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Our Potentiometer has been examined and found desirable and satisfactory by the Bissau of Ships of the Navy Department, and an R & D contract for the completion of this component is expected from the now budget by July."

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Special effort is being made by the management to introduce standard itexXI. We have hírod Mr. Milton Delson, who hàn 10 years experience with Hedicul Electronico, and various other standard electronic components, to set up production and marketing for standard equipment. We are now submitting a proppssl for a $250,000. Orant Project in the research and development of Medicul Electronic equipment.

The cach situation was reviewed and it was pointed out that additional cupitni is required for the projected rate of operation. An amount of $100,000. will cover this year's needa, and it was agreed by both mantgoment and present stockholders that we should proceed with further financial avonues to be properly capitalized. A proposal which had been offered by Minitronics Corp. was discussed. Munitronies had proposed the exchange of. fifty percent of their shares for equal value of Advancement Davices sharos with the tianaferamum of all their equipment ( about $50,000.), $100,000, sauh, und promise for further financial assistance to Advostcument Davicen.

This prɔposition was rejapted in a "round

table" discussion by tha stockholders. Instead, the following proposition was mctioned, voted mid approved:

An additional group of between 70 and 100 shares

to be offered for sale at the price of $1,000 each for immediate financing, and that necessary arrangements be made for a public flotation within four to-five months.

It was also recomended and approved that a Directors' Meeting be held once every two months,

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UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK

(Civ. 62–3900)

ROLAND H. BOGGS, PLAINTIFF, AGAINST WILLIAM J. CASEY, DEFENDANT

PLAINTIFF'S MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT PURSUANT TO RULE 56

Harold, Luca, Persky & Mozer, Attorneys for Plaintiff, 150 Broadway, New York 38, N.Y.

INTRODUCTION

This action arises out of the purchase, by plaintiff, of $10,000 worth of securities from a corporation known as Advancement Devices, Inc. (hereinafter referred to as ADI). The defendant, William J. Casey, was, within the meaning of the Securities Act of 1933, a controlling person of Advancement Devices, Inc. The securities sold to plaintiff were not registered under the Securities Act of 1933 nor were they issued pursuant to an exemption under Regulation A. Plaintiff is a resident of the State of New Jersey. ADI was a New York corporation doing business in New York.

Use of the mails was made during both the offer to sell and the actual sale of the securities.

The complaint alleges two causes of action. The first cause of action alleges a violation of Section 12(1) of the Securities Act of 1933. In essence the claim is that the securities sold to plaintiff were sold in violation of the registration requirements of Section 5 of the 1933 Act. The second cause of action alleges a violation of Section 12(2). Plaintiff claims therein that the prospectus used by ADI omitted material facts and contained false statements of material facts. The liability of defendant, William J. Casey, is based on Section 15 of the 1933 Act which states:

"Every person who, by or through stock ownership, agency, or otherwise, . . controls any person liable under Section 11 or 12, shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability of the controlled person is alleged to exist."

By virtue of documentary evidence and the examinations before trial, plaintiff herein is able to establish that he purchased securities, that the defendant was a controlling person, that no registration statement was filed and that there were material omissions and misstatements in the prospectus.

Section 12 of the 1933 Act gives the plaintiff the right to recover the full amount paid thereon upon tender of the securities to defendant.

THE FACTS

On or about October 28, 1961, the plaintiff, Roland H. Boggs, received through the U.S. Mail a special delivery package containing Exhibits 1 through 6. This material constituted a prospectus pertaining to Advancement Devices, Inc., a New York corporation. The envelope was sent from New York and delivered to plaintiff in New Jersey. (Exhibit 7)

The material was sent by Charles J. Thornton, an associate of the firm of L. H. Rothchild & Co., a broker-dealer and investment banker located at 52 Wall Street, New York 5, New York. (Exhibit 1)

Exhibit 2 was prepared by L. H. Rothchild & Co. It is dated October 25, 1961 and concerns itself with an offering of $100,000 worth of securities to be sold by ADI, of which $75,000 was to be used to repay to defendant monies he had loaned to the company (Exhibit 2; Casey deposition page 10, lines 14-21).

Prior to this time, the plaintiff had no connection with ADI other than a casual relationship with George Doundoulakis, president of Advancement Devices, Inc. which arose in the ordinary course of plaintiff's employment.

Plaintiff is a high school graduate and possesses no particular electronic or technical skills or degrees. He has been actively employed since 1921 by the Western Electric Company and has served in the following capacities: inspector, service clerk, supervisor of production control, and as assistant superintendent in

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