Note 1:

PVA-EPVA, Inc. is a corporation formed by Paralyzed Veterans of American and Eastern Paralyzed Veterans Association, Inc. The purpose of this corporation is to render services connected with the greeting card program. The capitalization of this new corporation is provided equally by Paralyzed Veterans of America and Eastern Paralyzed Veterans Associa tion, Inc. Each of the two corporations own stock of equal amounts ($225,100.00) and hold notes receivable of equal amounts ($17,500.00). The amounts shown on the Balance Sheet are the initial investment and do not reflect the results of the operations of PVA-EPVA, Inc.

Note 2:

During the fiscal year ending 6/30/75 Paralyzed Veterans of America discontinued the services of American Fund Raising Services, Inc. As a result of this action a suit has been instituted by American Fund Raising Services, Inc. against Paralyzed Veterans of America. It is AFRS' claim that the mailing list which has been compiled for use in contribution appeals on PVA's behalf is the sole property of AFRS. Also AFRS further claims PVA is indebted to it for sums in excess of $68,000.

In response to this suit PVA has filed a counter claim for breach of contract by AFRS. PVA has demanded judgement for:

1. $100,000 for breach of contract and unauthorized mailings.

2. $500,000 for AFRS' wrongful appropriation of PVA's list.

3. Declaratory judgement that PVA is either the sole owner of the list or joint owner with AFRS; that if it be adjudged that PVA and AFRS are joint owners, that AFRS may not rent the list without the prior approval of PVA and that AFRS must account to PVA for one-half of all net rental income.

At this time the litigation is in the initial stage and a prediction of the outcome is not possible.

Note 3:

The Paralyzed Veterans of America publishes a periodical "Paraplegia News" through Robert L. Webb and Associates of Seal Beach, California. The net revenue from the publication during the year amounted to $1,539.43, as shown in the statement "Paraplegia News" included in this report. This statement was prepared on a cash basis and no provision for prepaid advertising or unearned subscriptions was made.

Note 4:

During the current fiscal year a cor. poration, Paralyzed Veterans of America Technology and Research Foundation, was formed. The corporation was organized exclusively for scientific, charitable, and educational purposes for the furthering of technological advances in rehabilitative methods and devices, basic cure research for spinal cord injury and disease, and other areas beneficial to disabled individuals, especially veterans. The corporation has one class of members who are those persons serving on the National Executive Committee of Paralyzed Veterans of America. During the current fiscal year Paralyzed Vet. erans of America remitted to Paralyzed Veterans of America Technology and Research Foundation $250,000 to be used as the Foundation deemed appropriate. This amount is reflected in the grants as shown on the Statement of Functional Expenses.