<PAGE>

                                                                 Exhibit 99(vi)

                         UNITED STATES BANKRUPTCY COURT
                         FOR THE DISTRICT OF CONNECTICUT

In re:                                 )    CHAPTER 11
                                       )
POWER DESIGNS, INC. and                )    CASE NOS. 98-50117 & 98-50118
PDIXF ACQUISITION CORPORATION          )    (JOINTLY ADMINISTERED)

                                       )
                                       )
                DEBTORS-IN-POSSESSION  )

                      AMENDED DISCLOSURE STATEMENT FOR THE
                    AMENDED PLAN OF REORGANIZATION FOR POWER
                 DESIGNS, INC. AND PDIXF ACQUISITION CORPORATION
                 -----------------------------------------------

1.       INTRODUCTION

         This is the Disclosure Statement(1) for the Amended Plan of
Reorganization for Power Designs, Inc. and PDIXF Acquisition Corporation (the
"Plan") proposed by Power Designs, Inc. and PDIXF Acquisition Corporation
(referred to hereinafter individually as "PDI" and "PDIXF" respectively, and
collectively referred to as the "Debtors"). The Debtors submit this Disclosure
Statement for the Amended Plan of Reorganization for Power Designs, Inc. and
PDIXF Acquisition Corporation (the "Disclosure Statement") pursuant to Section
1125 of the United States Bankruptcy Code, 11 U.S.C. Section 101 ET SEQ. (the
"Code"). This Disclosure Statement is to be used

--------
(1) Unless otherwise defined herein, capitalized terms used herein have the
meanings ascribed to such terms in the Plan. PDI has also filed its annual and
various periodic reports required by the SEC, including 10K, 10Q and 8K Reports.
This information is available to any person upon request.


                                      -1-
<PAGE>

in connection with the solicitation of acceptances of the Plan. A copy of the
Plan is attached hereto as Exhibit A.

2.       NOTICE TO HOLDERS OF CLAIMS

         The purpose of this Disclosure Statement is to enable you, as a
Creditor whose Claim is impaired, to make an informed decision in exercising
your right to accept or reject the Plan.

THIS DISCLOSURE STATEMENT CONTAINS IMPORTANT INFORMATION THAT MAY BEAR UPON YOUR
DECISION TO ACCEPT OR REJECT THE PLAN OF REORGANIZATION PROPOSED BY THE DEBTORS.
PLEASE READ THIS DOCUMENT WITH CARE.

         After notice and a hearing, the Bankruptcy Court entered an order
pursuant to Section 1125 of the Code approving this Disclosure Statement as
containing information of a kind, and in sufficient detail, adequate to enable a
hypothetical, reasonable investor typical of the solicited Classes of Claims to
make an informed judgment with respect to the acceptance or rejection of the
Plan.

APPROVAL OF THIS DISCLOSURE STATEMENT BY THE BANKRUPTCY COURT DOES NOT
CONSTITUTE A DETERMINATION BY THE BANKRUPTCY COURT OF THE FAIRNESS OR MERITS
OF THE PLAN OR OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED
IN THIS DISCLOSURE STATEMENT.

         Each holder of a Claim entitled to vote to accept or reject the Plan
should read the Disclosure Statement and the Plan in their entirety before
voting. No solicitation of votes to accept or reject the Plan may be made except
pursuant to this Disclosure Statement and Section 1125 of


                                      -2-
<PAGE>

the Code.

         If you do not vote to accept the Plan, you may still be bound by the
Plan.

         TO BE SURE YOUR BALLOT IS COUNTED, YOUR BALLOT MUST BE RECEIVED BY
DEBTORS' COUNSEL NO LATER THAN 5:00 P.M., ON THE DATE SET BY THE BANKRUPTCY
COURT. WHEN YOU RETURN YOUR BALLOT, YOU SHOULD INDICATE ON THE BALLOT FORM THE
CLASS OR CLASSES IN WHICH YOUR CLAIMS ARE CLASSIFIED AND DESIGNATE THE DEBTOR
AGAINST WHICH YOU ARE MAKING YOUR CLAIM BY MARKING THE APPROPRIATE SPACE
PROVIDED ON YOUR BALLOT FOR SUCH PURPOSE. For detailed voting instructions and
the names and addresses of the persons you may contact if you have questions
regarding the voting procedures, see "Voting Procedures and Requirements -
Parties-In-Interest Entitled to Vote."

         Pursuant to Section 1128(a) of the Code, the Bankruptcy Court has
scheduled a hearing to consider Confirmation of the Plan (the "Confirmation
Hearing") in the Bankruptcy Court at 915 Lafayette Boulevard, Bridgeport,
Connecticut, on the date and time set forth in the order approving this
disclosure statement..

3.       HISTORY OF THE DEBTORS AND EVENTS LEADING UP TO CHAPTER 11 CASE

         3.1      GENERAL INFORMATION ABOUT THE DEBTORS.


                                      -3-
<PAGE>

         PDI was organized on July 7, 1952 under the laws of the State of New
York. PDI was subsequently reincorporated in Delaware in August of 1997. PDI's
common stock, $.0001 par value (the "Old PDI Common Stock") is registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended. The PDI Common
Stock is traded on the NASDAQ Bulletin Board. In October 1996 PDI created a new
class of Class A Convertible Preferred Stock (the "Old PDI Preferred Stock")
with a par value of $.01 per share. Since its inception, PDI has been engaged in
the design and manufacture of electronically controlled power sources and other
electronic devices used in the operation of electronic equipment. The power
supplies produced by the Debtors are connected to primary sources, such as
commercial power lines, and serve to transform, rectify, regulate or condition
the source of power. The equipment manufactured by the Debtors is used by
industry, scientific research and medical equipment manufacturers for such
applications as lab research, radar systems, data gathering, well logging and
general computers based applications, as well as in other related areas. The
Debtors' new product line (the "UPS Product") is specifically designed to
provide constant, high reliability output voltage and frequency under varied and
severe input power condition, including total elimination of the input power
source. The Debtors' customers include private companies, government agencies
and educational institutions, both within and outside of the United States.

         There are approximately five hundred companies in the country who
manufacture one or


                                      -4-
<PAGE>

more competitive products. To differentiate itself, the Debtors strive to
maintain a reputation for


                                      -5-
<PAGE>

excellent quality and reliability. No one customer of the Debtors accounts for
ten percent or more of the Debtors' business.

         3.2      VENTURE PARTNERS RETAINED TO ASSIST PDI IN NEGOTIATIONS WITH
                  TRADE CREDITORS AND IRS.

         Venture Partners Ltd. ("VPL") is a Connecticut corporation engaged in
investment banking and management consulting services. Gary Laskowski and
Jonathan Betts are officers and directors of VPL. In October 1991 PDI engaged
VPL to assist PDI in negotiating an out of court workout with the Internal
Revenue Service ("IRS") and PDI's trade creditors and to provide necessary
working capital to ensure the continued viability of PDI. PDI paid VPL a fee of
$10,000.00 for this engagement. VPL was successful in negotiating an out of
court workout with PDI's trade creditors. However, after nearly a year of
discussions with the IRS, VPL was unable to negotiate a settlement with the IRS.
Thereafter, on October 16, 1992, PDI filed for protection under Chapter 11 of
the Bankruptcy Code in the Eastern District of New York as Case No.892-85769-478
(the "First PDI Bankruptcy").

         3.3      THE FIRST PDI BANKRUPTCY PROCEEDING.

At the commencement of the First PDI Bankruptcy, the primary shareholders of the
Old PDI Common Stock consisted of the following persons: Sandra Roth (23.66%),
Melvin Becker (23.67%) and Jeri Fink (23.67%). The balance of the Old PDI Common
Stock, approximately


                                      -6-
<PAGE>

29%, was widely held by approximately 900 persons.

         During the First PDIF Bankruptcy, the court authorized Melvin Becker, a
director and principal shareholder of PDI (or his designee), to provide up to
$100,000.00 of post-petition financing to PDI. Pursuant to this order, VPL, as
Becker's designee, provided $60,000.00 of post-petition financing to PDI. On
June 7, 1993, a subsequent motion authorizing VPL to provide $250,000.00 in
post-petition financing was filed in June, 1993, but later withdrawn. On June
30, 1993, PDI filed its Amended Plan of Reorganization (the "First PDI Plan").

         3.4      CONFIRMATION AND EXIT FINANCING.

         The First PDI Plan was confirmed on January 31, 1994. Upon the
consummation of the First PDI Plan, VPL arranged for a $130,500 loan to be made
to PDI and for the factoring of PDI's accounts. The loan was provided by VPL, as
agent for four individuals, David Smith, Bruce MacDonald, Thomas O'Grady and Sam
Occhipinti as Trustee for his father-in-law (the "Term Note"). The Term Note
provided for interest only during the first year and thereafter principal
payments of $1,900 per month with a balloon payment of $84,900 due on June 1,
1997. The Term Note was secured by a lien on substantially all of the assets of
PDI. The Term Note was paid off in October 1996. The factoring was provided by
Inverness, a commercial finance company controlled by Laskowski and Betts. The
factoring arrangement with Inverness continued until the time of the Penril
Acquisition when the factoring


                                      -7-
<PAGE>


                                      -8-
<PAGE>

arrangement was terminated and replaced by various revolving credit agreements
with Inverness.

         3.5      EQUITY OWNERSHIP OF PDI UPON CONSUMMATION OF THE FIRST PDI
                  PLAN.

         As provided in the First PDI Plan, the then holders of the Old PDI
Common Stock retained their equity interests in PDI albeit subject to the
dilution resulting from the issuance of 810,716 shares (40%) of Old PDI Common
Stock to VPL. VPL also acquired 407,240 additional shares of Old PDI Common
Stock from Mr. Becker and Ms. Roth. As a result of these transactions, VPL held
approximately sixty percent (60%) of the Old PDI Common Stock. VPL has
transferred all of its holdings in PDI as follows:

<TABLE>
<CAPTION>
------------------------------- -----------------------------------------------------------------
  DATE OF TRANSFER                            AMOUNT AND IDENTITY OF TRANSFEREE
------------------------------- -----------------------------------------------------------------
<S>                             <C>
          09/30/95              1,072,028 shares to Millenia Capital Holdings LLC ("Millenia")
------------------------------- -----------------------------------------------------------------
          09/30/95              145,928 (36,482 shares to each of MacDonald and Occhipinti, and
                                50,637 to each of Smith and O'Grady)
------------------------------- -----------------------------------------------------------------
          09/15/97              149,468 shares to Bril Corp. for $25,000
------------------------------- -----------------------------------------------------------------
</TABLE>

Millenia is a Connecticut limited liability company affiliated with Laskowski
and Betts. Bril Corp. is a Connecticut corporation owned in part by Laskowski
and Betts.


                                      -9-
<PAGE>

         3.6      POST CONSUMMATION LOANS FROM INVERNESS - FIRST REVOLVING LOAN
AGREEMENT WITH INVERNESS.

         On January 16, 1995, Inverness and PDI entered into a Revolving Loan
Agreement wherein Inverness agreed to provide a $100,000 line of credit to PDI
(the "First Revolving Loan"). The First Revolving Loan was in addition to the
factoring being provided by Inverness. The First Revolving Loan was secured by a
Lien on substantially all of PDI's assets. The First Revolving Loan was amended
on a number of occasions as follows:

<TABLE>
<CAPTION>
             ---------------------------- ----------------------------- ------------------------------
                                                  INCREASE IN                   EXTENSION OF
                  DATE OF AMENDMENT             LOAN AMOUNT TO:                 DUE DATE TO:
             ---------------------------- ----------------------------- ------------------------------
<S>                                       <C>                           <C>
                      05/31/95                                $200,000            12/29/95
             ---------------------------- ----------------------------- ------------------------------
                      08/31/95                                 275,000                -
             ---------------------------- ----------------------------- ------------------------------
                      12/14/95                                 300,000            03/29/96
             ---------------------------- ----------------------------- ------------------------------
                      01/29/96                                 400,000            04/30/96
             ---------------------------- ----------------------------- ------------------------------
                      06/20/96                                 700,000            12/30/96
             ---------------------------- ----------------------------- ------------------------------
                      07/29/96                               1,200,000                -
             ---------------------------- ----------------------------- ------------------------------
                      09/18/96                               1,500,000                -
             ---------------------------- ----------------------------- ------------------------------
</TABLE>

The balance due under the First Revolving Loan, $1,418,556.92, was paid on
October 15, 1996 from the proceeds of financing obtained in connection with the
Penril Acquisition.


                                      -10-
<PAGE>

         3.7      PENRIL ACQUISITION.

         On October 11, 1996, PDIXF Acquisition Corp., as purchaser, and the
wholly owned subsidiary of PDI, entered into an Asset Purchase Agreement with
Technipower, Inc. ("TPI"), Constant Power, Inc. ("CPI"), and Penril Datacomm
Networks, Inc. ("Penril"), the parent company to TPI and CPI (collectively, TPI,
CPI and Penril are referred to as the "Seller"), to acquire all of the assets
employed in "Variac" auto-transformers, the "Mil Spec" power supply and the
UPS/PLC AC power protection businesses conducted by TPI and CPI. The assets
purchased included machinery, equipment, inventories, accounts, intangible
assets and technology. The purchase price for the assets was approximately
$4,400,000, of which a portion, $1,694,085, was paid in cash and the balance,
$2,750,000, was paid by the issuance of a short-term promissory note to the
Seller. PDIXF also assumed certain liabilities, principally trade debt, in the
amount of approximately $575,500.00 and employee accrued vacation of
approximately $69,000.00. Additionally, PDIXF agreed to pay the Seller a two
percent (2%) royalty on all sales of UPS/PLC products for the period from
September 30, 1997 through June 30, 2001. The Seller is also referred to
hereinafter as "Hayes." PDIXF claims substantial offsets against Hayes, thereby
substantially reducing the net amount of the Seller Note, as defined
hereinafter.


                                      -11-
<PAGE>

         3.8      FINANCING THE PENRIL ACQUISITION AND RETIREMENT OF EXISTING
DEBT.

         The acquisition of the assets from TPI and CPI, related working capital
needs associated therewith and the retirement of existing indebtedness was
financed through three primary sources: seller financing, additional borrowing
from Inverness and the issuance by PDI of subordinated promissory notes.

                  (a).     SELLER FINANCING.

         As part of the purchase, PDIXF executed a promissory note payable to
TPI and CPI jointly in the original principal amount of $2,750,000 (the "Seller
Note"). The Seller Note was payable in full on December 31, 1996. Interest was
payable at "Prime Rate" plus two percent (2%). The Seller Note was guaranteed by
PDI and secured by a second lien on PDIXF's assets, subject to substantial
offsets claimed by PDIXF.

                  (b).     INVERNESS LOANS TO PDI AND PDIXF.

         Inverness and PDI entered into a Loan Agreement and Revolving Credit
Note in the original principal amount of $1,000,000 (the "PDI Note"). The PDI
Note was due and payable in full on April 1, 1998 unless demand was made sooner.
The PDI Note provided for interest at the rate of eighteen percent (18%) per
annum. On November 27, 1996, the borrowing limit under the PDI Note was
increased to $1,500,000. The PDI Note was secured by a lien on all of PDI's
assets. Additionally, Inverness and PDIXF entered into a Loan


                                      -12-
<PAGE>

Agreement and Revolving Credit Note in the original principal balance of
$1,500,000 (the "PDIXF Note"). The PDIXF Note was also due April 1, 1998 unless
demand was made sooner. The PDIXF Note provided for interest at the rate of
eighteen (18%) percent per annum. The PDIXF Note was secured by a first lien on
all of PDIXF's assets. During the fiscal year ending June 30, 1997, the Debtors
paid Inverness fees totaling $100,000 in connection with it various loan
agreements.

                  (c).     SUBORDINATED PROMISSORY NOTES.

         In October, 1996, PDI also issued Subordinated Promissory Notes (the
"PDI Subordinated Notes") as follows:

<TABLE>
<CAPTION>
                          ------------------------------ --------------------------------------------
                                                                           ORIGINAL PRINCIPAL AMOUNT
                          ------------------------------ --------------------------------------------
<S>                                                      <C>
                          Equitas L.P.                                                   $700,000.00
                          ------------------------------ --------------------------------------------
                          Lois Horn                                                       140,000.00
                          ------------------------------ --------------------------------------------
                          Antoinette Rose                                                 160,000.00
                          ------------------------------ --------------------------------------------
                          Thomas O'Grady                                                   29,215.38
                          ------------------------------ --------------------------------------------
                          David H. Smith II                                                29,215.38
                          ------------------------------ --------------------------------------------
                          Bruce MacDonald                                                  12,984.62
                          ------------------------------ --------------------------------------------
                          Dennis
                          and Terri Nesta                                                  16,000.00
                          ------------------------------ --------------------------------------------

                          ------------------------------ --------------------------------------------
</TABLE>


                                      -13-
<PAGE>

<TABLE>
<CAPTION>
                          ------------------------------ --------------------------------------------
<S>                                                      <C>
                          Total                                                        $1,087,415.83
                          ------------------------------ --------------------------------------------
</TABLE>

(Collectively, the above listed individuals are referred to as
"Sub-Noteholders"). The PDI Subordinated Notes provided for quarterly interest
payments at the rate of eight percent (8%) per annum. The PDI Subordinated Notes
were due October 31, 2001. Additionally, the Sub-Noteholders acquired 316,743
shares of Old PDI Preferred Stock and warrants to acquire 416,749 shares of Old
PDI Common Stock for aggregate consideration of $271,853.02.

         The seller financing, the Inverness loans and PDI Subordinated Notes
totaled approximately $6,609,000 in aggregate. The proceeds of these financings
were used to satisfy the purchase price of approximately $4,400,000, retire
existing indebtedness of $1,490,000, pay costs and expenses associated with the
acquisition of $260,000, including $147,950 paid to VPL, and provide general
working capital.

         3.9      DEFAULT ON THE SELLER NOTE.

         The principal amount of the Seller Note was not repaid when due
(December 31, 1996), thereby placing PDIXF in default. On March 10, 1997 the
Debtors and Hayes executed a forbearance agreement (the "Forbearance
Agreement"), which required the Debtors to make payments of $50,000 per week
totaling $200,000 prior to March 21, 1997, a payment of $500,000 on or before
April 14, 1997, and a balloon payment equal to the remainder due


                                      -14-
<PAGE>

on or before May 31, 1997. All payments required under the Forbearance Agreement
prior to April 29, 1997 were made in full.

         On April 29, 1997, the Debtors and Hayes entered into a modification
agreement (the "Modification Agreement"), which created a new payment schedule
under the Forbearance Agreement. The Modification Agreement required the Debtors
to pay Hayes $400,000 on April 30, 1997, $50,000 on each of May 5, May 12 and
May 19, 1997, $300,000 on May 30, 1997, and the remainder due under the Term
Note on July 31, 1997.

         Hayes subsequently agreed to permit the Debtors to make payments of
$100,000, $50,000, $75,000 and $75,000 on May 30, 1997, June 4, 1997, June 10,
1997 and June 20, 1997, respectively, in lieu of the $300,000 payment due on May
30, 1997. As of June 10, 1997, the Debtors were current on their obligations
under the terms of the Forbearance Agreement, as modified. Subsequent to June
10, 1997, the Debtors remained current on interest amounts due to Hayes, but
were unable to repay the $980,000 outstanding principal obligation due on July
31, 1997.

         3.10     CONSULTING AGREEMENT WITH VPL. On October 8, 1996, PDI and VPL
entered into a consulting agreement whereby VPL would provide certain services
for a fee of $10,600 per month (including applicable taxes) and the
reimbursement of out-of-pocket expenses. Pursuant to this agreement, VPL has
been paid $138,246.74 ($107,255 in fees and $30,991.74


                                      -15-
<PAGE>

in expenses). The last payment received by VPL under this agreement was $5,000
on August 5, 1997. Additionally up to the Petition Date, VPL had accrued an
additional $124,422.77.

         3.11     ADDITIONAL INVERNESS LOAN.

         On December 31, 1996, Inverness and PDIXF entered into a Second Loan
Agreement and Revolving Credit Note (the "Second PDIXF Note"). The Second PDIXF
was originally for $1,000,000. The amount available under the Second PDIXF Note
was increased as follows:

<TABLE>
<CAPTION>
                                    -------------------- -----------------
                                    DATE                     INCREASE TO:
                                    -------------------- -----------------
<S>                                                      <C>
                                    3/20/97                    $2,000,000
                                    -------------------- -----------------
                                    6/21/97                    $3,000,000
                                    -------------------- -----------------
                                    11/5/97                    $5,000,000
                                    -------------------- -----------------
</TABLE>

         3.12     INVERNESS LEASE.

         In addition to the various loans provided by Inverness to the Debtors,
Inverness entered into three (3) leases with PDIXF, each dated December 31,
1996, and covering specific items of equipment. Each lease had a term of
eighteen (18) months and provided for an automatic renewal unless there was
ninety (90) days prior written notice of cancellation before the automatic
renewal date. Collectively, the three leases provide for monthly payments during
the initial term of $14,178.03 per month and $4,369.05 per month for the renewal
period.


                                      -16-
<PAGE>

The equipment being leased to PDIXF pursuant to the three (3) leases cost
Inverness approximately $175,000. Inverness has agreed to a suspension of
payments under the leases until the Debtors or Reorganized PDI makes a decision
as to whether any of the equipment will be maintained by the Debtors in
connection with the UPS products. PDI has recorded an obligation of $138,726.23
on its books.

         3.13     HAMPSHIRE SECURITIES AND THE BRIDGE LOANS.

         In January of 1997 PDI obtained an underwriting letter from Hampshire
Securities Corporation ("HSC") whereby HSC agreed, on a best efforts basis, to
raise a minimum of $6.0 million in a secondary offering of the old PDI Common
Stock. As part of this agreement, Hampshire also agreed to provide twenty
percent of a $3.0 million private placement (the "Bridge Loan"), the proceeds of
which would be used to pay off the Seller Note. HSC provided $925,000 of the
Bridge Loan and PDI raised $1,000,000. Substantially all of the Bridge Loan (net
of expenses) was used to reduce the Debtors' obligations under the Seller Note.

         In June of 1997, in part to meet its final obligation to Hayes
($1,000,000), and in part to provide additional working capital, the Debtors
authorized the issuance of additional bridge securities in an amount of no more
than $3.0 million. HSC provided the Debtors verbal


                                      -17-
<PAGE>

assurances that it would provide a substantial part of this bridge. However, in
late July, 1997, HSC declined to participate in a second bridge.


                                      -18-
<PAGE>

         3.14     THE DIRECTOR RELATED LOANS.

         In October of 1997, Equitas ($50,000), Robert Sparacino ($100,000),
Bril Profit Sharing Plan ($25,000) and Bril Money Purchase Plan ($25,000) made
loans to PDI and in December, 1997 Mr. Sparacino loaned PDI an additional
$113,000 (collectively the "Director Loans"). The balance due on the Director
Loans as of the Petition Date was $319,398.06.

         3.15     OPERATIONS OF PDI PRIOR TO PENRIL ACQUISITION.

         PDI was not profitable on a yearly basis prior to and subsequent to its
emergence from the First PDI Bankruptcy due to the low volume of its sales.
PDI's strategy was to pursue acquisitions which were consistent with the PDI
power supply businesses and which would contribute to profit and
non-manufacturing overhead. PDI evaluated a number of potential acquisitions,
one of which was pursued and abandoned due to information gleaned as part of the
PDI due diligence process. Ultimately, the acquisition of the TPI and CPI assets
occurred in October, 1996.

         3.16     UPS TECHNOLOGY - THE RAMP UP - THE INVESTMENT.

         The UPS/PLC product line incorporated new technology, sophisticated
control, numerous customer benefits and a large international market growing at
more than fifteen percent per year. The Debtors' acquisition of this product
line was complimentary to PDI's existing technology and provided numerous
avenues for cross selling of multiple products.


                                      -19-
<PAGE>

         Subsequent to the Penril acquisition, the Debtors discovered a number
of manufacturing and production problems related to the UPS/PLC product lines.
These problems became more severe as the Debtors began ramping up shipments in
early 1997. As a result of these problems, shipments were halted in early 1997.
The Debtors addressed each problem and shipments of the UPS/PLC products were
resumed in early April 1997.

         In late April of 1997, the Debtors obtained certain sophisticated
automatic test equipment to allow the manufacture of higher volumes of the
UPS/PLC products. As this equipment came on line in the summer of 1997, a
number of additional problems were discovered. The Debtors stopped shipments
of its products again and devoted substantial energy and resources to solving
these reliability problems. To correct these problems, significant operating
funds were expended over the course of calendar year 1997. In order to
finance these operating expenditures, the Debtors' senior lender, Inverness,
increased its revolving credit facilities with the Debtors and the maximum
aggregate availability under its various revolving credit facility was
increased ultimately to $8,000,000. As of the Petition, Inverness was owed
$7,259,019(2) in aggregate from the Debtors.

--------
(2) This amount excludes the Inverness Leases ($138,726.23).


                                      -20-
<PAGE>

         3.17     OPERATIONS OF PDI AND PDIXF COMBINED.

         The Debtors were unable to raise additional funds during the late
Summer and Fall of 1997 and were, thereby, forced to make a number of reductions
in personnel and expense in multiple rounds in May, August, November and
December of 1997. The Debtors' employee base decreased from a high of 69 in
April of 1997 to approximately 30 by mid-December of 1997.

         3.18     SHUT DOWN OF OPERATION.

         During the last two weeks of December 1997, the Debtor's employees were
furloughed for the holidays. Debtors were unable to obtain financing to continue
operations at the expiration of the holiday furlough (approximately January 5,
1998). The Debtors decided to extend the furlough while the Debtors arranged for
the filing of their respective Chapter 11 cases. On January 22, 1998 the Debtors
filed for protection under Chapter 11. Upon commencement of the bankruptcy cases
by the Debtors, certain employees returned to work and the Debtors recommenced
operations.

4.       THE BANKRUPTCY CASES

         4.1      OPERATIONS POST-PETITION.

         The Debtors reopened their doors upon the filing of the Chapter 11
cases. Although the Debtors had been closed for nearly three weeks, core product
customers were extremely


                                      -21-
<PAGE>

pleased that the Debtors had not closed permanently. Post-petition Debtors have
focused substantially all of their efforts in meeting core product demand
(non-UPS product). The Debtors have hired back all key personnel required to
service and ship core products, in total consisting of about 25 persons.

         Although initial costs associated with the Chapter 11 bankruptcy were
substantial, the Debtors posted a cash profit for February through December,
1998 and for January through September, 1999. Further, the Debtors have
initiated a program to re-establish a strong relationship with its core product
customers through customer surveys, on site visits, responsive shipments and
strong customer communications.

         During the period from January 22, 1998 through April 1998, the
Debtors received new orders for core products of approximately $790,000 and
shipped in excess of $794,000 in goods. For the period from May, 1998 through
December, 1998, the Debtors received new orders for core products of
approximately $1,926,297 and shipped approximately $2,080,071 in goods. For
the period from January, 1999 through June, 1999. the Debtors received new
orders for core products of approximately $1,470,280 and shipped
approximately $1,284,722 in goods. For the period from July 1999 through
September, 1999 orders were approximately $1,091,440 and shipments exceeded
$823,611.

                                      -22-
<PAGE>

The UPS/PLC technology is being maintained, at a subsistence level. The Company
is not taking any orders for the UPS/PLC products, is not shipping any UPS/PLC
products, and is evaluating various options to realize value from the UPS/PLC
products and technology.

5.       FINANCIAL ANALYSIS AND LIQUIDATION ANALYSIS

         5.1      FINANCIAL ANALYSIS.

         CORE BUSINESS. The Debtors have a solid, high margin base business in
various power supply segments. Each of these, albeit directed at somewhat
different applications, comprise technology and knowledge which is similar.
These core product lines include:

         LINEAR POWER SUPPLIES - Regulated linear DC power supplies are PDI's
original product line. There are two general classes of these products. The
first consists of supplies sold to universities, government and commercial
research facilities primarily comprising multiple output bench top products. The
second includes a host of specialized base products which can be adapted and
customized to provide OEM customers with solutions to their needs.

         PDI's standard catalog product line includes all of the following:

<TABLE>
<CAPTION>
         ------------------------- --------------------------------- ---------------------------------------
<S>                                <C>                               <C>
                  AC to DC                  Switchers                *        Linears
         ------------------------- --------------------------------- ---------------------------------------
                  DC to DC                  UL/CSA approval                   Single/Multiple Output
         ------------------------- --------------------------------- ---------------------------------------
                  High/Lo
         ------------------------- --------------------------------- ---------------------------------------
</TABLE>


                                      -23-
<PAGE>

<TABLE>
<S>                                <C>                               <C>
         ------------------------- --------------------------------- ---------------------------------------
                   Voltage                  High Stability                          Low Noise

         ------------------------- --------------------------------- ---------------------------------------
</TABLE>

         PDI also markets an innovative approach to linear technology. This
feature, called UNIPLY, is a patented wide range constant power source
technology. UNIPLY provides higher current at low voltages and higher voltage at
low currents, eliminating the need for a multitude of power supplies.

         These products carry relatively high gross margins, in the 55% range,
with the cost of materials as low as 20% on selected products. The line is
mature and is generally considered a cash generator for PDI.

         VARIAC AUTO TRANSFORMER - The VARIAC Autotransformer line, part of the
acquired assets, produces wire wound transformers, in the two (2) to fifty (50)
ampere range, with continuously variable output voltage control. The name
"VARIAC" is well known in the industry and has become, in the autotransformer
world, what Kleenex is to tissue paper. No other autotransformer has a similar
name recognition or reputation for reliability.

         VARIAC'S product design has been proven worldwide as a superior voltage
regulator for control of motor speeds, heat output, light intensity and other
variable power needs. These products have been sold through a relatively
neglected stocking distributor network to government related sub-contractors and
US OEMs. PDIXF has no representation overseas.


                                      -24-
<PAGE>

         The line has lower margins and a relatively high material cost, in the
50% range. The trade name, however, is of major value in the marketplace.

         COTS/MILITARY POWER SUPPLY - This line consists of Mil-Qualified AC-DC
and DC-DC, switching and linear power supplies in capacities from 5 to 450
watts. Applications range from ground base test equipment, to main frame
computers, to battery charging duty on the space shuttle. Programmable AC-DC
power supplies and sine wave inverters are also part of the line. The line is
known for its durability and ruggedness. Most of the currently active products
consist of high-margin, military replacement applications, as opposed to new
programs which require substantial new investment.

         Over the course of the last four (4) years, there has been little or no
investment in this product area, resulting in a diminishing presence in the
marketplace. A major part of the Debtor's strategy involves creating products
for this market with are COTS, i.e. commercial off-the-shelf. More and more of
the previously specialized and overly engineered products which the military
purchased are now being moved into the COTS arena, thereby making the product
less specialized and more marketable into a variety of applications.

         5.2      MARKET POSITION/COMPETITION.

         LINEAR POWER SUPPLIES - PDI expects the market for its catalog line and
OEM power supply products to grow over the next few years primarily as a result
of an increased


                                      -25-
<PAGE>

marketing and sales effort, and to a lesser degree because of the improving
economic climate. The general market for bench top products is estimated
domestically at $100 million per year, while the OEM market for the traditional
Power Designs technology is somewhat less than $500 million. Although neither of
these are high growth markets, their maturity, in conjunction with their
relatively small size, allows for high margins. With a host of smaller
competitors, there are no behemoths attempting to penetrate this segment.

         It is anticipated that sales will increase to $1.0 million per year
over the next twelve months and then grow 15% to 20% per year, with demand
primarily coming from the commercial and industrial OEM areas.

         The linear power supply business competes with numerous companies,
including Kepco, Hewlett Packard, Bertran and Fluke. Power Design's long history
has allowed it to nurture a very loyal mature customer base. Since the market
for these products is well established and diversified, direct competition at
current sales levels is limited. The active customer base often contacts PDI
first for customer power product needs.

         VARIAC AUTO TRANSFORMER - The Autotransformer line has a well known
trademark name along with an established core of long term customers. This
market segment is very mature, and consequently, does not provide significant
growth potential with the existing product base. It is estimated that the
domestic market for VARIAC type products is approximately $50 million


                                      -26-
<PAGE>

per year. The essence of the value in this line is closely related to the trade
name VARIAC. Penril's failure to invest resources in the line has been a major
contributor to its decrease in sales volume over the years. The Debtors believe
that the trade name will be a benefit not only in enhancing sales of the
autotransformer line, but also in marketing other products.

         The VARIAC products operate in a relatively competitive commercial
market but have an established reputation which tends to pull product through
the channel. Since nearly all of these products are sold through distribution,
trade name awareness is very critical to sales growth. The Company intends to
substantially improve distributor and end user awareness as part of its overall
marketing campaign.

         COTS/MILITARY POWER SUPPLY - The market for the ruggedized mil-spec
products has fallen with changes in military spending priorities. Although there
is a general perception in the US that nearly all programs have been reduced,
the reality is that major retrofit and upgrade programs are not seeing
significant reductions. Rather, there is a dearth of requirements for totally
new designs. Consequently, these products, which have a rich history in many of
the military's existing platforms, are in demand.

         Taking these products from specialized assemblies to more commercial
specifications also provides enhanced opportunities for sales. This is the
essence of COTS. As the military


                                      -27-
<PAGE>

moves more toward using readily available offerings in its applications, the
Debtors are able to use similar products in multiple market segments.

         The volume of this niche is not readily definable, but is estimated to
be several hundred million dollars per year.

         The thirty-seven (37) year history of this line encompasses literally
thousands of proprietary designs for which there are no satisfactory
alternatives. The military has a continual need to buy additional older systems
because of the significant reduction in military spending which occurred in the
late 1980s and the constant need for repair and spare units. This segment has
been a substantial cash generator with high margins, minimal additional
engineering and design requirements, and captive market position.

         There are new opportunities for similarly rugged designs in both the
military and the commercial environment, where adverse environmental conditions
are a problem. The Company, having competed effectively in this arena in the
past, will begin a targeted approach to capture more new business in both the
military and commercial side, with an emphasis on COTS types of products, i.e.
products which are more generally considered commercial but which meet a higher
design specification criteria.

         5.3      UPS/PLC. The Debtors have continued to maintain the UPS
technology. The Debtors are currently exploring various alternatives with
respect to the UPS technology


                                      -28-
<PAGE>

including possible joint ventures with third parties for the manufacture and
sale of the UPS products.

         5.4      LIQUIDATION ANALYSIS.

         The Plan cannot be confirmed unless it is in the "best interest" of
creditors and Equity Interest holders. The "best interest" test is satisfied if
the Plan provides to each dissenting or non-voting member of each impaired class
a recovery no less than the recovery such member would receive if the Debtors
were liquidated in a hypothetical Chapter 7 liquidation case.

         The Debtors have estimated the amounts that would be paid to holders of
Allowed Claims in a hypothetical Chapter 7 liquidation. The liquidation analysis
in EXHIBIT C estimates values which may be available to holders of Claims if the
Debtors' assets were sold in a hypothetical Chapter 7 liquidation. In
liquidation, no creditor or equity interest holder will receive any money except
Inverness.

6.       SUBSTANTIVE CONSOLIDATION/MERGER

         The Debtors believe that the combination of PDI and PDIXF provides more
overall value to the Creditors than each of the Debtors could provide as
stand-alone entities. The shared economies of sale cannot be overlooked. PDI is
responsible for approximately fifteen percent (15%) of total contribution to the
combined operation. If PDI were considered a stand-alone entity, it would have
to incur significant fixed costs and overhead to maintain its


                                      -29-
<PAGE>

business. Combining the two debtors into PDI, the public company is also
important because, as a public company, the Reorganized PDI Common Stock should
trade at higher multiples than PDIXF's non-public stock.

7.       DESIGNATION OF CLASSES OF CLAIMS AND EQUITY INTERESTS

         All Claims against and Equity Interests in the Debtors, of whatever
nature, whether or not scheduled, liquidated or unliquidated, absolute or
contingent, including all Claims arising from transactions with either of the
Debtors and all Equity Interests arising from the ownership of the stock of
either of the Debtors, whether resulting in an Allowed Claim or not, shall be
bound by the provisions of this Plan. The Claims and Equity Interests are
classified as follows:

         CLASS 1.  The Allowed Secured Claims of Inverness.

         CLASS 1A.  Allowed Secured Claim of Inverness against PDI.
         CLASS 1B.  Allowed Secured Claim of Inverness against PDIXF.

         CLASS 2.  The Allowed Claim of Hayes.

         CLASS 2A.  The Allowed Claim of Hayes against PDI.
         CLASS 2B.  The Allowed Claim of Hayes against PDIXF.

         CLASS 3.  Allowed Employee Priority Claims.

         CLASS 4.  Allowed Unsecured Claims.

         CLASS 4A.  Allowed Unsecured Claims against PDI.


                                      -30-
<PAGE>

         CLASS 4B.  Allowed Unsecured Claims against PDIXF.
         CLASS 5.  Allowed Equity Interests in PDI.

         CLASS 6.  Allowed Equity Interest in PDIXF.

8.       IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS

         8.1 IMPAIRED CLASSES OF CLAIMS . All Classes of Claims are impaired
under the Plan.

         8.2      IMPAIRED CLASSES OF EQUITY INTERESTS.  All Classes of Equity
Interests are impaired under the Plan.

         8.3 IMPAIRMENT CONTROVERSIES. If a controversy arises as to whether any
Claim or Equity Interest, or any Class of Claims or of Equity Interests, are
impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing,
determine such controversies.

         8.4. SPECIAL NOTE CONCERNING VOTING ON PLAN. If the Consolidation
Motion is granted prior to Confirmation, voting on the Plan will be conducted by
combining the subclasses within each class. For example, Class 1A and Class 1B
will be considered a single Class: Class 1. On the other hand, if the
Consolidation Motion is not granted prior to Confirmation, each subclass will be
considered a separate class for voting purposes. For example, Class 4A and Class
4B will be considered separate and distinct classes for voting purposes.


                                      -31-
<PAGE>

9.       TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN

         9.1      CLASS 1 (INCLUDING CLASS 1A AND CLASS 1B). Inverness has made
substantial concessions in order to facilitate the reorganization effected by
the Plan. On the Effective Date, Inverness shall receive in satisfaction of its
Allowed Secured Claims, the following:

         (a)  Inverness Secured Note; and

         (b) that number of shares of Reorganized PDI Common Stock equal to
2,000,000 x .499 (the "Inverness Percentage").

         The Inverness Secured Note shall be in the original principal amount of
$1,800,000 and provide for monthly payments of interest only, payable in arrears
at the rate of ten percent (10%) per annum for each month during the term hereof
with the outstanding principal and interest due and payable in full on the
second anniversary of the Effective Date of the Plan. The Inverness Secured Note
shall be secured by a lien on all of the assets of Reorganized PDI senior to all
other liens except any lien granted to secure the Working Capital Note.

         9.2      CLASS 2 (INCLUDING CLASS 2A AND CLASS 2B). As a consequence of
undisclosed warrantee liabilities which the Debtors unknowingly assumed in the
acquisition of the UPS technology from Hayes in 1996, the Debtors have
substantial offsets to the unpaid purchase money financing which Hayes provided
as part of the acquisition. The Debtors believe that after


                                      -32-
<PAGE>

deducting those offsets, the Claim of Hayes would total $150,000. Confirmation
of the Plan shall irrevocably reduce the allowed amount of the Claim of Hayes to
$150,000

         On the Effective Date, Hayes shall receive in full satisfaction of its
Allowed Claims, the following:

         (a) the Hayes Unsecured Note in the principal amount of $150,000
payable in two (2) years at a fixed interest rate of ten percent (10%) per
annum, with the outstanding principal and interest due and payable in full on
the second anniversary of the Effective Date of the Plan; and

         (b) that number of shares of Reorganized PDI Common Stock to be
determined by the inclusion of Hayes in Class 4A, with an imputed Allowed
Unsecured Claim in said class of $150,000 (done solely for purposes of
determining the number of shares). Notwithstanding the foregoing, Hayes shall
not retain an Allowed Unsecured Claim for any other purposes, including without
limitation, the annual conditional payment to be paid to holders of Allowed
Unsecured Claims in Class 4A.

         The Hayes Unsecured Note shall be subordinate to the Working Capital
Note and Inverness Secured Note.

         9.3      CLASS 3. Holders of Allowed Employee Priority Claims shall
receive the full amount of their Allowed Employee Priority Claims in eight (8)
equal monthly payments, together with interest at the rate of seven percent (7%)
per annum. As of the Petition Date,


                                      -33-
<PAGE>

Employee Priority Claims (including related taxes) were approximately $109,554.
A portion of this amount has been paid pursuant to an order of the Bankruptcy
Court. Currently, there is approximately $20,664 owed to the holders of Allowed
Employee Priority Claims.

         9.4      CLASS 4A. Subject to Section 10.2 of the Plan, on the
Effective Date, the holders of Allowed Unsecured Claims in Class 4A shall
receive their Pro Rata Share of that number of Reorganized PDI Common Stock
equal to 50.1% of 2,000,000 shares. There will be 1,002,000 shares distributed
pro rata to the holders of Allowed Unsecured Claims.

         In addition to the foregoing, except with respect to Hayes, holders of
Allowed Claims in Class 4A shall also be entitled to an annual conditional
payment equal to 10% of one-half of the face amount of their Allowed Claims,
payable (without interest) only to the extent that Reorganized PDI's free cash
flow (net income, plus depreciation, plus amortization, less capital expense,
less payments pursuant to the Plan) is greater than $400,000.00 in any fiscal
year unless there is a payment default on the Inverness Secured Note, in which
event the conditional payment may not be made until the default is cured. For
purposes hereof, "capital expenses" shall not be deemed to include the purchase
of any equipment that involves either lease or other purchase financing for
which the Company's cash flow is only reduced by future monthly payments. If
Reorganized PDI's free cash flow, as set forth above, in excess of $400,000.00
in any fiscal year, is insufficient to make the conditional payment, then such
conditional payment


                                      -34-
<PAGE>

shall be accrued. No conditional payment or accrual, however, shall occur within
six (6) months after the Effective Date of the Plan, nor shall a conditional
payment ever be accrued which exceeds twenty percent (20%) of one-half of the
face amount of such Allowed Claims. To the extent that the accrued conditional
payment would exceed twenty percent (20%) of one-half of the face amount of such
Allowed Claims, entitlement to such amount in excess of twenty percent (20%) of
one-half of the face amount of such Allowed Claim shall be permanently waived.
The terms and conditions of the conditional payment and its termination events
are more fully set forth on Exhibit 6.4A of the Plan ("Conditional Distribution
Agreement").

         9.5      CLASS 4B. Subject to Section 10.2 of the Plan, on the
Effective Date the holders of Allowed Claims in Class 4B shall receive a
one-time payment of five percent (5%) of the amount of their Allowed Claims in
complete and full satisfaction of their Claims.

         9.6      CLASS 5. All Equity Interests in Power Design, Inc. shall be
deemed canceled as of the Effective Date and holders of such Equity Interests
shall not receive any distribution on account of such Equity Interests.

         9.7      CLASS 6. All Equity Interests in PDIXF Acquisition Corporation
shall be deemed canceled as of the Effective Date and holders of such Equity
Interests shall not receive any distribution on account of such Equity
Interests.


                                      -35-
<PAGE>

         9.8      The Reorganized PDI reserves the right, through and including
one hundred (120) days after the Effective Date, to review and if it deems
appropriate, to object, contest or otherwise challenge any Claim against PDI
and/or PDIXF, including whether such Claim should properly be treated as a claim
of PDI and/or whether a PDIXF Claim should properly be treated as a Claim of
PDI.

         CREDITORS ARE ADVISED TO REVIEW THE PLAN IN ITS ENTIRETY FOR A DETAILED
DESCRIPTION OF THE PROPOSED TREATMENT OF THE VARIOUS CLASSES IN THE PLAN.
CREDITORS ARE FURTHER URGED TO CONSULT WITH THEIR RESPECTIVE LEGAL COUNSEL AND
OTHER PROFESSIONAL ADVISORS CONCERNING THE PLAN AND ANY TAX RAMIFICATIONS TO THE
CREDITORS AS A RESULT OF THE PLAN.

10.      ADMINISTRATIVE AND PRIORITY TAX CLAIMS

         The following section summarizes the treatment of administrative and
priority tax claims:

         (a.) ADMINISTRATIVE CLAIMS. Administrative Claims, which have not been
paid prior to the Effective Date shall be paid in full in Cash on the Effective
Date (or, if later, the date on which any such Administrative Claim is allowed
by a Final Order of the Bankruptcy Court), or upon such terms as otherwise
agreed between the Debtors or Reorganized PDI and the holder of such
Administrative Claim. Administrative Claims include claims of professionals
employed by order


                                      -36-
<PAGE>

of the Bankruptcy Court, certain post-petition employee claims and any unpaid
fees due under 28 U.S.C. section 1930. Professionals employed pursuant to
Sections 327 and 1102 of the Bankruptcy Code, and any other person who may be
entitled to reimbursement of expenses or allowance of fees pursuant to Sections
503(b)(2) through 503(b)(6) of the Code, shall file final applications for
allowance and payment of compensation and expenses not later than twenty (20)
days after the Effective Date. Each such professional or person shall be paid,
in Cash, the full amount awarded to such professional or person by the
Bankruptcy Court after notice and a hearing, within 10 days after the date on
which an Order allowing such claims, fees and/or disbursements becomes a Final
Order. All post petition payables and other ordinary course expenses will be
paid in the ordinary course of business as agreed between the Reorganized PDI
and the vendor.

         (B) POSTPETITION DIRECTOR LOANS. All postpetition financing of PDI
and/or PDIXF approved by the Court prior to confirmation shall be paid, in cash,
the full amount, including any accrued interest, on the Effective Date.

         (C) PRIORITY TAX CLAIMS. Allowed Priority Tax Claims shall be paid by
Reorganized PDI in its sole discretion in Cash and in full on the Effective Date
or in equal quarterly payments beginning on April 1, 2000 and continuing
thereafter for twenty (20) additional quarters (payments shall be made on
January 1, April 1, July 1 and October 1). The deferred payments on Allowed
Priority Tax Claims shall bear interest at a fixed rate of seven percent (7%)
per annum.


                                      -37-
<PAGE>

Currently there is approximately $15,946 owed to the holders of Allowed Priority
Tax Claims. Claims asserted by various taxing authorities for periods prior to
the First PDI Bankruptcy are not considered Allowed Priority Tax Claims but
shall be conclusively deemed Unsecured Claims and will be treated as Allowed
Unsecured Claims.

11.      MEANS FOR EXECUTION AND IMPLEMENTATION

         11.1     FUNDING OF PAYMENTS REQUIRED UNDER THE PLAN. The payments
required under the Plan will be made from Cash accumulated by Debtors from the
Petition Date to the Effective Date and the proceeds available under the Working
Capital Note.

12.      SECURITIES LAW CONSEQUENCES

         12.1     SECURITIES LAW CONSEQUENCES.

         The issuance of the Reorganized PDI Common Stock under the Plan raises
certain securities law issues under the Bankruptcy Code and Federal and State
securities laws, which are discussed in this section. This section should not be
considered applicable to all situations. Creditors should consult their own
securities advisors to discuss their particular facts and circumstances with
respect to the transfer of the Reorganized PDI Common Stock.

         12.2     INITIAL ISSUANCE OF REORGANIZED PDI COMMON STOCK.

         Section 1145 of the Code provides that the securities registration
and/or qualification requirements of federal and state securities laws do not
apply to the offer or sale of stock,


                                      -38-
<PAGE>

warrants or other securities by a debtor or its successor if the offer or sale
occurs under a plan of reorganization and the securities are transferred in
exchange (or principally in exchange) for a Claim against or Equity Interest in
the Debtors. Accordingly, the initial issuance of the Reorganized PDI Common
Stock will be exempt from the registration and/or qualification requirements of
federal and state law under Section 1145 of the Code.

         Reorganized PDI will succeed to PDI's reporting obligations under the
Exchange Act by virtue of its being a "successor issuer" (within the meaning of
SEC Rule 12(g)3 under the Exchange Act) with more than 300 shareholders of
record. Although Reorganized PDI remains registered under the Exchange Act by
virtue of the number of holders of Reorganized PDI Common Stock, and thereby
fulfills the "Current Public Information" requirements of SEC Rule 144(c), the
holders of Reorganized PDI Common Stock will nevertheless remain subject to the
restrictions on transfer set forth in the New Charter until and unless the New
Charter is amended to eliminate such restrictions.

         12.3     RESALE OF REORGANIZED PDI COMMON STOCK.

         Until and unless the New Charter is amended to provide otherwise, any
resale of the Reorganized PDI Common Stock will be subject to the restrictions
on transferability contained in the New Charter.


                                      -39-
<PAGE>

         Any person who is not an "underwriter" under Section 1145 of the
Bankruptcy Code or an "affiliate" under SEC Rule 144 and who resells Reorganized
PDI Common Stock need not comply with the registration requirements of the
Securities Act or seek an exemption therefrom, although such person remains
subject to the restrictions on transfer imposed by the New Charter until and
unless it is amended to provide otherwise. The term "underwriter", as used in
Section 1145, includes four categories of persons, which are referred to herein
as "controlling persons", "accumulators", "distributors" and "syndicators." The
treatment of the four types of underwriters, and the treatment of "dealers," are
discussed below:

         (a)      CONTROLLING PERSONS.

                  "CONTROLLING PERSONS" are persons who, after the Effective
Date, have the power, whether direct or indirect and whether formal or informal,
to control the management and policies of Reorganized PDI. Whether a person has
such power is a question of fact which depends on certain factors, including the
person's equity in Reorganized PDI relative to other equity holders, and whether
the person, acting alone or in concert with others, has a contractual or other
relationship giving that person power over management policies and decisions.

                  If any stockholder's ownership percentage of Reorganized PDI
Common Stock calculated in this manner is between one percent (1%) and ten
percent (10%), that stockholder may be deemed to be in a control relationship
with Reorganized PDI, depending upon the facts


                                      -40-
<PAGE>

and circumstances of its particular situation. Any such stockholder should seek
the advice of its own counsel before reselling any Reorganized PDI Common Stock.
To the best of the Debtors' knowledge, the only person who will hold greater
than ten percent (10%) of the Reorganized PDI Common Stock is Inverness, which
will hold approximately 49.9%. Controlling persons are permitted to resell or
otherwise dispose of Reorganized PDI Common Stock only by complying with the
registration requirements of the Securities Act and State "blue sky" laws or an
exemption therefrom.

         (b)      ACCUMULATORS AND DISTRIBUTORS

                  "ACCUMULATORS" are persons who purchase Claims against the
Debtors with a view to distribution of any Reorganized PDI Common Stock to be
received under the Plan in exchange for the Claim purchased by the Accumulator.
"DISTRIBUTORS" are persons who offer to sell Reorganized PDI Common Stock for
the holders of Reorganized PDI Common Stock. In prior bankruptcy cases, the SEC
staff has taken the position that resales by accumulators and distributors of
securities distributed under a plan are exempt from the registration
requirements of the Securities Act if made in "ordinary trading transactions."


                                      -41-
<PAGE>

         (c)      SYNDICATORS

                  "SYNDICATORS" are persons who offer to buy Reorganized PDI
Common Stock from the holders with a view to distribution, under an agreement
made in connection with the Plan, upon consummation of the Plan or with the
offer or sale of Reorganized PDI Common Stock under the Plan. The Debtors are
not aware of any arrangements for the resale of Reorganized PDI Common Stock
which would make any person a Syndicator.

         (d)      DEALERS

                  "DEALERS" are persons who engage either for all or part of
their time, directly or indirectly, as agents, brokers, or principals, in the
business of offering, buying, selling or otherwise dealing or trading in
securities. If the Reorganized PDI Common Stock becomes publicly traded after
the Effective Date, Section 4(3) of the Securities Act will exempt transactions
in the Reorganized PDI Common Stock by Dealers taking place more than 40 days
after the Effective Date.

         EACH RECIPIENT OF REORGANIZED PDI COMMON STOCK SHOULD SATISFY ITSELF
THROUGH CONSULTATION WITH ITS OWN LEGAL ADVISORS AS TO WHETHER OR NOT RESALES OR
OTHER TRANSACTIONS IN REORGANIZED PDI COMMON STOCK ARE LAWFUL UNDER FEDERAL AND
STATE SECURITIES LAWS.


                                      -42-
<PAGE>

         THE DEBTORS HAVE NOT SOUGHT A "NO-ACTION" LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION WITH RESPECT TO ANY
MATTER DISCUSSED HEREIN.

         THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THE STATEMENTS CONTAINED HEREIN.

         12.4     REPORTING; LISTING.

         After the Merger, Reorganized PDI will continue to be publicly traded
on NASDAQ Bulletin Board, and bid and ask price quotations with respect to sales
of the Reorganized PDI Common Stock in the public market will be available.
However, because of the restrictions on transferability found in the New
Charter, private sales of the Reorganized PDI Common Stock will also be
restricted.

         As long as the Reorganized PDI Common Stock is held of record by at
least 300 persons, Reorganized PDI will be required to register the Reorganized
PDI Common Stock under Section 12(g) of the Exchange Act and comply with the
reporting requirements of the Exchange Act. Under those requirements,
Reorganized PDI will file with the SEC annual reports on SEC Form 10-K,
quarterly reports on SEC Form 10-Q, current reports on SEC Form 8-K proxy
statements


                                      -43-
<PAGE>

conforming to SEC Schedule 14A, and various other reports required by applicable
laws and regulations.

         In addition, registration under the Exchange Act will mean that
Reorganized PDI will be required to meet the "Current Public Information"
requirements of SEC Rule 144(c), in order to make the exemption from
registration under SEC Rule 144 available to certain holders of Reorganized PDI
Common Stock who will be subject to restrictions on transfer imposed by the New
Charter.

13.      TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

         (a) GENERAL ASSUMPTION AND ASSIGNMENT. All executory contracts and
unexpired leases of PDI or PDIXF shall be assumed by Reorganized PDI upon entry
of the Confirmation Order unless specifically rejected by order entered on or
prior to the Confirmation Date or unless a motion to reject any such executory
contract or unexpired lease is pending before the Bankruptcy Court on the
Confirmation Date.

         (b) BAR TO REJECTION DAMAGES. If the rejection of an executory contract
or unexpired lease by either of the Debtors results in damages to the other
party or parties to such contract or lease, a Claim for such damages, if not
previously evidenced by a filed proof of Claim or barred by a Final Order, shall
be forever barred and shall not be enforceable against the Debtors or
Reorganized PDI, or their properties or agents, successors, or assigns, unless a
proof of Claim


                                      -44-
<PAGE>

relating thereto is filed with the Bankruptcy Court within thirty
(30) days after the later of (i) the entry of a Final Order authorizing such
rejection and (ii) the Confirmation Date, or within such shorter period as may
be ordered by the Bankruptcy Court.

         (c) CURE OF DEFAULTS FOR EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Each
executory contract and unexpired lease to be assumed pursuant to the Plan shall
be reinstated and rendered unimpaired in accordance with sections 1124(2) and
365(b)(1) of the Code. In connection therewith, Reorganized PDI obligated on
each such contract and lease to be assumed pursuant to the Plan shall cure or
provide adequate assurance that it will cure any monetary default (other than of
the kind specified in section 365(b)(2) of the Bankruptcy Code), by payment of
the default amount in Cash on the Effective Date or on such other terms as the
parties to such executory contract or unexpired lease may otherwise agree,
compensate, or provide adequate assurance that the Reorganized PDI will promptly
compensate, parties to such contract or lease for any actual pecuniary loss to
such parties resulting from such default and provide adequate assurance of
future performance under such contract or lease. In the event of a dispute
regarding: (i) the amount of any cure payments, (ii) the ability of Reorganized
PDI or any of its assignees to provide "adequate assurance of future
performance" (within the meaning of section 365 of the Bankruptcy Code) under
the contract or lease to be assumed, or (iii) any other matter pertaining to
assumption, the cure payments or performance required by section 365(b)(1) of
the


                                      -45-
<PAGE>

Bankruptcy Code shall be made following the entry of a Final Order resolving the
dispute and approving the assumption.

14.      FEDERAL TAX CONSEQUENCES

         14.1     INTRODUCTION. The following discussion is a summary of certain
of the more significant Federal Income tax consequences of the Plan to the
Debtors and holders of Claims and Equity Interests. This discussion does not
address the particular Federal Income Tax consequences that may be relevant to
certain types of taxpayers subject to special treatment under the Federal Income
Tax laws (such as Life Insurance companies, tax-exempt organizations and
taxpayers who are not citizens or residents of the United States), nor does it
discuss any aspect of state, local, foreign or other tax laws that may be
applicable to particular taxpayers. The tax consequences to holders of Claims
and Equity Interests may vary based on the individual circumstances of each
holder. Moreover, the tax consequences of certain aspects of the Plan are
uncertain due to the lack of applicable legal precedent and the possibility of
changes in the law. No ruling has been sought or obtained from the Internal
Revenue Service with respect to any of the tax aspects of the Plan, and no
opinion of counsel has been requested or obtained by the proponents with respect
to any such aspects. There can be no assurance that the Internal Revenue Service
will not challenge any or all of the tax consequences of the Plan, or that such
a challenge, if asserted, would not be sustained. Accordingly, each holder of a
Claim or Equity


                                      -46-
<PAGE>

Interest treated by the Plan is strongly urged to consult with its own tax
advisor regarding the federal, state and local tax consequences of the Plan.

         14.2.    TAX CONSEQUENCES TO THE DEBTOR.

         (a) CURRENT TAX ATTRIBUTES. The Debtors have substantial net operating
loss carryovers ("NOLS") which may, in whole or part, be available to offset
future income of Reorganized PDI. Other tax attributes of the Debtors which may
exist, such as capital/loss carryovers and tax credit carryovers, are not
material. The Plan contemplates that those tax attributes including NOLs, to the
extent that they exist, will be preserved in Reorganized PDI.

                  The Debtors estimate that, as of September 30, 1999, the NOLs
reportable on its federal income tax return (before giving effect to the Plan
and any transactions contemplated thereby) should aggregate approximately
$12,870,000.

                  Although the Debtors believe these estimates to be accurate,
the amounts may be subject to review and disallowance upon audit by the IRS.

         (b) DISCHARGE OF INDEBTEDNESS. Under the Tax Code, a taxpayer must
generally include in gross income the amount of any discharged indebtedness
realized during the taxable year, except to the extent that the payment of such
indebtedness would have given rise to a deduction. However, Tax Code Section 108
provides that, in a case under Chapter 11 of the Bankruptcy Code, where the
discharge of indebtedness is granted by the Bankruptcy Court or


                                      -47-
<PAGE>


pursuant to a plan approved by the Court, the amount of discharged indebtedness
which would otherwise have been required to be included in the taxpayer's income
will be applied instead to reduce certain tax attributes of the taxpayer, in the
following order: NOLs; general business credit carryovers; capital loss
carryovers; the basis of the taxpayer in depreciable property; and foreign tax
credit carryovers. The satisfaction of Allowed Claims in Class 4A (Allowed
Unsecured Claims against PDI) in exchange for the right to receive shares of
Reorganized PDI will not result in discharge of indebtedness income but
Reorganized PDI will be required to reduce its tax attributes by the difference
between the amount of total claims in Class 4 less the fair market value of the
Reorganized PDI Common Stock being exchanged with the holders of Allowed Class
4A Claims.

         (c)      UTILIZATION OF TAX ATTRIBUTES.

                  (i) TAX CODE SECTION 382. Section 382 of the Internal Revenue
Code of 1986, as amended (Title 26, United States Code) ("TAX CODE"),
establishes rules governing the availability of a corporation's NOLs after
significant changes in the ownership of the corporation's stock. Tax Code
Section 382 provides that following an ownership change (defined below) in a
corporation having NOLs (a "LOSS CORPORATION"), the amount of the loss
corporation's annual taxable income that may be offset by its NOLs cannot exceed
an amount equal to the value of the loss corporation immediately before the
ownership change multiplied by


                                      -48-
<PAGE>


the long-term tax-exempt rate, which is published monthly by the IRS. Because
NOLs expire if not utilized within fifteen (15) years, such an annual limitation
could have the effect of eliminating a significant portion of a loss
corporation's NOL.

                  An "ownership change" within the meaning of Tax Code Section
382 ("OWNERSHIP CHANGE") occurs when the percentage of outstanding stock
(determined on the basis of value) owned by one or more holders of at least five
percent (5%) of such stock has increased by more than 50 percentage points from
the lowest percentage of stock that was owned by such 5% shareholders at any
time during the applicable "testing period." The testing period ordinarily is
the three-year period which immediately precedes the date of testing. A person
may be a 5% shareholder either directly through ownership of stock or other
interest in a loss corporation or individually through ownership of stock or
interests in other entities. In general, all shareholders holding less than 5%
of the value of the loss corporation's stock are treated in the aggregate as a
single 5% shareholder.

         An Ownership Change can occur as a result of, among other things, the
purchase or sale of stock or options by a 5% shareholder, the issuance of stock
or options (whether or not any particular shareholder holds 5% of the value of
the loss corporation), or the redemption of stock or options by the loss
corporation. For the purpose of determining whether an Ownership Change has
occurred, options and instruments or rights that are similar to options, such as


                                      -49-
<PAGE>


warrants and contingent rights to acquire stock, are deemed to have been
exercised if such exercise would result in an Ownership Change.

                  Section 382 provides that, following an ownership change with
respect to a "loss corporation" such as the Company, unless the Bankruptcy
Exception (described below) applies, the amount of post-ownership change annual
taxable income of the loss corporation that can be offset by the loss
corporation's pre-ownership change NOL carryovers generally cannot exceed an
amount equal to the value of the equity of the loss corporation immediately
after the ownership change (subject to various adjustments) multiplied by a
prescribed long-term tax exempt rate (the "Annual Limitation").

                  An exception (the "Bankruptcy Exception") to the general rules
imposing a limitation on the ability to utilize losses after an ownership change
is set forth in Section 382(1)(5) of the Tax Code. The Bankruptcy Exception
applies if, immediately after an ownership change, shareholders and qualified
creditors of the old loss corporation (E.G., the Company) own at least 50% of
the stock of the new loss corporation (E.G., the Company post-Restructuring).
Qualified creditors include creditors who held their claim at least 18 months
before the filing of the chapter 11 case (or, if claims are held by the public,
certain public creditors), ordinary course of business trade creditors and
creditors who provided working capital financing.


                                      -50-
<PAGE>


                  If the Bankruptcy Exception applies (and no election is made
by the loss corporation for such exception not to apply), the amount of
pre-change NOL carryovers of the old loss corporation that may be carried to a
post-change year are required to be reduced by the amount of the deductions for
interest (including OID) paid or accrued on the indebtedness which was converted
into stock pursuant to the chapter 11 case during (i) any taxable year ending
during the three-year period preceding the taxable year in which the ownership
change occurs or (ii) the portion of the taxable year ending on the change date,
but only to the extent that such deductions generated an NOL for such year or
other period. Moreover, if the Bankruptcy Exception applies (and no election is
made for such exception not to apply), and a second ownership change occurs
within a two-year period, the Annual Limitation following the second ownership
change will be zero.

                  Based on its analysis of the transactions that will occur on
the Effective Date, the Debtors intend to take the position that the Bankruptcy
Exception will apply to the ownership change that the Debtors believe will occur
as a result of the Plan. Moreover, assuming the Bankruptcy Exception does apply,
the Company does not intend to elect for it not to apply. Accordingly, the
Company believes that it will have in excess of $5,500,000 in NOLs available
(after taking into account the reductions described above) not subject to an
Annual Limitation.


                                      -51-
<PAGE>


                  To minimize the risk that future trading or transfers of
shares of Reorganized PDI will result in an Ownership Change within the first
two years following, the Plan imposes certain restrictions on the
transferability of shares of Reorganized PDI Common Stock to be issued pursuant
to the Plan. Although these restrictions on transferability will reduce the risk
that an Ownership Change will occur for two years following the Effective Date,
there can be no assurance that such an Ownership Change will not occur. Even
with stock transfer restrictions in place, an Ownership Change could occur for
various reasons including, among other things, changes in the ownership of stock
(or other direct or indirect ownership interests) of entities which are holders
of Reorganized PDI Common Stock.

                  (ii) TAX CODE SECTION 269. Notwithstanding a loss
corporation's compliance with the rules described above, the IRS is authorized
under Tax Code Section 269 to disallow any deduction, credit or other allowance
(such as the use of NOLs) if control of a corporation was acquired principally
for tax avoidance purposes. Under Tax Code Section 269, "CONTROL" is regarded as
the ownership of stock possessing at least 50% of the total combined voting
power or value of all classes of outstanding stock of the corporation.

                  The existence of a principal tax avoidance motive by persons
acquiring control of a corporation is primarily a question of fact. Moreover,
Tax Code Section 269 gives the IRS considerable power to challenge transactions
involving NOLs. The Plan, however, does not


                                      -52-
<PAGE>


contemplate or provide for the acquisition by a person or entity of "control" of
Reorganized PDI (within the meaning of Tax Code Section 269) as a result of the
confirmation of the Plan and the incorporation of Reorganized PDI.

                  Should a person or entity subsequently acquire control of
Reorganized PDI, there can be no assurance that the IRS will not later challenge
the utilization by Reorganized PDI of the NOLs preserved by the Plan on the
basis of Tax Code Section 269. There also is no guarantee that any such
challenge, if asserted, would not be sustained.

         (d) TAX CONSEQUENCES OF THE MERGER. For federal income tax purposes,
the Merger of PDIXF into PDI pursuant to the Plan will constitute a
"reorganization" within the meaning of Tax Code Section 368(a)(I)(F). As such,
no gain or loss will be recognized by PDIXF or Reorganized PDI. Further, the
Merger will not result in any limitation on the ability of Reorganized PDI to
carry forward any of its NOLs.

         14.3. TAX CONSEQUENCES TO CREDITORS. The tax consequences of the
confirmation and implementation of the Plan to any particular Creditor will
depend mainly on whether that Creditor's Claim constitutes a "security" for
federal income tax purposes (referred to as "TAX SECURITIES"). The determination
of whether a Claim constitutes a Tax Security depends on the facts and
circumstances surrounding the origin and nature of the Claim and its maturity
date.


                                      -53-
<PAGE>


Generally, claims arising out of the extension of trade credit have been held
not to be Tax Securities. Instruments with terms of five years or less also
rarely qualify as Tax Securities.

         (a) CLAIMS CONSTITUTING TAX SECURITIES. Tax Code Section 354 generally
provides for the non-recognition of gain or loss by holders of Tax Securities of
a corporation who exchange their Tax Securities solely for new stock pursuant to
a tax-free reorganization. A Creditor would recognize gain, however, upon the
receipt of Reorganized PDI Common Stock and cash from the Creditor Trust, the
fair market value of which exceeds the tax basis of the Claim of such Creditor.
The amount of gain, IF ANY, that would be required to be recognized is the
lesser of (i) the excess, if any, of the cash and the fair market value of the
Reorganized PDI Common Stock received over the tax basis of the Creditor in its
Claim (other than any Claim in respect of accrued interest), or (ii) the amount
of such cash.

         (b) CLAIMS NOT CONSTITUTING TAX SECURITIES. A holder of a Claim that
does not constitute a Tax Security will recognize gain or loss upon the receipt
of Reorganized PDI Common Stock measured by the difference between the amount
realized and such holder's tax basis in the Claim. The amount realized will be
the aggregate fair market value of the Reorganized PDI Common Stock distributed
to such claimant (to the extent not allocable to interest).


                                      -54-
<PAGE>


         (c) RECEIPT OF INTEREST. A Creditor who, under its accounting method,
was not required to include in income interest attributable to its Claim that is
accrued but unpaid will be treated as having received ordinary interest income
to the extent the consideration received is allocable to such interest. This
treatment results whether or not the Creditor realizes an overall gain or loss
as a result of the exchange of its existing Claim. A Creditor who had previously
included in income accrued but unpaid interest attributable to its Claim will
recognize a loss (generally deductible in full against ordinary income) to the
extent such accrued but unpaid interest is not satisfied in full.

         For purposes of the above discussion, "accrued" interest means interest
which was accrued while the underlying Claim was held by the Creditor.


                                      -55-
<PAGE>


                  14.4 IMPORTANCE OF OBTAINING PROFESSIONAL TAX ASSISTANCE. The
preceding sections are intended only to be a summary and are not a substitute
for careful tax planning with a tax professional. The federal, state and local
tax consequences of the Plan are complex and, in some cases, uncertain. Such
consequences may also vary based upon the individual circumstances of each
holder of a Claim or Interest. Accordingly, each holder of a Claim or Interest
is strongly urged to consult with its own tax advisor regarding the federal,
state and local tax consequences of the Plan.

         15.      POST CONFIRMATION MANAGEMENT

                  15.1     BOARD OF DIRECTORS.  Under the terms of the Plan, the
Board of Directors of Reorganized PDI on the Effective Date will consist of
seven persons, selected or designed as follows:

                  (a) MANAGEMENT DESIGNEE. Initially, Melvin Becker Vice
         President of Operations until a Chief Executive Officer ("CEO") is
         retained by Reorganized PDI. Thereafter, the CEO shall be the
         Management Designee.

                  (b) INVERNESS DESIGNEES. Two (2) people designated by
         Inverness, in its sole discretion.

                  (c) NOTEHOLDERS' DESIGNEE. Shannon LeRoy.

                  (d) BRIDGE NOTEHOLDERS' DESIGNEES. Raymond E. Joslin and
         Robert Dorfman.


                                      -56-
<PAGE>


                  (e)      DIRECTOR LOANHOLDERS' DESIGNEE.  Robert Sparacino.

         The re-election or replacement of directors shall be in accordance with
the terms of that certain Shareholders Agreement attached as Exhibit 7.3 to the
Plan and automatically made effective upon the Effective Date of the Plan.

                  (f)      DIRECTORS OF REORGANIZED PDI

         The following is a brief summary of the five known initial directors of
Reorganized PDI.

The six and seventh directors will be selected by Inverness.

                  ROBERT R. SPARACINO. Mr. Sparacino was appointed as a Director
                  of the Company on October 7, 1997. Mr. Sparacino has served as
                  President of Sparacino Associates, a management and venture
                  capital consulting firm specializing in high technology
                  businesses since 1982, as a Director and Vice Chairman of
                  Tristar Corporation since 1992 and as a Director of Concurrent
                  Computer Corporation, a computer equipment manufacturer, from
                  November, 1994 to November, 1997. Additionally, Mr. Sparacino
                  has served in executive management positions with Xerox
                  Corporation and General Motors Corporation. Mr. Sparacino
                  holds a Doctoral Degree in Instrumentation from the
                  Massachusetts Institute of Technology. Mr. Sparacino holds
                  approximately two-thirds in amount of the Director Loan.

                  RAYMOND E. JOSLIN. Mr. Joslin was appointed as a Director of
                  the Company on October 7, 1997. Mr. Joslin currently serves as
                  a Director, and as Vice President and Group Head of the
                  Entertainment & Syndication Group of Hearst Corporation. Mr.
                  Joslin is also a Founding Director and Co-Chairman of
                  Hearst/ABC Video Services, and serves as a Founding Director
                  and Co-Chairman of each of the A&E Networks (which includes
                  the History Channel) and Lifetime Television, which are 75%
                  and 100% owned by Hearst/ABC Video Services, respectively. Mr.
                  Joslin attended the Carnegie Institute of Technology and
                  Harvard Business School and


                                      -57-
<PAGE>


                  holds a Bachelor's Degree in Economics from Trinity College.
                  Mr. Joslin directly or indirectly holds $200,000 of the
                  Subordinated Bridge Notes.

                  SHANNON LEROY. Mr. LeRoy was appointed as a Director of the
                  Company on October 7, 1997. Mr. LeRoy currently serves are
                  President of Tennessee Business Investment, Inc., the general
                  partner of Equitas, L.P., a licensed Small Business Investment
                  Company. From 1984 to 1994, Mr. LeRoy served as Senior Vice
                  President of First Union National Bank of Tennessee, where he
                  managed commercial banking. Mr. LeRoy is a Director of HLM
                  Design, Inc., an architectural and engineering firm, and Laure
                  Beverage Company, Inc., a consumer beverage company. Mr. LeRoy
                  holds a Bachelor of Arts degree from the University of North
                  Carolina in Chapel Hill. Equitas, L.P. holds approximately
                  $700,000 of the Subordinated Notes.

                  MELVIN BECKER. Mr. Becker has served as a Vice President of
                  the Company since November, 1996. Mr. Becker has served as a
                  Director of the Company since 1984, and served as President
                  from January, 1984 to November, 1996, and as Vice President in
                  charge of Manufacturing of the issuer from 1971 to 1979. Mr.
                  Becker served as Vice President of Operations and as Executive
                  Assistant to the President at Ferranti-Venus, a manufacturer
                  of DC Power Supplies from March, 1979 to December, 1983. Mr.
                  Becker holds a Bachelor's Degree in Electrical Engineering
                  from the University of Miami.

                  ROBERT S. DORFMAN. Mr. Dorfman will become a Director upon the
                  confirmation of the Company's bankruptcy case. He founder,
                  owner and President of The Robert S. Dorfman Company which
                  specializes in arranging financing for corporate clients, and
                  also acts as a Manager of Crescent Capital. He is also the
                  principal and President of Dorfman Securities, a registered
                  NASD broker-dealer. Mr. Dorfman was formerly Managing Director
                  -Business Development for Advest, Inc., a regional investment
                  bank and brokerage firm and also held positions as Vice
                  President of Corporate Finance at Berg & Co., and as a Banking
                  Officer at National Westminster Bank, USA. Mr. Dorfman holds a
                  Bachelor of Arts degree from Tufts University and a Master of
                  Business Administration


                                      -58-
<PAGE>


                  degree from Boston University. Crescent Capital hold $50,000
                  of the Bridge Notes.

         15.2 EXECUTIVE OFFICERS. The officers of Reorganized PDI will be
appointed by the Board of Directors on or after the Effective Date. As provided
by the Amended By-Laws, such officers will include, among others, a president
and chief executive officer, a chief financial officer, and a secretary. To
date, none of the officers has been selected. Anthony Intino serving as Chief
Financial Officer and General Manager and Melvin Becker as Vice President of
Operation and Secretary shall continue to serve as the senior management of
Reorganized PDI until such time as the Board retains a permanent Chief Executive
or Operating Officer and a Chief Financial Officer.

16.      POTENTIAL BANKRUPTCY CAUSES OF ACTION

         The Debtors are unaware of any significant bankruptcy causes of
actions, including preferences, or fraudulent conveyances, which would provide
additional proceeds for distribution to Creditors.



                                      -59-
<PAGE>


17.      VOTING PROCEDURES AND REQUIREMENTS

         17.1 BALLOTS AND VOTING DEADLINES - A ballot to be used for voting
whether to accept or reject the Plan is enclosed with a copy of this Disclosure
Statement and has been mailed to Creditors entitled to vote. BEFORE COMPLETING
YOUR BALLOT, PLEASE READ CAREFULLY THE INSTRUCTION SHEET THAT ACCOMPANIES THE
BALLOT.

         The Bankruptcy Court has directed that, in order to be counted for
voting purposes, ballots for the acceptance or rejection of the Plan must be
RECEIVED by the Debtors' counsel, Zeisler & Zeisler, P.C., 558 Clinton Avenue,
Bridgeport, Connecticut 06605, Attention: James Berman, Esq., by no later than
5:00 p.m. on the date fixed by the Bankruptcy Court. General questions regarding
the ballot may be referred to Attorney James Berman, Zeisler & Zeisler, P.C.,
558 Clinton Avenue, Bridgeport, Connecticut 06605; (203)368-4234.

         17.2     PARTIES-IN-INTEREST ENTITLED TO VOTE - All creditors holding
Allowed Claims are entitled to vote. Persons holding Allowed Equity Interests in
Class 5 are deemed to have rejected the Plan because the Plan provides for no
distributions to such holders.



                                      -60-
<PAGE>


         17.3 VOTE REQUIRED FOR CLASS ACCEPTANCE - The Code defines acceptance
of a plan by class of claims as acceptance by holders of at least two-thirds in
dollar amount, and more than one-half in number, of the claims of that class
which actually casts ballots for acceptance or rejection of the Plan. Thus,
class acceptance takes place only if at least two-thirds in amount and a
majority in number of the holders of claims voting cast their ballots in favor
of acceptance.

         17.4 SPECIAL NOTE CONCERNING VOTING ON PLAN. If the Consolidation
Motion is granted prior to Confirmation, voting on the Plan will be conducted by
combining the subclasses within each class. For example, Class 1A and Class 1B
will be considered a single Class: Class 1. On the other hand, if the
Consolidation Motion is not granted prior to Confirmation, each subclass will be
considered a separate class for voting purposes. For example, Class 4A and Class
4B will be considered separate and distinct classes for voting purposes.

         18. CONFIRMATION OF THE PLAN

         Under the Code, the following steps must be taken to confirm the Plan:

         18.1 CONFIRMATION HEARING - Section 1128(a) of the Code requires the
Bankruptcy Court, after notice, to hold a hearing on Confirmation of the Plan.
By order of the Bankruptcy Court the confirmation hearing has been scheduled for
the date listed in the order approving this Disclosure Statement, at the U.S.
Courthouse, 915 Lafayette Boulevard, Bridgeport, Connecticut (the "Confirmation
Hearing"). The Confirmation Hearing may be adjourned from time to time by the
Bankruptcy Court without further notice except for an announcement made at the
Confirmation Hearing or any adjournment thereof.



<PAGE>


         Section 1128 (b) of the Code provides that any party-in-interest may
object to confirmation of a plan. ANY OBJECTION TO CONFIRMATION OF THE PLAN MUST
BE MADE IN WRITING AND FILED WITH THE BANKRUPTCY COURT AND SERVED UPON DEBTORS'
COUNSEL, JAMES BERMAN, ESQ., ZEISLER & ZEISLER, P.C. 558 CLINTON AVENUE,
BRIDGEPORT, CONNECTICUT 06605; INVERNESS' COUNSEL, MARK I. FISHMAN, ESQ., PEPE &
HAZARD LLP, 30 JELLIFF LANE, SOUTHPORT, CONNECTICUT 06490; PDI CREDITOR'S
COMMITTEE COUNSEL, ROBERT U. SATTIN, ESQ., REID AND RIEGE, P.C., ONE STATE
STREET, HARTFORD, CONNECTICUT 06103; AND PDIXF CREDITOR'S COMMITTEE COUNSEL,
BRIAN COURTNEY, ESQ., BROWN RUDNICK FREED & GESMER, 185 AYLUM STREET, HARTFORD,
CONNECTICUT 06103, NO LATER THAN THE DATE LISTED IN THE ORDER APPROVING THIS
DISCLOSURE STATEMENT. Objections to Confirmation of the Plan are governed by
Rule 9014 F.R. Bankr.P.. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED
AND FILED, IT WILL NOT BE CONSIDERED BY THE BANKRUPTCY COURT.

         18.2 REQUIREMENTS FOR CONFIRMATION OF THE PLAN - At the Confirmation
Hearing, the Bankruptcy Court must determine whether the Code's requirements for
confirmation of the Plan have been satisfied, in which event the Bankruptcy
Court shall enter an order confirming the Plan. As set forth in section 1129 of
the Code, these requirements are as follows:

                  (a)      The plan complies with the applicable provisions of
                           the Code.

                  (b)      The proponent of the plan complies with the
                           applicable provisions of the Code.

                  2(c)     The plan has been proposed in good faith and not by
                           any means forbidden by law.



<PAGE>


                  (d)      Any payment made or promised by the proponent, by the
                           Debtors, or by a person issuing securities or
                           acquiring property under the plan, for services or
                           for costs and expenses in, or in connection with the
                           case, or in connection with the plan and incident to
                           the case, has been approved by, or is subject to the
                           approval of the bankruptcy court as reasonable.

                  (e)  1. (a) The proponent of the plan has disclosed the
                              identity of affiliations of any individual
                              proposed to serve, after confirmation of the plan,
                              as a director, officer, or voting trustee of the
                              debtor, an affiliate of the debtor participating
                              in a joint plan with the debtor, or a successor to
                              the debtor under the plan; and

                          (b) the appointment to, or continuance in such office
                              of such individual, is consistent with the
                              interests of creditors and equity security holders
                              and with public policy; and

                       2.     the proponent of the plan has disclosed the
                              identify of any insider that will be employed or
                              retained by the reorganized debtor and the nature
                              of any compensation for such insider.

                  (f)      Any governmental regulatory commission with
                           jurisdiction, after confirmation of the plan, over
                           the rates of the debtor has approved any rate change
                           provided for in the plan, or such rate change is
                           expressly conditioned on such approval.

                  (g)      With respect to each impaired class of claims or
                           interest:

                       1.  each holder of a claim or interest of such class has

                          (a) accepted the plan; or

                          (b) will receive or retain under the plan on account
                              of such claim or interest property of a value, as
                              of the effective date of the plan, that is not
                              less than the amount that such holder would so
                              receive or retain if the debtor were liquidated on
                              such date under Chapter 7 of the Code on such
                              date; or



<PAGE>


                       2.  if section 1111(b)(2) of the Code applies to the
                           claims of such class, the holder of a claim of
                           such class will receive or retain under the plan
                           on account of such claim property of a value, as
                           of the effective date of the plan, that is not
                           less than the value of such holder's interest in
                           the estate's interest in the property that
                           secures such claims.

                  (h)      With respect to each class of claims or interests:

                       1.  such class has accepted the plan; or

                       2.  such class is not impaired under the plan.

                  (i)      Except to the extent that the holder of a particular
                           claim has agreed to a different treatment of such
                           claim, the Plan provides that:

                       1.  with respect to a claim of a kind specified in
                           section 507(a) (1) or 501(a)(2) of the Code, on the
                           effective date of the plan, the holder of such
                           claim will receive on account of such claim equal
                           to the allowed amount of such claim;

                       2.  with respect to a class of claims of a kind specified
                           in section 507(a)(3), 507(a)(4), 507(a)(5) or 507(a)
                           (6) of the Code each holder of a claim of such class
                           will receive:

                          (a) if such class has accepted the plan, deferred cash
                              payments of a value, as of the effective date of
                              the Plan, equal to the allowed amount of such
                              claim; or

                          (b) if such class has not accepted the plan, cash on
                              the effective date of the plan equal to the
                              allowed amount of such claim; and

                  (j)      with respect to a claim of a kind specified in
                           section 507(a) (7) of the Code, the holder of a claim
                           will receive on account of such claim deferred cash
                           payments, over a period not exceeding six (6) years
                           after the date of such claim, of a value as of the
                           effective date of the plan equal to the allowed
                           amount of such claim.



<PAGE>


                  (k)      If a class of claims is impaired under the plan, at
                           least one class of claims; that is impaired has
                           accepted the plan, determined without including any
                           acceptance of the plan by any insider holding a claim
                           of such class.

                  (l)      Confirmation of the plan is not likely to be followed
                           by the liquidation, or the need for further financial
                           reorganization, of the debtor or any successor to the
                           debtor under the plan, unless such liquidation or
                           reorganization is proposed in the plan.

                  (m)      All fees payable under 28 U.S.C. section 1930, as
                           determined by the bankruptcy court at the hearing on
                           confirmation of the plan, have been paid or the plan
                           provides for the payments of all such fees on the
                           effective date of the plan.

                  (n)      The plan provides for the continuation after its
                           effective date of payment of all retiree benefits, as
                           that term is defined in section 1114 of the Code, at
                           the level established pursuant to subsection (3) (1)
                           (B) or (g) of section 1114, at any time prior to
                           confirmation of the plan, for the duration of the
                           period the debtor has obligated itself to provide
                           such benefits.

         The Debtors believe that the Plan satisfies all the statutory
requirements of Chapter 11 of the Code, that the Debtors have complied or will
have complied with all the requirements of Chapter 11, and that the Plan is
proposed in good faith. The Debtors submit that holders of all Allowed Claims
impaired under the Plan will receive payments under the Plan having a present
value as of the Effective Date not less than the amounts likely to be received
if the Debtors were liquidated in a case under Chapter 7 of the Code. At the
Confirmation Hearing the Bankruptcy Court will determine whether holders of
Allowed Claims or allowed Equity Interests would receive greater distributions
under the Plan than they would receive in a liquidation under Chapter 7.



<PAGE>


         18.3 CRAMDOWN - The Bankruptcy Court may still confirm the Plan at the
request of the Debtors, if, as to each impaired Class which is deemed to have
rejected the Plan, the Bankruptcy Court determines that the Plan "does not
discriminate unfairly" and is "fair and equitable" with respect to that Class. A
plan of reorganization "does not discriminate unfairly" within the meaning of
the Code if no Class receives more than it is legally entitled to receive for
its Claims or Equity Interests.

         "Fair and equitable" has different meanings with respect to the
treatment of Unsecured Claims and Equity Interests. As set forth in section
1129(b)(2) of the Code, those meanings are as follows:


                  (a) With respect to a class of unsecured claims:

                      1.  the Plan provides that each holder of a claim of such
                          class receive or retain on account of such claim
                          property of a value, as of the effective date of the
                          plan, equal to the allowed amount of such claims; or

                      2.  the holder of any such claim or interest that is
                          junior to the claims of such class will not receive or
                          retain under the Plan on account of such junior claim
                          or interest any property.

                  (b) With respect to a class of equity interests:

                      1.  the plan provides that each holder of an interest of
                          such class receive or retain on account of such
                          interest property of a value, as of the effective date
                          of the plan, equal to the greatest of the allowed
                          amount of any fixed liquidation preference to which
                          such holder is entitled, any fixed redemption price to
                          which such holder is entitled or the value of such
                          interest; or



<PAGE>


                      2.  the holder of any interest that is junior to the
                          interest of such class will not receive or retain
                          under the plan on account of such junior interest any
                          property.

         The Bankruptcy Court will determine at the Confirmation Hearing whether
the Plan is fair and equitable with respect to, and does not discriminate
unfairly against, any rejecting impaired Class of Claims or Equity Interests.
For the reasons set forth above, the Debtors believe the Plan does not
discriminate unfairly against, and is fair and equitable with respect to each
impaired Class of Claims or Equity Interests.


19. ALTERNATIVES TO THE PLAN

         LIQUIDATION OF DEBTORS. An orderly liquidation of the assets of each of
the Debtors would net significantly less than the amounts due Inverness as a
secured creditor. In a liquidation, unsecured creditors would receive nothing.


Dated this 24th day of November, 1999.

                                          POWER DESIGNS, INC.

                                          By: /s/ MELVIN BECKER
                                            -----------------------------------
                                              Melvin Becker
                                              Vice President

                                          PDIXF ACQUISITION CORPORATION

                                          By:  /s/ MELVIN BECKER
                                             ---------------------------------
                                               Melvin Becker
                                               Vice President


<PAGE>


                                    EXHIBIT B

                              Liquidation Analysis

<TABLE>
<CAPTION>


                                              Asset                  Book Value               Liquidation Value
                                                                (As of September 30, 1999)
-----------------------------------  -------------------------- -------------------------- ---------------------------
<S>                                 <C>                         <C>                        <C>
Power Designs, Inc                   Cash                              118,199.72                  118,199.72
-----------------------------------  -------------------------- -------------------------  --------------------------
                                     Partnership Investment             22,041.00                     0.00
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Accounts Receivable(1)             18,184.50                   14,547.60
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Mach. & Equipment                    0.00                        0.00
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Inventory(2)                       66,788.22                   33,394.11
------------------------------------ -------------------------- -------------------------- --------------------------
          TOTAL                                                        225,213.44                  166,141.43
------------------------------------ -------------------------- -------------------------- --------------------------

------------------------------------ -------------------------- -------------------------- --------------------------
PDIXF
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Accounts Receivable(1)            344,813.41                  275,850.72
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Mach. & Equipment                 357,439.78                  255,710.00
------------------------------------ -------------------------- -------------------------- --------------------------
                                     Inventory(2)                      762,523.33                  381,261.66
------------------------------------ -------------------------- -------------------------- --------------------------
                                     UPS Technology                         0                       50,000.00
------------------------------------ -------------------------- -------------------------- --------------------------
        TOTAL                                                         1,464,776.52                 962,822.38
------------------------------------ -------------------------- -------------------------- --------------------------
GRAND TOTAL                                                           1,689,989.96                1,128,963.81
------------------------------------ -------------------------- -------------------------- --------------------------
Inverness Claim                                                       7,259,019.02                7,259,019.02
------------------------------------ -------------------------- -------------------------- --------------------------
VALUE TO OTHER CREDITORS                                                    0                           0
------------------------------------ -------------------------- -------------------------- --------------------------
</TABLE>

(1) Receivables are valued at 80% of book value in liquidation.

(2) Inventory is valued at 50% of book value in liquidation

Any Net Operating Loss Carry Forward, which the Debtors may have, has no value
in liquidation.