Advanced Delivery and Chemical Systems Nevada, Inc. - Page 4

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          the chemical canisters were being refilled.  ADCS’ startup costs            
          for manufacturing the dual canister refilling system were                   
          approximately $1.1 million.                                                 
               By the mid-1990s, ADCS was selling TEOS and the other                  
          chemicals and canisters that it manufactured in Texas to computer           
          chip manufacturing companies located throughout the World,                  
          including Europe and South Korea.                                           
               In South Korea, in 1995, as a result of pressure from the              
          South Korean Government and from computer chip manufacturing                
          companies doing business in South Korea, ADCS and an unrelated              
          Korean company jointly formed under Korean law ADCS-Korea Co.,              
          Ltd. (ADCS-Korea), for the purpose of manufacturing in South                
          Korea TEOS and other chemical products that ADCS manufactured in            
          the United States.                                                          
               The shares of stock in ADCS-Korea were owned 70 percent by             
          ADCS and 30 percent by South Korean interests.                              
               In 1995, to the initial capitalization of ADCS-Korea, ADCS             
          contributed $1.55 million and the South Korean company                      
          contributed $664,000.  These funds were used by ADCS-Korea to               
          purchase machinery, equipment, vehicles, tools, and furniture, to           
          hire employees and to purchase land in an industrial park in                
          Anseong, South Korea, on which a chemical manufacturing plant was           
          built.                                                                      








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