Item 2. Properties
ITEM 2. PROPERTIES.
We conduct our domestic operations at three facilities
in Gardner, Massachusetts, one facility in El Paso, Texas, and one facility in Windham, Maine. The facilities in El Paso and Windham
are leased from unrelated parties. The Company leases its primary facility in Gardner, Massachusetts from Equity Assets, Inc. (“EAI”),
an entity formerly owned by the Company’s founder Richard E. Forkey and then later owned by a trust controlled by his step-daughter,
established for the benefit of the step-daughter and four siblings (including Joseph N. Forkey, who is Chief Executive Officer, President,
Treasurer and a Director of the Company). The original lease for the principal facility in Gardner expired in 1999, and the Company has
since been a tenant-at-will, paying rent to EAI of $9,000 per month for that facility. On July 19, 2023, the trust distributed the EAI
shares equally among the five beneficiaries (20% each). Those shareholders then entered into a shareholder agreement under which all
five were elected as directors and under which Joseph N. Forkey has been elected as president. The shareholder agreement provides that
Dr. Forkey will be recused from any matters involving negotiations with the Company, including without limitation any lease negotiations.
Dr. Forkey is not compensated by EAI for his services as president or a director, and his present 20% interest in rents being received
from the Company is $21,600 per year.
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The Company for many years has also been a tenant-at-will
at the other two Gardner facilities, paying rent to unrelated parties.
We believe these facilities in
Gardner, El Paso and Windham are adequate for our current operations and are adequately covered by insurance. Significant increases in
production or the addition of significant equipment additions or manufacturing capabilities in connection with the production of our
line of endoscopes and other products may, however, require improvements to existing facilities or the acquisition or lease of additional
facilities.
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