to retain Grant Thornton LLP as
the Companys independent public accountants was made by
the Audit Committee of the Board of Directors of the Company,
and then concurred in and approved by the Executive Committee of
the Board of Directors.

22



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##### Table of Contents



The reports of PricewaterhouseCoopers LLP on the
Companys financial statements for the fiscal years ended
December 31, 2000 and 2001 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting
principles, except that the report of PricewaterhouseCoopers LLP
dated February 26, 2002 (except for Notes 6, 9, 12 and
17, as to which the date was April 15, 2002) accompanying
the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2001, contained the
following paragraph:

The accompanying consolidated financial
statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note 17 to the
consolidated financial statements, the Companys senior
loan agreement requires compliance with certain financial
covenants the compliance with which cannot be objectively
determined. This matter raises substantial doubt about the
Companys ability to continue as a going concern. The
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

In PricewaterhouseCoopers LLPs report dated
February 26, 2002 (except for Notes 6, 9, 12 and 17,
as to which the date was April 15, 2002, and Note 18,
as to which the date was September 9, 2002) accompanying
the Companys Registration Statement on Form S-1/ A,
as filed with the Securities and Exchange Commission on
September 11, 2002, the paragraph referred to above was
removed.

During the Companys fiscal years ended
December 31, 2001 and 2000, and the subsequent interim
period through November 14, 2002, there were no
disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP,
would have caused PricewaterhouseCoopers LLP to make reference
to the matter in their report.

During the Companys fiscal years ended
December 31, 2001 and 2000, and the subsequent interim
period through November 14, 2002, there were no
reportable events (as such term is defined in
Item 304(a)(i)(v) of Regulation S-K). The Company
requested, and received from, PricewaterhouseCoopers LLP a
letter, dated November 14, 2002, addressed to the
Commission stating that it agreed with the above statements.

During the Companys fiscal years ended
December 31, 2001 and 2000, and the subsequent interim
period through November 14, 2002, the Company did not
consult Grant Thornton LLP with respect to the application of
accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might
be rendered on the Companys consolidated financial
statements, or any other matters or reportable events as set
forth in Items 304(a)(2)(i) and (ii) of
Regulation S-K.

The Company has retained Grant Thornton LLP as
independent public accountants since November 15, 2002 for
fiscal years 2003 and 2002. From January 1, 2002 until
November 14, 2002, the Company retained
PricewaterhouseCoopers LLP as its independent public accountants.

Aggregate fees billed to us for fiscal years 2003
and 2002 by Grant Thornton LLP were:

|                      |  |             |         |      |  |   |         | 
|--------------------- |  | ----------- | ------- | ---- |  | - | ------- | 
|                      |  |            
|                      |  | Fiscal Year
|                      |  |            
|                      |  | 2003        |         | 2002
|                      |  |             |         |     
|Audit Fees            |  | $           | 110,755 |      |  | $ | 115,958 | 
|Audit Related Fees(a) |  |             | 67,336  |      |  |   | 0       | 
|Tax Services(b)       |  |             | 21,725  |      |  |   | 40,275  | 
|All Other Fees        |  |             | 0       |      |  |   | 0       | 



---



|    |  |                                                                                                                                                                                                                                        
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | For fiscal year 2003, includes fees for 401(k)
    plan review, quarterly review of the Companys interim
    financial statements and work performed in connection with
    testing the impairment of certain of the Companys assets.
|   
|(b) |  | Includes fees for tax return preparation and
    corporate tax planning.                                                                                                                                                               

23



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##### Table of Contents



Aggregate fees billed to us for fiscal years 2003
and 2002 by PricewaterhouseCoopers LLP were:

|                      |  |             |        |      |  |   |         | 
|--------------------- |  | ----------- | ------ | ---- |  | - | ------- | 
|                      |  |            
|                      |  | Fiscal Year
|                      |  |            
|                      |  | 2003        |        | 2002
|                      |  |             |        |     
|Audit Fees            |  | $           | 0      |      |  | $ | 182,305 | 
|Audit Related Fees(a) |  |             | 25,891 |      |  |   | 67,547  | 
|Tax Services          |  |             | 0      |      |  |   | 0       | 
|All Other Fees        |  |             | 0      |      |  |   | 0       | 



---



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | For fiscal year 2003, includes fees related to
    the provision of required accountants consents in
    connection with the Companys Annual Report on
    Form 10-K for the 2002 and 2003 fiscal years, and For
    fiscal year 2002, includes fees related to the Companys
    Registration Statement on Form S-1 prepared in connection
    with the Recapitalization, 401(k) plan review and successor
    auditor review.

All audit related services, tax services and
other services provided to the Company during the 2002 and 2003
fiscal years were pre-approved by the Audit Committee. The Audit
Committee charter specifically authorizes the Audit Committee to
delegate to one or more of its members pre-approval authority
with respect to permitted services. In addition, the Audit
Committee considered whether the provision of non-audit services
by each of PricewaterhouseCoopers LLP and Grant Thornton LLP is
compatible with maintaining auditor independence.

The Company believes that the fees reflected
above payable to Grant Thornton LLP for the 2003 fiscal year are
representative of future fees likely to be billed to the Company.

24



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##### Table of Contents



EXHIBIT INDEX

|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Exhibits
|        |    |                        
|        | 3  | .1                      |  | Amended and Restated Articles of Incorporation of
    the Company, as amended to date, filed as Exhibit 3.1 to
    the Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2002 and incorporated herein by
    reference.                                                                                                                   
|        | 3  | .2                      |  | Amended and Restated Bylaws of the Company, as
    amended to date, filed as Exhibit 3.2 to the
    Registrants Quarterly Report on Form 10-Q for the
    quarter ended September 30, 2002 and incorporated herein by
    reference.                                                                                                                                      
|        | 4  | .1                      |  | See Articles II, III, VII and IX of the
    Amended and Restated Articles of Incorporation filed as
    Exhibit 3.1 and Articles I, VII, VIII and IX of the
    Amended and Restated Bylaws filed as Exhibit 3.2, filed as
    Exhibit 4.1 to the Registrants Form S-1 dated
    April 14, 1998 (SEC File No. 333-46349) and
    incorporated herein by reference.        
|        | 4  | .2                      |  | Specimen Common Stock Certificate, filed as
    Exhibit 4.2 to the Registrants Form S-1 dated
    April 14, 1998 (SEC File No. 333-46349) and
    incorporated herein by reference.                                                                                                                                                                                       
|        | 4  | .3                      |  | Rights Agreement dated April 9, 1998 by and
    between the Company and Tapir Investments (Bahamas) Ltd., filed
    as Exhibit 4.3 to the Registrants Form 10-K dated
    March 31, 1999 (SEC File No. 000-24025) and
    incorporated herein by reference.                                                                                                               
|        | 10 | .1                      |  | Promissory Note dated September 28, 1995
    made by Roy C. Mallady, Jr. to the order of the
    Company in the principal amount of $77,612.43, as amended by
    Amendment to Promissory Note dated September 28, 1996,
    filed as Exhibit 10.3 to the Registrants
    Form S-1 dated April 14, 1998 (SEC File
    No. 333-46349) and incorporated herein by reference.
|        | 10 | .2                      |  | Promissory note dated October 12, 1995 made
    by Roy C. Mallady, Jr. to the order of the Company in
    the principal amount of $35,000.00, as amended by Amendment to
    Promissory Note dated October 12, 1996, filed as
    Exhibit 10.6 to the Registrants Form S-1 dated
    April 14, 1998 (SEC File No. 333-46349) and
    incorporated herein by reference.    
|        | 10 | .3                      |  | Lease Agreement dated as of July 1, 1996
    between The Development Authority of the City of Manchester and
    the Company, filed as Exhibit 10.9 to the Registrants
    Form S-1 dated April 14, 1998 (SEC File
    No. 333-46349) and incorporated herein by reference.                                                                                               
|        | 10 | .4                      |  | Amendment to Lease Agreement dated
    November 2, 1999 between The Development Authority of the
    City of Manchester and the Company, filed as Exhibit 10.10
    to the Registrants Form 10-K dated March 29, 2000
    (SEC File No. 000-24025) and incorporated herein by
    reference.                                                                              
|        | 10 | .5                      |  | Lease Agreement dated as of August 29, 1997
    between The Development Authority of the City of Manchester and
    the Company, filed as Exhibit 10.10 to the
    Registrants Form S-1 dated April 14, 1998 (SEC
    File No. 333-46349) and incorporated herein by reference.                                                                                           
|        | 10 | .6                      |  | 1998 Stock Incentive Plan, filed as
    Exhibit 10.11 to the Registrants Form S-1 dated
    April 14, 1998 (SEC File No. 333-46349) and
    incorporated herein by reference.                                                                                                                                                                                             
|        | 10 | .7                      |  | Equity Agreement, dated as of February 17,
    1993, by and between CarboMedics, Inc. and the Company, as
    amended, filed as Exhibit 10.23 to the Registrants
    Form S-1 dated April 14, 1998 (SEC File
    No. 333-46349) and incorporated herein by reference.                                                                                                     
|        | 10 | .8                      |  | Second Amended License Agreement dated
    January 1, 1995 between Dr. Sakharam D. Mahurkar
    and NeoStar Medical® Technologies, filed as
    Exhibit 10.26 to the Registrants Form S-1 dated
    April 14, 1998 (SEC File No. 333-46349) and
    incorporated herein by reference.                                                                                     
|        | 10 | .9                      |  | License Agreement dated July 1995 between
    Dr. Sakharam D. Mahurkar and Strato®/Infusaid TM
    Inc., filed as Exhibit 10.27 to the Registrants
    Form S-1 dated April 14, 1998 (SEC File
    No. 333-46349) and incorporated herein by reference.                                                                                                                   
|        | 10 | .10                     |  | Additional License Agreement dated
    January 1, 1997 between Dr. Sakharam D. Mahurkar
    and the Company, filed as Exhibit 10.28 to the
    Registrants Form S-1 dated April 14, 1998 (SEC
    File No. 333-46349) and incorporated herein by reference.                                                                                                               
|        | 10 | .11                     |  | Form of Severance and Bonus Agreement between the
    Company and L. Bruce Maloy, filed as Exhibit 10.3 to
    the Registrants Form 10-Q dated November 15, 1999
    (SEC File No. 000-24025) and incorporated herein by
    reference.                                                                                                                                   

25



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##### Table of Contents



|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------- | -- | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Exhibits
|        |    |                        
|        | 10 | .12                     |  | Note Purchase Agreement among the Company,
    ComVest Venture Partners, L.P. and certain Additional Note
    Purchasers dated March 1, 2002, filed as Exhibit 10.1
    to the Registrants 8-K/A, filed on July 3, 2002 (SEC
    File Number 001-15459) and incorporated herein by reference.                                                                                                                                                                                                                                                        
|        | 10 | .13                     |  | Voting Agreement among the Company, ComVest
    Venture Partners, L.P., Marshall B. Hunt, William E.
    Peterson, Jr. and Hunt Family Investments L.L.L.P., dated
    March 1, 2002, filed as Exhibit 10.55 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.                                                                                                                                                  
|        | 10 | .14                     |  | Securityholders Agreement among the Company,
    ComVest Venture Partners, L.P., Medtronic, Inc., and
    certain shareholders, dated March 16, 2002, filed as
    Exhibit 10.56 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                                                              
|        | 10 | .15                     |  | Senior Subordinated Convertible Note payable by
    the Company to ComVest Venture Partners, L.P., dated
    March 16, 2002, filed as Exhibit 10.57 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.                                                                                                                                                                                                           
|        | 10 | .16                     |  | Senior Subordinated Convertible Note payable by
    the Company to Medtronic, Inc., dated March 16, 2002,
    filed as Exhibit 10.58 to the Registrants Annual
    Report on Form 10-K for the year ended December 31, 2001,
    dated April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                                                                                                          
|        | 10 | .17                     |  | Form of Senior Subordinated Convertible Note
    payable by the Company to certain additional parties, dated
    March 16, 2002, filed as Exhibit 10.59 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.                                                                                                                                                                                                       
|        | 10 | .18                     |  | Junior Subordinated Promissory Note payable by
    ComVest Venture Partners, L.P. to Bank of America, dated
    March 15, 2002 and assumed by the Company on March 15,
    2002, filed as Exhibit 10.60 to the Registrants
    Annual Report on Form 10-K for the year ended December 31,
    2001, dated April 16, 2002 (SEC File Number 001-15459)
    and incorporated herein by reference.                                                                                                                                                       
|        | 10 | .19                     |  | Securities Pledge Agreement among the Company,
    Marshall B. Hunt and Hunt Family Investments, L.L.L.P.,
    dated March 16, 2002, filed as Exhibit 10.61 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.                                                                                                                                                                                                   
|        | 10 | .20                     |  | Loan and Security Agreement between the Company
    and Standard Federal Bank National Association acting by and
    through LaSalle Business Credit, Inc., as its agent, dated
    March 18, 2002, filed as Exhibit 10.62 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.                                                                                                                                    
|        | 10 | .21                     |  | Warrant, dated March 18, 2002, granted by
    the Company to Standard Federal Bank National Association,
    acting by and through LaSalle Business Credit, Inc, as its
    agent, which grants the right to purchase 0.6% of the
    Registrants common stock outstanding at a price of
    $0.01 per share until March 18, 2012, filed as
    Exhibit 10.63 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.
|        | 10 | .22                     |  | Warrant, dated March 18, 2002, granted by
    the Company to Standard Federal Bank National Association,
    acting by and through LaSalle Business Credit, Inc, as its
    agent, which grants the right to purchase 0.9% of the
    Registrants common stock outstanding at a price of
    $0.01 per share until March 18, 2012, filed as
    Exhibit 10.64 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.
|        | 10 | .23                     |  | Employment Agreement between the Company and
    Marshall B. Hunt, dated March 16, 2002, filed as
    Exhibit 10.65 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                                                                                                                           

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##### Table of Contents



|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- | -- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Exhibits
|        |    |                        
|        | 10 | .24                     |  | Non-Qualified Stock Option Agreement between the
    Company and Marshall B. Hunt, dated March 15, 2002,
    for the purchase of 1,000,000 shares of the
    Registrants common stock at an option price of
    $0.45 per share, filed as Exhibit 10.66 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.        
|        | 10 | .25                     |  | Non-Qualified Stock Option Agreement between the
    Company and Marshall B. Hunt, dated March 15, 2002,
    for the purchase of 2,500,000 shares of the
    Registrants common stock at an option price of
    $0.45 per share, filed as Exhibit 10.67 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.        
|        | 10 | .26                     |  | Employment Agreement between the Company and
    William E. Peterson, Jr., dated March 16, 2002,
    filed as Exhibit 10.68 to the Registrants Annual
    Report on Form 10-K for the year ended December 31, 2001,
    dated April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                     
|        | 10 | .27                     |  | Non-Qualified Stock Option Agreement between the
    Company and William E. Peterson, Jr., dated
    March 15, 2002, for the purchase of 1,000,000 shares
    of the Registrants common stock at an option price of
    $0.45 per share, filed as Exhibit 10.69 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 2001, dated April 16, 2002 (SEC File
    Number 001-15459) and incorporated herein by reference.
|        | 10 | .28                     |  | Co-Promotion Agreement between the Company and
    Medtronic, Inc., dated March 15, 2002, filed as
    Exhibit 10.70 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                            
|        | 10 | .29                     |  | Agreement between the Company, Steven Picheny and
    Howard Fuchs, dated March 14, 2002, filed as
    Exhibit 10.71 to the Registrants Annual Report on
    Form 10-K for the year ended December 31, 2001, dated
    April 16, 2002 (SEC File Number 001-15459) and
    incorporated herein by reference.                                                                                                                                            
|        | 10 | .30                     |  | Employment Agreement between the Company and
    Robert J. Wenzel, dated May 8, 2002 (incorporated by
    reference to Exhibit 10.1 to the Registrants Form
    10-Q for the three months ended June 30, 2002).                                                                                                                                                                                                                                        
|        | 10 | .31                     |  | Amendment No. 1 to Note Purchase Agreement,
    dated as of June 10, 2002, by and among the Company,
    ComVest Venture Partners, L.P. and the Additional Note
    Purchasers (incorporated by reference to Exhibit 10.2 to
    the Registrants Form 10-Q for the three months ended
    June 30, 2002).                                                                                                                                              
|        | 10 | .32                     |  | Amendment No. 2 to Note Purchase Agreement,
    dated as of July 29, 2002, by and among the Company,
    ComVest Venture Partners, L.P. and the Additional Note
    Purchasers (incorporated by reference to Exhibit 10.3 to
    the Registrants Form 10-Q for the three months ended
    June 30, 2002).                                                                                                                                              
|        | 10 | .33                     |  | Asset Purchase Agreement, dated as of
    August 23, 2002, by and among Stepic Corporation, the
    Company, and Arrow International, Inc. (incorporated by
    reference to Exhibit 2.1 to the Registrants Current
    Report on Form 8-K, filed with the Commission on
    September 10, 2002).                                                                                                                                                      
|        | 10 | .34                     |  | Letter Agreement among the Company, ComVest
    Venture Partners, L.P. and Medtronic, Inc., dated
    August 30, 2002 (incorporated by reference to
    Exhibit 10.1 to the Registrants Current Report on
    Form 8-K, filed with the Commission on September 10, 2002).                                                                                                                                                                              
|        | 10 | .35                     |  | Amendment to Employment Agreement between the
    Company and William E. Peterson, Jr., dated
    September 16, 2002. (incorporated by reference to
    Exhibit 10.1 to the Registrants Quarterly Report on
    Form 10-Q dated November 14, 2002).                                                                                                                                                                                                    
|        | 10 | .36                     |  | Common Stock Purchase Warrant, dated as of
    September 26, 2002, by and between the Company and Epoch
    Financial Group, Inc. (incorporated by reference to
    Exhibit 10.2 to the Registrants Quarterly Report on
    Form 10-Q dated November 14, 2002).                                                                                                                                                                                        
|        | 10 | .37                     |  | Common Stock Purchase Warrant, dated as of
    September 26, 2002, by and between the Company and
    Lippert/Heilshorn & Associates, Inc. (incorporated
    by reference to Exhibit 10.3 to the Registrants
    Quarterly Report on Form 10-Q dated November 14, 2002).                                                                                                                                                                               

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##### Table of Contents



|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                            
|------- | -- | ----------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Exhibits
|        |    |                        
|        | 10 | .38                     |  | First Amendment to Loan and Security Agreement,
    entered into as of December 23, 2002, by and between the
    Company and Standard Federal Bank National Association acting by
    and through LaSalle Business Credit, Inc., as its agent
    (incorporated by reference to Exhibit 10.41 to the
    Registrants Annual Report on Form 10-K dated
    March 28, 2003).
|        | 10 | .39                     |  | Amendment to Employment Agreement, dated
    November 15, 2002, between the Company and Marshall B.
    Hunt (incorporated by reference to Exhibit 10.42 to the
    Registrants Annual Report on Form 10-K dated
    March 28, 2003).                                                                                                                                     
|        | 10 | .40                     |  | Amendment to Option Agreement, dated
    November 15, 2002, between the Company and Marshall B. Hunt
    (incorporated by reference to Exhibit 10.43 to the
    Registrants Annual Report on Form 10-K dated
    March 28, 2003).                                                                                                                                         
|        | 10 | .41                     |  | Amendment to Employment Agreement, dated
    November 12, 2002, between the Company and Robert J.
    Wenzel (incorporated by reference to Exhibit 10.44 to the
    Registrants Annual Report on Form 10-K dated
    March 28, 2003).                                                                                                                                     
|        | 10 | .42                     |  | Amendment to Employment Agreement, dated
    March 7, 2003, between the Company and William E.
    Peterson Jr. (incorporated by reference to Exhibit 10.45 to
    the Registrants Annual Report on Form 10-K dated
    March 28, 2003).                                                                                                                                  
|        | 10 | .43                     |  | Option Agreement, dated February 25, 2003
    between the Company and Marshall B. Hunt (incorporated by
    reference to Exhibit 10.46 to the Registrants Annual
    Report on Form 10-K dated March 28, 2003).                                                                                                                                                           
|        | 10 | .44                     |  | Option Agreement, dated February 25, 2003
    between the Company and William E. Peterson, Jr.
    (incorporated by reference to Exhibit 10.47 to the
    Registrants Annual Report on Form 10-K dated
    March 28, 2003).                                                                                                                                               
|        | 10 | .45                     |  | Lease Agreement, entered into as of
    December 15, 2000, by and between The Development Authority
    of the City of Manchester and the Company (incorporated by
    reference to Exhibit 10.48 to the Registrants Annual
    Report on Form 10-K dated March 28, 2003).                                                                                                
|        | 10 | .46                     |  | Second Amendment to Co-Promotion Agreement, dated
    April 15, 2003, between the Company and
    Medtronic, Inc. (incorporated by reference to
    Exhibit 10.1 of the Registrants Quarterly Report
    filed on From 10-Q dated August 14, 2003).                                                                                                                       
|        | 10 | .47                     |  | Exclusive Distribution Agreement, dated
    April 15, 2003, between the Company and
    Medtronic, Inc. (incorporated by reference to
    Exhibit 10.2 of the Registrants Quarterly Report
    filed on Form 10-Q dated August 14, 2003).                                                                                                                                 
|        | 10 | .48                     |  | Amendment to Employment Agreement, dated
    June 17, 2003, between the Company and William E.
    Peterson (incorporated by reference to Exhibit 10.3 of the
    Registrants Quarterly Report filed on Form 10-Q dated
    August 14, 2003).                                                                                                                             
|        | 10 | .49                     |  | Amendment to Employment Agreement, dated
    June 21, 2003, between the Company and Robert R.
    Singer (incorporated by reference to Exhibit 10.4 of the
    Registrants Quarterly Report filed on Form 10-Q dated
    August 14, 2003).                                                                                                                                
|        | 10 | .50                     |  | Common Stock Purchase Warrant between
    Lippert/Heilshorn & Associates, Inc., dated
    June 30, 2003 (incorporated by reference to
    Exhibit 10.5 of the Registrants Quarterly Report
    filed on Form 10-Q dated August 14, 2003).                                                                                                                                 
|        | 10 | .51                     |  | Amendment to Promissory Note, dated July 15,
    2003, between the Company and Roy C. Mallady, Jr.
    (incorporated by reference to Exhibit 10.6 of the
    Registrants Quarterly Report filed on Form 10-Q dated
    August 14, 2003).                                                                                                                                  
|        | 10 | .52                     |  | Amendment to Promissory Noted, dated
    July 15, 2003, between the Company and Roy C.
    Mallady, Jr. (incorporated by reference to
    Exhibit 10.7 of the Registrants Quarterly Report
    filed on Form 10-Q dated August 14, 2003).                                                                                                                                 
|        | 10 | .53                     |  | Amendment No. 1 to Note Purchase Agreement,
    dated October 21, 2003, by and among the Company, ComVest
    Venture Partners, L.P., Medtronic, Inc., and certain
    Additional Note Purchasers (incorporated by reference to
    Exhibit 10.1 of the Registrants Current Report filed
    on Form 8-K dated November 12, 2003).                                        

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##### Table of Contents



|        |    |                         |  |                                                                                                                                                                                                                                                                                                                                                                     
|------- | -- | ----------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |                        
|Number  |    | Description of Exhibits
|        |    |                        
|        | 10 | .54                     |  | Amended and Restated Securityholders Agreement,
    dated October 21, 2003, by and among the Company, ComVest
    Venture Partners, L.P., Medtronic, Inc., Standard Federal
    Bank National Association and Marshall B. Hunt
    (incorporated by reference to Exhibit 10.2 of the
    Registrants Current Report filed on Form 8-K dated
    November 12, 2003).
|        | 10 | .55                     |  | Amendment to Employment Agreement, dated
    October 21, 2003, between the Company and Marshall B.
    Hunt (incorporated by reference to Exhibit 10.3 of the
    Registrants Current Report filed on Form 8-K dated
    November 12, 2003).                                                                                                                       
|        | 10 | .56                     |  | Amendment to Employment Agreement, dated
    October 21, 2003, between the Company and Robert Wenzel
    (incorporated by reference to Exhibit 10.4 of the
    Registrants Current Report filed on Form 8-K dated
    November 12, 2003).                                                                                                                          
|        | 10 | .57                     |  | Stock Option Agreement, dated October 21,
    2003, between the Company and Marshall Hunt (incorporated by
    reference to Exhibit 10.5 of the Registrants Current
    Report filed on Form 8-K dated November 12, 2003).                                                                                                                                         
|        | 10 | .58                     |  | Stock Option Agreement, dated October 21,
    2003, between the Company and Robert Wenzel (incorporated by
    reference to Exhibit 10.6 of the Registrants Current
    Report filed on Form 8-K dated November 12, 2003).                                                                                                                                         
|        | 10 | .59*                    |  | Separation Agreement, by and between the Company
    and Marshall B. Hunt, dated January 14, 2004.                                                                                                                                                                                                                                                                  
|        | 10 | .60*                    |  | Amendment to Employment Agreement between the
    Company and Robert J. Wenzel, dated February 25, 2004.                                                                                                                                                                                                                                                            
|        | 10 | .61*                    |  | Form of Bonus Agreement dated November 1,
    2003, between the Company and Robert Singer, L. Bruce Maloy
    and Elaine Swygert.                                                                                                                                                                                                                                   
|        | 14 | .1*                     |  | Code of Conduct and Ethics                                                                                                                                                                                                                                                                                                                                          
|        | 16 | .1                      |  | Letter of PricewaterhouseCoopers LLP regarding
    change in certifying accountant (incorporated by reference to
    Exhibit 16.1 to the Registrants Current Report on
    Form 8-K dated November 12, 2002).                                                                                                                                                      
|        | 21 | .1                      |  | Subsidiaries of the Company (incorporated by
    reference to Exhibit 21.1 to the Companys Annual
    Report on Form 10-K for the year ended December 31, 2002).                                                                                                                                                                                                   
|        | 23 | .1*                     |  | Consent of Grant Thornton LLP                                                                                                                                                                                                                                                                                                                                       
|        | 23 | .2*                     |  | Consent of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                                                               
|        | 31 | .1                      |  | Certification of the Chief Executive Officer of
    the Company pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                      
|        | 31 | .2                      |  | Certification of the Principal Financial Officer
    of the Company pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                  
|        | 32 | .1                      |  | Certification of the Chief Executive Officer of
    the Company pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                                   
|        | 32 | .2                      |  | Certification of the Principal Financial Officer
    of the Company pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.                                                                                                                                                                               



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|  |                 
|- | ----------------
|* | Previously Filed

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##### Table of Contents



SIGNATURES

Pursuant to requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized on the 29th
day of April, 2004.



| |                                    
| | -----------------------------------
| | HORIZON MEDICAL PRODUCTS, INC.     
|
| | /s/ ROBERT J. WENZEL               
| |                                    
| | Robert J. Wenzel                   
| | President, Chief Operating Officer 
| | and Interim Chief Executive Officer
| | (Principal Executive Officer)      

KNOW ALL MEN BY THESE PRESENT, that this
Amendment has been signed by the following persons in the
capacities indicated on the dates indicated on April 29,
2004.

|                                     |  |                                                                                                                           |  | 
|------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------- |  | 
|                                     |  |                                                                                                                          
|Signature                            |  | Title                                                                                                                    
|                                     |  |                                                                                                                          
|                                    
|/s/ ROBERT J. WENZELRobert J. Wenzel |  | President, Chief Operating Officer and Interim
    Chief Executive Officer (Principal Executive Officer) and
    Director
|                                    
|                                    
|/s/ ELAINE SWYGERTElaine Swygert     |  | Corporate Controller (Principal Financial Officer
    and Principal Accounting Officer)                                  
|                                    
|/s/ HAROLD BLUEHarold Blue           |  | Director                                                                                                                 
|                                    
|/s/ JAMES BRANDSJames Brands         |  | Director                                                                                                                 
|                                    
|/s/ MARSHALL B. HUNTMarshall B. Hunt |  | Director                                                                                                                 
|                                    
|/s/ DAVID KUDavid Ku                 |  | Director                                                                                                                 
|                                    
|/s/ ROBERT PRIDDYRobert Priddy       |  | Director                                                                                                                 
|                                    
|Robert D. Tucker                     |  | Director                                                                                                                 

30