Calypte Biomedical Corp (fka CYPT)

[scion]

(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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