MESSAGE FROM OUR PRESIDENT, JOHN MOERS

1998 provided many exciting challenges and opportunities for Fallbrook Engineering.

We have successfully completed projects for Alliance Pharmaceutical Corp., Bio Plas Inc., BioDerm, Inc., BioStar, Cell Robotics, Inc., Children’s Hospital of Oakland, Guidant EVT, Interpore International, MedLogic Corp., Mentor Corporation, Precision Haemostatics, Inc., Quest Medical, Sage Products, Inc., Shepherd Laboratories Inc., Smith & Nephew Donjoy, Valley Lab., Inc and W.L. Gore and Associates. When follow-on efforts are needed we stand ready to contribute our team of unique resources to assist with those needs.

We began working relationships with Ablation Technologies, KR Dermatologics, Retrax Safety Systems, and others. We look forward to meeting these clients’ objectives in innovative and efficient ways.

In response to our growing customer needs, Fallbrook Engineering strengthened its capabilities and resource base. Mr. Bill Atkinson joined our staff as Senior Project Engineer and has spearheaded an involved effort for a major client. See Bill’s biography on our web site - he brings a wealth of experience and creativity to the company. Many new Associate agreements have been put into place to add breadth and depth to the range of services available.

Additional hardware, including environmental ovens and tensile testers, and software, including Lab View Data Acquisition, AutoCad Release 14 and Solid Works, were installed which increase capacity and reduce turn-around times. We unveiled this new web site: www.fallbrook-eng.com which provides company information, news and important industry related links.

In January we participated for the first time with a booth at the Medical Device and Manufacturing Exposition in Anaheim, CA. We enjoyed meeting many of the 10,000 plus professionals who attended this important three-day event. We will be there again in 1999. Please plan to stop by our booth #1820 if you are there January 26 to 28, 1999. For additional information, contact Mary Poniktera, our Business Manager.

Finally, I want to take this opportunity to thank our clients, associates, employees and industry partners for the many contributions they have made to our success in 1998. With your support, we have been able to enjoy the pleasure of providing first class comprehensive consulting to the healthcare product industry. Happy New Year and may God bless you all,

John W. Moers