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1.	Approve the Asset Purchase Agreement, the Asset Sale Transaction and the other transactions contemplated by the Asset Purchase Agreement (the “Asset Sale Proposal”);

2.	Elect seven (7) directors to the Board to serve until the 2019 Annual Meeting of Stockholders (the “Director Proposal”);

3.	Ratify Frazier & Deeter, LLC as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2018 (the “Auditor Proposal”);

4.	Approve a non-binding advisory resolution supporting the compensation of our named executive officers (the “Advisory Proposal”);

5.	Approve a proposal to adjourn or postpone the Annual Meeting, if necessary or appropriate, for the purpose of soliciting additional votes for the approval of the Asset Sale Proposal (the “Adjournment Proposal”); and

6.	Transact such other business that may properly come before the meeting.

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•	Proposal 1 - FOR the Asset Sale Proposal;

•	Proposal 2 - FOR each of the Board’s nominees for directors;

•	Proposal 3 - FOR the Auditor Proposal;

•	Proposal 4 - FOR the Advisory Proposal; and

•	Proposal 5 - FOR the Adjournment Proposal.

•	Proposal 1 - FOR the Asset Sale Proposal;

•	Proposal 2 - FOR each of the Board’s nominees for directors;

•	Proposal 3 - FOR the Auditor Proposal;

•	Proposal 4 - FOR the Advisory Proposal; and

•	Proposal 5 - FOR the Adjournment Proposal.

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For Proposal 1, the Asset Sale Proposal requires the affirmative vote of holders of at least a majority of our issued and outstanding shares of common stock that are entitled to vote at the Annual Meeting. Stockholders may vote “for”, “against” or “abstain” for the Asset Sale Proposal. If you “abstain” from voting on the Asset Sale Proposal, your abstention will have the same effect as a vote “against” the Asset Sale Proposal.

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For Proposal 2, each of the seven (7) nominees for director receiving a majority of the votes cast by stockholders present in person or represented by proxy at the Annual Meeting will be elected (A majority of votes cast means that the number of votes cast “for” a director must exceed the number of votes cast “against” that director.). A proxy marked “withhold” or “abstain” with respect to the election of a director will not be voted as to the director indicated, but will be counted for purposes of determining whether there is a quorum. Broker non-votes will not affect the outcome of the vote on this matter.

•	For Proposal 3, the affirmative vote of the majority of the votes cast by stockholders present in person or represented by proxy at the Annual Meeting is required to approve the ratification of the appointment of Frazier & Deeter, LLC as our independent registered public accounting firm for its fiscal year ending December 31, 2018.

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For Proposal 4, the affirmative vote of the majority of the votes cast by stockholders present in person or represented by proxy at the Annual Meeting is required to approve, on an advisory basis, the compensation of our Named Executive Officers as described in this Proxy Statement. In the case of Proposal Four, the advisory votes with respect to executive compensation will neither be binding on the Company or the Board, nor will they create or imply any change in the fiduciary duties of or impose any additional fiduciary duties on, the Company or the Board. However, the Board values the opinions expressed by the stockholders in this advisory vote and will consider the outcome of this vote in determining its compensation policies. Abstentions and broker non-votes are counted to determine whether a quorum is present at the Annual Meeting but are not counted as a vote in favor of or against a particular matter.

•	For Proposal 5, the affirmative vote of the majority of the votes cast by stockholders present in person or represented by proxy at the Annual Meeting is required to approve the Adjournment Proposal.

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•	our product is determined to be ineffective or unsafe following approval and is removed from the market or we are required to perform additional research and development to further prove the safety and effectiveness of the product before re-entry into the market;

•	the regulatory approvals of our new products are delayed or we are required to conduct further research and development of our products prior to receiving regulatory approval;

•	we are unable to build a sales and marketing group to successfully launch and sell our new products;

•	we are unable to raise the additional funds if needed to successfully develop and commercialize our products or acquire additional products for growth;

•	we are required to allocate available funds to litigation matters;

•	we are unable to manufacture the quantity of product needed in accordance with current good manufacturing practices to meet market demand, or at all;

•	competition from other products or technologies prevents or reduces market acceptance of our products;

•	we do not have and cannot obtain the intellectual property rights needed to manufacture or market our products without infringing on another company’s patents; or

•	we are unsuccessful in defending against patent infringement or other intellectual property rights, claims that could be brought against us, our products or technologies

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•	the occurrence of any event, change or other circumstances that could give rise to the termination of the Asset Purchase Agreement;

•	our stockholders failing to approve the Asset Sale Proposal;

•	the failure of one or more conditions to the closing of the Asset Sale Transaction to be satisfied or waived by the applicable party;

•	an increase in the amount of costs, fees, expenses and other charges related to the Asset Purchase Agreement or Asset Sale Transaction;

•	risks arising from the diversion of management’s attention from our ongoing business operations;

•	risks associated with our ability to identify and realize business opportunities following the Asset Sale Transaction;

•	loss of a key customer or supplier;

•	price increases for supplies and components;

•	technical problems with our research and products;

•	entry of new competitors and products;

•	technological obsolescence of our products;

•	adverse federal, state and local government regulation;

•	technical problems with our research and products;

•	environmental, health and safety compliance costs;

•	any failure or interruption of our information technology infrastructure; and

•	the other factors discussed under the heading “Risk Factors” in this Proxy Statement.

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•	the Asset Sale Proposal;

•	the Director Proposal;

•	the Auditor Proposal;

•	the Advisory Proposal; and

•	the Adjournment Proposal

•	Proposal 1 - FOR the Asset Sale Proposal;

•	Proposal 2 - FOR each of the Board’s nominees for director;

•	Proposal 3 - FOR the Auditor Proposal;

•	Proposal 4 - FOR the Advisory Proposal; and

•	Proposal 5 - FOR the Adjournment Proposal.

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By Telephone or Internet - All record holders can vote by touchtone telephone from the United States using the toll free telephone number on the proxy card, or over the Internet, using the procedures and instructions described on the proxy card. The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to vote their shares, and to confirm that their instructions have been recorded properly.

•	In Person - All record holders may vote in person at the Annual Meeting.

•	By Written Proxy - All record holders can vote by written proxy card.

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•	attending the Annual Meeting and voting in person. Your attendance at the Annual Meeting will not by itself revoke a proxy. You must vote your shares by ballot at the Annual Meeting to revoke your proxy.

•	voting again by telephone or over the Internet (only your latest telephone or Internet vote submitted prior to the Annual Meeting will be counted).

•	if you requested and received written proxy materials, completing and submitting a new valid proxy bearing a later date.

•	giving written notice of revocation to the Company addressed to our Chief Financial Officer, Treasurer and Secretary, at the Company’s address above, which notice must be received before noon, Eastern Time, on August 29, 2018.

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•	the value of the consideration to be received by us pursuant to the Asset Purchase Agreement;

•	our Board’s belief that the Asset Sale Transaction was more favorable to our stockholders than any other alternative reasonably available to the Company and our stockholders, including the alternatives of retaining our current business based upon:

◦	the Board’s knowledge of the current and prospective environment in which the Company operates, the competitive environment, the Company’s overall strategic position, and the challenges attendant to improving the Company’s financial performance in order to maximize stockholder value and the likely effect of these factors on the Company’s sustainability as a public company and strategic options;

◦	the Board’s understanding of our business, operations, management, financial condition, earnings and prospects;

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the opinion of Piper Jaffray to the effect that, as of such date and based on and subject to the assumptions made, procedures followed, matters considered and limitations on the scope of the review undertaken by Piper Jaffray, as described in its written opinion, the consideration of $97 million in cash to be received by the Company in the Asset Sale was fair, from a financial point of view, to the Company, as more fully described below under “Proposal 1: Asset Sales Proposal - Opinion of Our Financial Advisor” beginning on page 28;

•	the inclusion of a customary “fiduciary out” provision in the Asset Purchase Agreement that would allow the Board to pursue more favorable strategic alternatives in certain limited circumstances;

•	the consideration we receive in the Asset Sale Transaction would provide us with substantial cash to provide liquidity and certainty of value to the Company immediately upon the closing of the Asset Sale Transaction, which will permit us to continue to invest in and expand our Advanced Energy business;

•	the Asset Sale Transaction provides substantial working capital without diluting existing stockholders;

•	the continued need for capital to commercialize our J-Plasma technology and grow our Advanced Energy business;

•	the anticipated time to close the Asset Sale Transaction and the risk that if we did not accept Buyer’s offer at the time that we did, the Board might not have had another opportunity to do so;

•	the Asset Sale Transaction will be subject to the approval of the holders of a majority of our outstanding shares of common stock;

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•	our stockholders will continue to own stock in our company and potentially benefit from future earnings; and

•	the terms of the Asset Purchase Agreement were negotiated at arms-length and believed by our Board to be fair to us and our stockholders.

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the fact that, although the Company will continue to exercise control and supervision over its operations prior to closing, the Asset Purchase Agreement prohibits the Company from taking a number of actions relating to the conduct of its business prior to the closing without Buyer’s consent, which may delay or prevent the Company from undertaking business opportunities that may arise during the pendency of the Asset Sale Transaction, whether or not the Asset Sale Transaction is completed;

•	the conditions placed on our ability to solicit or respond to Acquisition Proposals as described under “Proposal 1: Asset Sale Proposal - Asset Purchase Agreement - Covenants - No Solicitation” beginning on page 53;

•	the risk that there is no assurance that all conditions to the parties’ obligations to complete the Asset Sale Transaction will be satisfied or waived, and as a result, it is possible that the Asset Sale Transaction could be delayed or might not be completed;

•	the risks and costs to the Company if the Asset Sale Transaction does not close, including the diversion of management and employee attention, potential employee attrition and the potential effect on business and customer relationships;

•	the risk of disruption to our business and customer reaction as a result of the public announcement of the Asset Sale Transaction; and

•	the risk that accompanies being a public company with relatively low revenues while we continue to try to grow our Advanced Energy business without the income associated with the Business.

•	reviewed and analyzed the financial terms of a draft of the Asset Purchase Agreement;

•	reviewed and analyzed certain financial and other data with respect to the Business that was publicly available;

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•	reviewed and analyzed certain information, including financial forecasts, relating to the business, earnings, cash flow, assets, liabilities and prospects of the Business that were furnished to Piper Jaffray by the Company;

•	conducted discussions with members of senior management and representatives of the Company concerning the two immediately preceding matters described above, as well as the business and prospects of the Business before giving effect to the Transaction;

•	compared the financial performance of the Business with that of certain publicly-traded companies that Piper Jaffray deemed relevant; and

•	reviewed the financial terms of certain business combination transactions that Piper Jaffray deemed relevant.

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•	Accuray Incorporated

•	Alphatec Holdings Inc(2) (3)

•	AngioDynamics, Inc.

•	BIOLASE, Inc. (2) (3) (4)

•	Conformis, Inc. (2) (3) (4)

•	Endologix, Inc. (2) (3) (4)

•	iCAD, INC. (2) (3) (4)

•	Iridex Corporation(1) (2)

•	LeMaitre Vascular, Inc. (2) (3)

•	PRO-DEX, INC.

•	RTI Surgical, Inc.

•	SeaSpine Holdings Corporation(2) (3) (4)

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•	Cytosorbents Corporation

•	iRadimed Corporation

•	Nuvectra Corporation

•	OrthoPediatrics Corp.

•	Second Sight Medical Products, Inc.

•	Sensus Healthcare, Inc.

•	Sientra, Inc.

•	Viveve Medical, Inc.

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•	our corporate organization and qualification;

•	our corporate authority to enter into the Asset Purchase Agreement and each of the Ancillary Agreements, the validity and enforceability of such agreements and the Board’s approval and recommendation;

•	the absence of conflicts with our organizational documents, applicable law or certain contracts and permits, or the occurrence of defaults under or the creation of liens with respect to certain contracts or permits, as a result of the execution, delivery and performance by us of the Asset Purchase Agreement and the Ancillary Agreements;

•	the absence of a requirement to obtain consents or approvals with respect to our execution, delivery and performance under the Asset Purchase Agreement and Ancillary Agreements, except for any filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976;

•	the absence of any non-competition agreements to which we are a party which would limit our ability to conduct or operate the Business;

•	that we are not a creditor or claimant with respect to any debtors subject to bankruptcy proceedings;

•	our title to the tangible and intangible personal property included in the Purchased Assets.

•	the completeness of our filings with the SEC and the preparation of our financial statements in accordance with GAAP;

•	the absence of certain changes with respect to the Business;

•	litigation and liabilities;

•	employee benefits;

•	compliance with laws and permits;

•	labor and employment matters;

•	our Real Property;

•	our personal property;

•	our intellectual property;

•	our Receivables and payables;

•	our inventory and customer deposits;

•	environmental matters;

•	our employee plans;

•	certain tax matters, including our tax filings and compliance with laws relating to the payment and withholding of taxes with respect to employees, as well as the absence of any outstanding tax audits;

•	our material contracts;

•	certain labor matters;

•	insurance;

•	brokers, finders or investment bankers entitled to any fees in connection with the Asset Sale Transaction;

•	our largest customers with respect to the Business;

•	our largest suppliers with respect to the Business;

•	the absence of takeover statutes applicable to us or the Asset Sale Transaction;

•	product return and warranty and product liability matters;

•	the compliance of our business with applicable regulatory laws;

•	the sufficiency of the Purchased Assets to conduct the Business following the closing of the Asset Sale Transaction in substantially the same manner as it was conducted by us prior to closing and no other person holds any right, title or interest in any of the Purchased Assets;

•	privacy and security;

•	compliance with health care laws;

•	compliance with various anti-bribery laws;

•	affiliate interests and transactions; and

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•	absence of any untrue statements of material facts.

•	its organization and qualification;

•	its authority to enter into the Asset Purchase Agreement and the Ancillary Agreements and the validity and enforceability of such agreements;

•	the absence of conflicts with Buyer’s organizational documents and applicable law as a result of Buyer’s execution, delivery and performance under the Asset Purchase Agreement and Ancillary Agreements;

•	having sufficient available funds as of the closing to pay us $97 million in cash and all other necessary payments in connection with the transactions contemplated by the Asset Purchase Agreement;

•	brokers, finders or investment bankers entitled to any fees in connection with the Asset Sale Transaction;

•	its ownership of the Company’s common stock; and

•	absence of any untrue statements of material facts.

•	conduct the Business in the ordinary course of business consistent with past practice and in material compliance with all material applicable laws and permits; and

•	use our commercially reasonable efforts to preserve substantially intact the organization of the Business, keep available the services of the current Business employees and preserve the current relationships of the Business with customers, suppliers and other persons with which the Business has significant business relations.

•	issue, sell, pledge, dispose of or otherwise subject to any encumbrance any Purchased Assets, other than sales or transfers of inventory for fair market value in the ordinary course of Business;

•	incur any indebtedness for borrowed money or issue any debt securities or become liable for any obligations of third-parties;

•	enter into, terminate, renew, extend or materially amend or modify or waive any rights or obligations under any material contract;

•	authorize, incur or make any commitment with respect to any single capital expenditure in excess of $50,000 or $150,000 in the aggregate;

•	acquire any interest in any person or any division thereof or any assets thereof or enter into any joint venture, legal partnership or similar arrangement with any person;

•	enter into any lease of personal property or any renewals thereof involving a term of more than one year or rental obligation exceeding $10,000 per year;

•	enter into, adopt, amend, modify or terminate any benefits plan, except as may be required by applicable law or any employee plan;

•	increase the compensation or benefits of, or pay any special bonus or any special remuneration to, any employees, officers, directors, or other service providers;

•	enter into any related party contracts effecting the Business or the Purchased Assets;

•	change accounting principles, policies, practices or methods or revalue in any material respects any property or assets, except as required by GAAP;

•	take certain actions with respect to tax matters, including any change in material tax elections or methods;

•	settle, release, discharge, waive or compromise certain litigation, liabilities or obligations relating to the Business or the Purchased Assets;

•	cancel, compromise, waive or release any right or claim relating to the Business or the Purchased Assets other than in the ordinary course of Business;

•	fail to maintain in full force and effect material insurance policies;

•	abandon or cease to prosecute or maintain our intellectual property that is material to the conduct of the Business;

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•	accelerate the collection of or discount any Receivables;

•	delay payment of liabilities to become Assumed Liabilities;

•	increase cash on hand in connection with the Business;

•	use any Purchased Assets to pay any Transaction Expenses;

•	commence or settle any action for an amount in excess of $25,000 individually or $100,000 in the aggregate relating to the Business, the Purchased Assets or the Assumed Liabilities; or

•	commit, authorize or agree to take any of the foregoing actions.

•	engage in any business anywhere that manufactures, produces or supplies products or services that are manufactured, produced or supplied by the Business (“Competing Business”);

•	perform management, executive or supervisory functions with respect to, own, operate, join, control, render financial assistance to, receive any economic benefit from, or allow any of our officers, directors or employees to be connected as an officer, director, employee, partner, member, stockholder, consultant or otherwise with, any person engaged in a Competing Business;

•	solicit, recruit or hire any person who at any time on or after the closing is an employee of Buyer; provided, that the Company shall not be prohibited from (i) generally soliciting to the public, or (ii) soliciting, recruiting or hiring any employee of Buyer who has ceased to be employed or retained by the Company, Buyer or any of their respective affiliates for at least 12 months;

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approach or seek Competing Business from any Customer or refer Competing Business from any Customer to any person or be paid commissions based on Competing Business sales received from any Customer by any person. For purposes hereof, “Customer” is defined as any person to which the Company, the Buyer or any of their respective affiliates provided products or services during the 36-month period prior to the closing of the Asset Sale Transaction;

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•	fail to cease and cause to be terminated any discussions or negotiations with any person and its representatives that would be prohibited by the non-solicitation provisions of the Asset Purchase Agreement;

•	fail to request the prompt return or destruction of all non-public information previously furnished with respect to any Acquisition Proposal or potential Acquisition Proposal;

•	fail to cease providing any further information with respect to us or any Acquisition Proposal or potential Acquisition Proposal to any person or its representatives and fail to terminate all physical or electronic data room access granted to any such person and its representatives;

•	solicit, initiate, facilitate, assist, induce or knowingly encourage any inquiries regarding, or the making, submission or announcement of any Acquisition Proposal, offer or inquiry, that is reasonably expected to lead to any Acquisition Proposal or otherwise cooperate with or assist or participate in the making, submission or announcement of any Acquisition Proposal;

•	furnish to any person (other than Buyer and its representatives) access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company, in any such case with respect to any Acquisition Proposal;

•	participate or engage in discussions or negotiation with any person conducted with respect to any Acquisition Proposal or potential Acquisition Proposal;

•	enter into, continue or otherwise participate or continue in any discussions or negotiations regarding, or furnish to any person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal;

•	approve, endorse or recommend any proposal, offer or inquiry that constitutes, or is reasonably expected to lead to, an Acquisition Proposal;

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approve, endorse, recommend, or execute or enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement constituting or relating to an Acquisition Proposal or any proposal, offer or inquiry that is intended to or would reasonably be expected to lead to an Acquisition Proposal (an “Alternative Acquisition Agreement”);

•	terminate, waive, amend, release or modify any provision of any confidentiality or standstill agreement or takeover provisions to which we or any of our affiliates or representatives is a party with respect to any proposal, offer or inquiry that constitutes, or is reasonably expected to lead to, an Acquisition Proposal, or otherwise fail to enforce any of the foregoing; or

•	resolve, agree or propose to do any of the foregoing.

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furnish information with respect to the Company and its subsidiaries to the person making such Acquisition Proposal pursuant to a confidentiality agreement with terms relating to the Company’s confidential information that are substantially similar to, and no less favorable to the Company than, those set forth in the confidentiality agreement between the Company and RoundTable; provided, that the Company must provide Buyer a non-redacted copy of such confidentiality agreement and any non-public information provided to any such person shall have been previously provided to Buyer or shall be provided to Buyer prior to or concurrently with the time it is provided to such person; and

•	participate in discussions or negotiations with the person making such Acquisition Proposal regarding such Acquisition Proposal.

•	withhold or withdraw (or publicly propose or resolve to withhold or withdraw) or, in any manner adverse to Buyer, qualify, amend or modify (or publicly propose or resolve to withhold or withdraw) the Board’s recommendation;

•	fail to include the Board’s recommendation in favor of the asset purchase in this Proxy Statement;

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fail to publicly reaffirm the Board’s recommendation in favor of the asset purchase within five business days after Buyer so requests in writing or, if the meeting of stockholders is scheduled to be held within five business days of such request, within one business day after such request and in any event, prior to the date of the meeting of stockholders (provided, that Buyer may not make such a request on more than three occasions unless any such request relates to the announcement or commencement of an Acquisition Proposal or any material change thereto);

•	approve, adopt or recommend or propose (publicly or otherwise) to approve, adopt or recommend, or otherwise declare advisable, any Acquisition Proposal; or

•	take or fail to take any formal action or make or fail to make any recommendation or public statement in connection with a tender offer or exchange offer other than a recommendation against such offer or a “stop, look and listen” communication by the Board pursuant to Rule 14D-9(f) of the Exchange Act.

•	make an Adverse Recommendation Change (or terminate the Asset Purchase Agreement, as described below) if the Company receives a bona fide written Acquisition Proposal that was unsolicited and did not otherwise result from a breach of the Company’s non-solicitation obligations and that has not been withdrawn; or

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other than in connection with an Acquisition Proposal, take any action prohibited by the first three bullets above (which we refer to as an “Intervening Event Change of Recommendation”) in connection with the occurrence of any positive material development or material change in circumstances occurring or arising after the date of the Asset Purchase Agreement that was not known to, or reasonably expected by the Board as of, or prior to, the date of the Asset Purchase Agreement and does not relate to any Acquisition Proposal or the mere fact we meet or exceed any internal or published projections, forecasts, estimates or predictions of revenue, earnings or other financial or operating metrics for any period ending on or after the date of the Asset Purchase Agreement, or changes after the date of the Asset Purchase Agreement in the market price or trading volume of our common stock or the credit rating of the Company (it being understood that the underlying cause of any of the foregoing may be considered and taken into account), which such occurrence we refer to as an “Intervening Event”, if as a result of such Intervening Event, the Board determines in good faith, after consultation with outside legal counsel, that such Intervening Event continues to exist, such Intervening Event necessitates an Adverse Recommendation Change and failure to make an Adverse Recommendation Change in response to such Intervening Event would be a breach of its fiduciary duties under applicable law, taking into account any revisions to the Asset Purchase Agreement made or proposed in writing by Buyer (provided that we have complied in all respects with our non-solicitation obligations).

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•	that no governmental authority shall have enacted, issued, promulgated, enforced or entered any law (whether temporary, preliminary or permanent) that is then in effect and that enjoins, restrains, conditions, makes illegal or otherwise prohibits the consummation of the transactions contemplated by the Asset Purchase Agreement or the Ancillary Agreements;

•	receipt of Stockholder Approval;

•	expiration or termination of any waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable to the transactions contemplated by the Asset Purchase Agreement;

•	the accuracy of the parties’ representations and warranties in the Asset Purchase Agreement as of closing, subject, in certain circumstances, to certain materiality and other thresholds;

•	the performance by the parties of their obligations and covenants under the Asset Purchase Agreement;

•	the delivery by the parties of executed counterpart signature pages to each of the Ancillary Agreements;

•	the delivery by each party of certain certificates and other documentation;

•	receipt of authorizations, consents, orders and approvals set forth in the Asset Purchase Agreement; and

•	the absence of any event, fact or development since the signing of the Asset Purchase Agreement that has had or would reasonably be expected to have a material adverse effect on the Business.

•	any breach of any surviving representation or warranty made by the Company contained in the Asset Purchase Agreement, the Company Disclosure Letter, or any Ancillary Agreement or any schedule or certificate delivered pursuant to any of the foregoing;

•	any breach of any covenant or agreement by the Company contained in the Asset Purchase Agreement, the Company Disclosure Letter or any Ancillary Agreement, or any schedule or certificate delivered pursuant to any of the foregoing;

•	any pending or threated action relating to the transactions contemplated by the Asset Purchase Agreement or Ancillary Agreements;

•	any Excluded Asset or Excluded Liability; and

•	the Company’s failure to comply with the terms and conditions of any bulk sales or bulk transfer or similar laws that may be applicable to the sale or transfer of any or all of the Purchased Assets.

•	any breach of any surviving representation or warranty made by Buyer contained in the Asset Purchase Agreement or any Ancillary Agreement or any schedule or certificate delivered pursuant to any of the foregoing;

•	any breach of any covenant or agreement by Buyer contained in the Asset Purchase Agreement or any Ancillary Agreement, or any schedule or certificate delivered pursuant to any of the foregoing; and

•	after the closing of the Asset Sale Transaction, any Assumed Liability.

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•	the Asset Sale Transaction has not closed by the Outside Date;

•	if any court of competent jurisdiction or other governmental authority shall have issued a judgment, order, injunction, rule or decree, or taken any other action restraining, enjoining or otherwise prohibiting any of the transactions contemplated by the Asset Purchase Agreement and such judgment, order, injunction, rule, decree or other action shall have become final and nonappealable; or

•	we fail to obtain Stockholder Approval.

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we breach or fail to perform in any material respect our representations, warranties, covenants or agreements under the Asset Purchase Agreement or if any of our representations or warranties shall have become untrue in any material respect, which breach or failure to perform or to be true, either individually or in the aggregate, if occurring or continuing at the closing (A) would result in the failure of any of the conditions set forth in the Asset Purchase Agreement and (B) cannot be or has not been cured by the earlier of (1) the Outside Date and (2) 30 days after the giving of written notice to us of such breach or failure; provided, that Buyer shall not have the right to terminate the Asset Purchase Agreement if Buyer is then in material breach of any of its covenants or agreements set forth in the Asset Purchase Agreement; or

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if prior to obtaining Stockholder Approval, (A) Buyer shall have received written notice from us to the effect that we intend to terminate the Asset Purchase Agreement in connection with the acceptance of a Superior Approval, (B) our Board or any committee thereof shall have effected an Adverse Recommendation Change or an Intervening Event Change of Recommendation, (C) our Board shall, within five (5) business days of a tender or exchange offer relating to an Acquisition Proposal (whether or not a Superior Proposal) having been commenced, fail to publicly recommend against such tender or exchange offer, (D) our Board shall have failed to publicly reaffirm its recommendation of the transactions contemplated by the Asset Purchase Agreement after any Acquisition Proposal or any material modification thereto is first commenced, publicly announced, distributed or disseminated to our stockholders within five (5) business days after Buyer so requests in writing (or, if the Annual Meeting is scheduled to be held within five (5) business days of such request, within one (1) business day after such request and in any event, prior to the date of the Annual Meeting) or (E) we shall have breached or be deemed to have breached in any material respect our obligations under the Asset Purchase Agreement.

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there has been a breach or failure to perform in any material respect any representation, warranty, covenant or agreement made by Buyer in the Asset Purchase Agreement, or any such representation and warranty shall have become untrue in any material respect, which breach or failure to perform or to be true, either individually or in the aggregate, if occurring or continuing at the closing (A) would result in the failure of any of the conditions set forth in in the Asset Purchase Agreement and (B) cannot be or has not been cured by the earlier of (1) the Outside Date and (2) 30 days after the giving of written notice to Buyer of such breach or failure;

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at any time prior to obtaining Stockholder Approval, in order to accept a Superior Proposal in accordance with the Asset Purchase Agreement; provided, that we shall have (A) simultaneously with such termination entered into the associated Alternative Acquisition Agreement, (B) otherwise complied with all provisions of the Asset Purchase Agreement, including the notice provisions thereof, and (C) paid any Termination Fee due pursuant to the Asset Purchase Agreement; or

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(A) each of the conditions to closing have been satisfied or waived on or prior to the date that the closing should have been consummated (other than those conditions that by their nature are to be satisfied at the closing and which were, as of such date, capable of being satisfied), (B) we have confirmed by irrevocable written notice delivered to Buyer to the effect that (x) we stand ready, willing and able to consummate the transactions contemplated hereby on the date that the closing should have been consummated, (C) Buyer shall have failed to consummate the closing prior to the second business day following the date the closing is required to have occurred (provided, that we are prepared and able to consummate the closing as of such date, including by satisfying those conditions which by their terms are to be satisfied at the closing) and (D) the proceeds of Buyer’s financing for the Asset Sale Transaction are not available to Buyer on the terms set forth in the commitment letters for such financing.

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(i) an Acquisition Proposal (whether or not conditional) or intention to make an Acquisition Proposal (whether or not conditional) is made directly to the Company’s stockholders or otherwise publicly disclosed or otherwise communicated to senior management of the Company or the Board; (ii) the Asset Sale Transaction fails to close by the Outside Date; (iii) Stockholder Approval is not obtained; (iv) there is a breach by the Company of its covenants, agreements, representations or warranties (subject to certain exceptions and qualifiers); and (v) the Asset Purchase Agreement is terminated and after the signing of the Asset Purchase Agreement and prior to the 15 month anniversary of the termination of the Asset Purchase Agreement, the Company consummates the transactions contemplated by any Acquisition Proposal or enters into a definitive agreement providing for the consummation of the transactions contemplated by any Acquisition Proposal or the Company recommends or submits an Acquisition Proposal to the Company’s stockholders for adoption; provided that, for purposes of this bullet only, all percentages in the definition of Acquisition Proposal contained in the Asset Purchase Agreement are replaced with 50%; or

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by Buyer, as a result of (i) receiving notice from the Company of its intent to terminate the Asset Purchase Agreement as a result of a Superior Proposal; (ii) the Board effectuating an Adverse Recommendation Change or an Intervening Event Change of Recommendation; (iii) the Board failing to publicly recommend against a tender or exchange offer relating to an Acquisition Proposal; or (iv) the Board failing to publicly reaffirm its recommendation of the asset purchase following request by Buyer in certain circumstances relating to an Acquisition Proposal; or

•	by the Company if prior to obtaining Stockholder Approval the Company enters into a definitive agreement in connection with a Superior Proposal.

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(a)	To record as of March 31, 2018 (i) the expected net proceeds received from the sale of the Purchased Assets and (ii) the expected gain on the sale of the Purchased Assets pursuant to the terms of the Asset Purchase Agreement:

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(b)	To eliminate the operating activity related to the Purchased Assets which includes, revenue, net of returns, allowance and discounts, cost of revenues and operating expenses:

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•	The majority of our sales to customers are evidenced by firm purchase orders. Generally, title and the risks and rewards of ownership are transferred to the customer when the product is shipped. Payment by the customer is due under fixed payment terms.

•	Product returns are only accepted at our discretion and in accordance with our “Returned Goods Policy”. Historically, the level of product returns has not been significant. We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.

•	Our terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are generally provided for sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.

•	Amounts billed to customers related to shipping and handling charges are included in sales. Shipping and handling costs included in cost of sales were approximately $51 thousand, $192 thousand and $155 thousand for the three months ended March 31, 2018, the twelve months ended December 31, 2017 and the twelve months ended December 31, 2016, respectively.

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•	Executive sessions without management and non-independent directors present are a standing Board agenda item. Executive sessions of the independent directors are held at any time requested by an independent director and, in any event, are held in connection with at least 100% of regularly scheduled Board meetings.

•	The Board regularly meets in executive session with the CEO without other members of management present.

•	All Board committee members are independent directors. The committee chairs have authority to hold executive sessions without management and non-independent directors present.

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(1)	Mr. Waldman has also been designated the Audit Committee’s financial expert as well as the Board’s Lead Independent Director.

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(1)

These columns represent the grant date fair value of the awards as calculated in accordance with FASB ASC 718 (Stock Compensation). Pursuant to SEC rule changes effective February 28, 2010, we are required to reflect the total grant date fair values of the option grants in the year of grant, rather than the portion of this amount that was recognized for financial statement reporting purposes in a given fiscal year which was required under the prior SEC rules, resulting in a change to the amounts reported in prior Annual Reports.

(2)	The Company and Mr. Ewers voluntarily agreed to waive his bonus payment for 2017 of $67,344.

(3)	The Company and Mr. Saron voluntarily agreed to waive his bonus payment for 2017 of $83,119.

(4)	The Company and Mr. Citronowicz voluntarily agreed to waive his bonus payment for 2017 of $56,263.

(5)	Mr. Gershon resigned from all of his positions with the Company effective December 15, 2017. In connection with this departure, unvested options were forfeited in accordance with the terms of the Separation Agreement.

(6)	Mr. McCarthy was terminated without cause from his position with the Company effective November 6, 2017. In connection with this departure, unvested options were forfeited pursuant to the terms of his employment contract and the option agreements.

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(7)	The amounts for 2017 include compensation under the following plans and programs:

(1)	Employment contracts provide for the Executives to remain employed by the Company until such time as their employment is terminated pursuant to the terms of their Employment Agreement.

(a)	Upon the death of the executive, in which case the executive’s estate shall be paid the basic annual compensation due the employee pro-rated through the date of death.

(b)	By the resignation of the executive at any time upon at least thirty (30) days prior written notice to Bovie in which case Bovie shall be obligated to pay the employee the basic annual compensation due him pro-rated to the effective date of termination.

(c)	By Bovie, “for cause” if during the term of the employment agreement the employee violates the non-competition provisions of his employment agreement, or is found guilty in a court of law of any crime of moral turpitude in which case the contract would be terminated and provisions for future compensation forfeited.

(d)

By Bovie, without cause, with the majority approval of the Board, for Mr. Goodwin, Mr. Saron, Mr. Ewers and Mr. Citronowicz at any time upon at least thirty (30) days prior written notice to the executive. In this case Bovie shall be obligated to pay the executive compensation in effect at such time, including all bonuses, accrued or prorated and expenses up to the date of termination. Thereafter for Messrs. Saron and Citronowicz, Bovie shall pay the executive three times the salary in effect at the time of termination payable in one lump sum.

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(e)

If Bovie fails to meet its obligations to the executive on a timely basis, or if there is a change in the control of Bovie, the executive may elect to terminate his employment agreement. Upon any such termination or breach of any of its obligations under the employment agreement, Bovie shall pay Mr. Saron and Mr. Citronowicz a lump sum severance equal to three times the annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of the employment agreement up to the date of termination. Mr. Goodwin and Mr. Ewers shall be paid two times their annual salary and bonus in effect the month preceding such termination or breach as well as any other sums which may be due under the terms of their respective employment agreement up to the date of termination.

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(i)

Based on 33,186,974 outstanding shares of common stock and 4,401,156 outstanding options to acquire a like number of shares of common stock as of July 13, 2018, of which officers and directors owned a total of 456,500 options and 1,444,416 shares at July 13, 2018. We have calculated the percentage on the basis of the amount of outstanding securities plus, for each person or group, any securities that person or group has current or future right to acquire pursuant to options, warrants, conversion privileges or other rights.

(ii)	Includes 611,972 shares and 30,000 vested options out of a total of 30,000 ten year options owned by Mr. Makrides to purchase shares of common stock of the Company at an exercise price of $2.54. These options vest equally over a four year period.

(iii)	Includes 0 shares and 0 vested options out of a total of 1,000,000 ten year options owned by Mr. Goodwin to purchase shares of common stock of the Company. Exercise price for his options is $2.99. These options vest equally over a two year period.

(iv)	Includes 405,940 shares and 66,000 vested options out of a total of 137,000 ten year options owned by Mr. Saron to purchase shares of common stock of the Company at an exercise price ranging from $1.80 to $3.23. These options vest equally over a four year period.

(v)	Includes 426,504 shares and 66,000 vested options out of a total of 137,000 ten year options owned by Mr. Citronowicz to purchase shares of common stock of the Company at an exercise price ranging from $1.80 to $3.23. These options vest equally over a four year period.

(vi)	Includes 34,500 vested options out of a total of 46,500 ten year options owned by Mr. Andres to purchase shares of common stock of the Company at an exercise price ranging from $1.88 to $3.81.

(vii)	Includes 85,000 vested options out of a total of 200,000 ten year options owned by Mr. Ewers to purchase shares of common stock of the Company at an exercise price ranging from $2.13 to $3.63. These options vest equally over a four year period.

(viii)	Includes 62,000 vested options out of a total of 74,000 ten year options owned by Mr. Geraghty to purchase shares of common stock of the Company at an exercise price ranging from $1.88 to $3.81.

(ix)	Includes 113,000 vested options out of a total of 125,000 ten year options owned by Mr. Waldman to purchase shares of common stock of the Company at an exercise price ranging from $1.88 to $3.81.

(x)	Includes 0 vested options out of a total of 12,000 ten year options owned by Mr. Swandal to purchase shares of common stock of the Company at an exercise price of $2.37.

(xi)	Includes 456,500 vested ten year options out of a total of 1,773,500 ten year outstanding options and 1,444,416 shares owned by all Executive Officers and directors as a group. The last date options can be exercised is March 9, 2028.

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(1)	Audit fees consist of fees billed for professional services rendered for the audit of Bovie’s annual financial statements and reviews of its interim consolidated financial statements included in quarterly reports and other services related to statutory and regulatory filings or engagements.

(2)	Audit related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or reviews of Bovie’s consolidated financial statements and are not reported under “Audit Fees”.

(3)	Tax fees consist of fees billed for professional services rendered for tax compliance and tax advice (domestic and international). These services include assistance regarding federal, state and international tax compliance, acquisitions and international tax planning.

(4)	All other fees consist of fees for products and services other than the services reported above.

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