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beginning of its fiscal 2004 The Company believes the adoption of FAS No 143 will not have a material impact on its financial position or results of operations In July 2002, the FASB issued FAS No 146, Accounting for Costs Associated with Exit or Disposal Activities FAS No 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and replaces EITF Issue No 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring) FAS No 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred FAS No 146 also establishes that fair value is the objective for initial measurement of the liability The statement is effective for exit or disposal activities initiated after December 31, 2002.

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Many nanotech start-ups are not yet ready for venture capital investment First, despite the enormous resources being dedicated to exploring and engineering at the nanoscale, the field is still in its infancy Many start-up companies have just recently spun out of breakthroughs in universities and cannot reasonably expect to develop commercial products for at least seven to ten years Even nanotech companies that can demonstrate functional products lack the ability to scale up for mass production19 Nanotech cannot yet provide the customary tenfold returns on investment within five years, or fivefold returns within three years, which are usually expected by VCs 20 Indeed, private equity investors do not have deep enough pockets or enough patience to fund such a [nanotechnology] startup to profitability 21 Despite its nascency, many investors have identified nanotechnology as the next great technological wave.

You will have seen this used at the end of the transcript in Appendix 2. Draw the interviewee s attention to all of the constructs and ask whether s/he has some new, different construct which has not yet been expressed but which clearly applies to the full set of elements. I often use this as a way of nishing my own grid interviews.

A trip down Sand Hill Road reveals that some venture capitalists are already proclaiming nanotechnology to be the next big thing At research universities across the country, venture capitalists are giving presentations to graduate classes in nanoscience and taking professors to lunch As Stanford professor Mike McGehee notes on the first day of his nanoscience class, Silicon Valley suddenly became interested in nanotechnology after the dotcom crash 22 Steve Jurvetson, one venture capitalist fueling the excitement, declares, We believe that nanotech is the next great technology wave, the nexus of scientific innovation that revolutionizes most industries and indirectly affects the fabric of society Historians will look back on the upcoming epoch with no less portent than the Industrial Revolution 23 According to an analyst, investors are hypnotized by nanotechnology.

The Company believes the adoption of FAS No 146, which will occur in fiscal 2004, will not have a material impact on its financial position or results of operations In November 2002, the FASB s Emerging Issues Task Force (EITF) reached a consensus on EITF 02-16 Accounting by a Reseller for Cash Consideration Received from a Vendor, which addresses the accounting for Cash Consideration (which includes slotting fees, cooperative advertising payments etc) and Rebates or Refunds from a vendor that are payable only if the merchant completes a specified cumulative level of purchases or remains a customer of the vendor for a specified period of time.

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