Calypte Biomedical Corp (fka CYPT)

[scion]

(1) The Bristol Debentures and Warrants, the 8% Convertible Notes, the
Other Restart Financings, the Mercator 12% and 10% Debentures and warrants and
the Marr Technologies B.V. PIPE's were issued under exemptions provided by
Regulation S. The Company could issue no shares under the equity line with
Townsbury until it had completed an effective registration for the underlying
shares. With the exception of Marr Technologies B.V., which is an affiliate of
the Company based on its August and September 2003 investments, none of the
entities listed above is or has been an affiliate of the Company. Other than
Marr Technologies B.V., all of the listed investors were subject to ownership
limitations restricting their ownership of the Company's stock to a maximum of
4.9% or 9.9%, depending on the specific agreement.
33

CALYPTE BIOMEDICAL CORPORATION AND SUBSIDIARIES

(2) At October 31, 2003, the investors have converted all but
approximately $958,000 of principal of the convertible notes and debentures
issued since February 2002. Based on current market prices, the Company would be
required to issue approximately 1.2 million additional shares of its common
stock if the investors elected to convert their remaining debentures at this
time.

(3) On February 14, 2003 the registration statement for the shares
underlying the $525,000 of the Bristol Debentures became effective. On July 18,
2003, the registration statement for 52,500,000 shares underlying the Other
Recent Financings became effective. As a result of a decline in the market price
of the Company's stock subsequent to the effective date of the July 2003
registration statement, the number of shares registered was insufficient to
permit the complete conversion of the notes and debentures into registered
shares. The shares underlying certain of the convertible securities have become
eligible for resale under Rule 144, and certain investors have availed
themselves of that eligibility to convert restricted shares issued pursuant to
conversions into free-trading shares. As of September 30, 2003, approximately
40% of the Company's outstanding common stock, or approximately 54.5 million
shares, is unregistered. Of this amount, Marr Technologies holds 33.5 million
restricted shares issued pursuant to their two PIPE transactions and the
conversion of their investment in $570,000 principal value of 12% convertible
notes. Other investors in our convertible notes and debentures hold
approximately 19.0 million restricted shares issued pursuant to their
conversions.

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