==========================================START OF PAGE 1======


                SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.

LITIGATION RELEASE NO. 15061 / September 23, 1996  

SECURITIES AND EXCHANGE COMMISSION v. FUTREX, INC., FUTREX
MEDICAL INSTRUMENTATION, INC., AND ROBERT D. ROSENTHAL, Civil
Action No. 96-CV-02192  (D.D.C.)

     On September 23, 1996, the Securities and Exchange
Commission filed a fraud action in the United States District
Court for the District of Columbia against Futrex, Inc., Futrex
Medical Instrumentation, Inc. (collectively, "Futrex"), and
Robert D. Rosenthal ("Rosenthal"), Futrex's Chairman of the
Board, Chief Executive Officer, President, and Treasurer.  The
Commission's complaint alleges that Futrex and Rosenthal made
materially false and misleading statements in connection with a
$1.85 million private placement ("private placement") of debt
securities in May and August 1994, and a proposed initial public
offering ("IPO")  of 1.8 million shares of common stock at an
anticipated price of $10 per share.

     The complaint alleges that in connection with both the
private placement and the IPO, Futrex and Rosenthal stated
falsely that Futrex's hand-held "Dream Beam" analyzer could
measure and accurately predict a person's blood glucose level by
passing infrared light through a finger.  However, neither the
Dream Beam nor any other infrared blood glucose analyzer tested
by Futrex has ever been capable of predicting blood glucose
levels accurately.  The complaint further alleges that not one of
Futrex's top scientific and technical employees has ever reviewed
or analyzed any data that would support claims made by Rosenthal
and Futrex that the blood glucose analyzer, as configured by
Futrex, actually works.

     The complaint further alleges that Rosenthal selectively
used data from a study Futrex conducted in 1991 at Mount Sinai
Medical Center to make the results of the study appear to show a
high correlation, unsupported by the data, between infrared scans
and blood glucose levels.  In fact, the complaint alleges, the
Mount Sinai study failed to demonstrate any correlation between
blood glucose and infrared scans.

     The complaint further alleges that, in the fall of 1992,
Futrex conducted unsuccessful studies which tested both a device
called the Futrex 9000 and a version of the Dream Beam, the
portable, hand-held analyzer.  According to the complaint, the
data from the fall 1992 studies was analyzed on a supercomputer
and showed no correlation between infrared scans and blood
glucose levels.  Futrex failed to disclose the adverse results of
the fall 1992 studies in its registration statement and





prospectus.  The complaint further alleges that during the course
of another field study conducted in 1995, Rosenthal knew that the
data being generated in the tests was useless because of a
manufacturing defect in all of the Dream Beams.  Nevertheless,
Rosenthal directed his staff to proceed with the tests in order
to avoid the embarrassing disclosure of the manufacturing defect
to participants in the studies.

     The complaint further alleges that Rosenthal made materially
false and misleading statements to investors during the marketing
of the IPO.  During some of these meetings, Rosenthal
demonstrated a Dream Beam which he said had been custom
calibrated for him.  After the Dream Beam gave a reading,
Rosenthal stated that it appeared to be his correct blood glucose
level based on his knowledge, as a diabetic, of what his blood
sugar level should be.  Before the meetings, however, Rosenthal
directed a Futrex employee to program a Dream Beam to function as
if it were giving a glucose reading, when in fact the reading had
nothing to do with the results of the infrared scan. 
Accordingly, the complaint alleges, the Dream Beam readings
Rosenthal demonstrated at investor meetings were meaningless and
intended solely to deceive potential investors.

     The complaint further alleges that, in 1994, Futrex and
Rosenthal made materially false and misleading statements to
investors in a private placement of debt securities.  The
complaint also alleges that, at meetings with potential
investors, Rosenthal stated falsely that Futrex had shown that
the infrared measurement of blood glucose levels was feasible
with a laboratory instrument, and that Futrex had perfected such
an instrument.  In addition, according to the complaint,
Rosenthal stated falsely that the Dream Beam measured blood
glucose more accurately than conventional finger-poke tests.

     The complaint seeks permanent injunctions against Futrex,
Inc., Futrex Medical Instrumentation, Inc., and Rosenthal,
enjoining them from future violations of antifraud provisions of
the federal securities laws.  The complaint also seeks an order
that Futrex, Inc., pursuant to a plan to be proposed by the
Commission and approved by the Court, offer to investors in the
private placement rescission of their purchases of Futrex debt
securities.  In addition, the complaint seeks civil monetary
penalties from Rosenthal.