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Aksys, Ltd. was formed to provide hemodialysis products and services for patients suffering from renal failure. Aksys has developed an automated personal hemodialysis system (the "Aksys PHD® System"), which is designed to assist patients in performing hemodialysis in alternate care settings, such as the patient's home, on a more frequent basis than currently practiced. Aksys believes that its products and services will offer a superior alternative to currently available kidney dialysis treatment modalities by enabling a means to achieve better clinical outcomes, which will lower overall costs and improve quality of life for dialysis patients. On March 27, 2002, we announced that we received the Food and Drug Administration's clearance to market the PHD® Personal Hemodialysis System. Aksys has announced commercial launch of its products and services in the 3rd quarter of 2002. ESRD is a slow, progressive loss of kidney function which eventually becomes life-threatening and for most patients can be treated only through dialysis. Based upon information published by the Centers for Medicare and Medicaid Services ("CMS") of the United States Department of Health and Human Services, the approximate number of ESRD patients in the United States requiring dialysis treatments has grown from 66,000 at the end of 1982 to 260,000 at the end of 2000, representing a compound annual growth rate of approximately 8%. The United States Renal Data System is predicting that the number of individuals on dialysis in the U.S. will hit 520,000 by the year 2010, doubling the number of patients receiving treatment at the end of 2000. In addition, according to the international patient registries compiled by the USRDS, there were approximately 450,000 dialysis patients in Europe and Japan in 1999. Reimbursement for dialysis treatments in the United States in 1999 is estimated by Aksys to have exceeded $5 billion. The prevailing methods of kidney dialysis today are hemodialysis delivered in outpatient clinics three times per week and peritoneal dialysis performed by patients at home through the infusion of a blood-cleansing solution into the patient's peritoneal cavity. Both of these treatment methods have significant limitations which have produced relatively poor clinical outcomes, an escalation in total treatment costs, and a decreased quality of life for ESRD patients. These clinical outcomes are reflected in the annual mortality rate of dialysis patients which, in 2000 according to the USRDS, was 24% in the United States. Aksys believes that these circumstances have created significant demand for improved dialysis systems. Aksys believes that hemodialysis performed on a daily basis can significantly improve clinical outcomes, reduce total treatment costs and improve the quality of life of ESRD patients. Daily hemodialysis in the clinical setting for the general dialysis population, however, is not economically feasible under current reimbursement systems and would place even greater burdens on patient lifestyles. Aksys has developed a personal hemodialysis system which is designed to overcome the barriers to daily hemodialysis in home settings. The Aksys PHD System (1) is designed for operation through a computerized, user-friendly interface, (2) is automated, requiring minimal operator involvement, (3) includes an integrated automatic disinfection system which is designed to enable safe and effective reuse of several key components, (4) requires fewer consumables and (5) is relatively compact. All essential components, including the water purification system, are integrated into the system. Aksys holds exclusive licenses to patents relating to certain features of the Aksys PHD System.