As a result of the existing covenant defaults, a note Holder, at its
option, may demand repayment in cash of the accrued but unpaid interest
and 130% of the then-outstanding principal on the Notes. There is $5,304
in accrued but unpaid interest and $1,152,290 in aggregate principal
outstanding on the Notes as of October 21, 2002. The Company has hired D.F.
King and Co., Inc. of New York, NY to act as the Company’s proxy solicitor
for its Special Meeting.
The Company’s Special Meeting of Shareholders was originally scheduled for
September 25, 2002, but has been adjourned to 3 p.m. local time on Friday,
October 25, 2002 at the Company’s offices at 2915 Waters Road, Suite 108,
Eagan, Minnesota 55121. The Board of Directors of the Company recommends
that the Company’s shareholders vote “FOR” the Special Meeting proposal to
approve the issuance of greater than 20% of its outstanding Common Stock
upon conversion of the Notes and exercise of certain Common Stock Purchase
Warrants.
The Note holders have also agreed to waive a covenant default, if any such
default exists, relating to the Company’s registration of its Common Stock
for resale if, in addition to hiring a proxy solicitor and obtaining
approval of its Shareholders as outlined above, the Company files a
registration statement to register 750,000 additional shares of its Common
Stock on or before November 15, 2002.
The waiver only relates to the following events of default: (a) the
failure of the Company to obtain the Approval on or before the Approval
Date; (b) the failure of the Company to comply with the requirement for
continued listing on The Nasdaq SmallCap Market for a period of seven (7)
consecutive trading days because the minimum bid price of its Common Stock
was less than $1.00; and (c) the receipt by the Company on August 27, 2002
of a notice from The Nasdaq Stock Market, Inc. stating that the Company is
not in compliance with the requirements for continued listing because of
the failure of the Company’s Common Stock to maintain a minimum bid price
of $1.00 for a period of thirty (30) consecutive trading days. No other
events of default are waived. The failure of the Company to comply with
any of the covenants of the Notes will result in an event of default under
the Notes. Upon an event of default, a Note holder, at its option, may
demand cash repayment of 130% of the then-outstanding principal amount of
the Note and any accrued but unpaid interest. There can be no assurance
that the Company will comply with the Note covenants in the future. There
can also be no assurance that the Company will successfully obtain waivers
of any future event of default, if any event of default should occur.
Forward-looking statements in this press release are made under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
The Company wishes to caution readers not to place undue reliance on any
forward-looking statements and to recognize that the statements are not a
prediction of actual future results. Actual results could differ
materially from those presented and anticipated in the forward-looking
statements due to the risks and uncertainties set forth in the Company’s
2002 Annual Report on Form 10-KSB under the caption “Risk Factors,” as
well as others not now anticipated.
CVProfilor is a registered trademark of Hypertension Diagnostics, Inc.
Hypertension Diagnostics, HDI/PulseWave, PulseWave and CVProfile are trademarks of
Hypertension Diagnostics, Inc. All rights reserved.
Contact: Greg H. Guettler, President
