Expert Report Of Laura B. Stamm

Summary

Exhibit 85 (Document 131-20), filed May 7, 2021, is the Expert Report of Laura B. Stamm dated March 19, 2021, in Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil Action No. 1:20-cv-00658, in the United States District Court for the Eastern District of Virginia, Alexandria Division. The report responds to the Revised Baskett Report, which opined lost profits of $168,574,049 for March 25, 2020 through April 27, 2020. It states that counsel for Chain Bridge and JPMorgan asked Stamm to review and respond to the damages methodology and conclusions. In the summary of opinions the report states that the Revised Baskett Report does not provide the necessary analysis and support to establish that the claimed profits should be considered economic damages.

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EXHIBIT 85

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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA

Alexandria Division

BLUE FLAME MEDICAL LLC,

Plaintiff,
v.

CHAIN BRIDGE BANK, N.A.,
JOHN J. BROUGH, and
DAVID M. EVINGER,

Defendants.
Civil Action No. 1:20-cv-00658

EXPERT REPORT OF LAURA B. STAMM
March 19, 2021

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TABLE OF CONTENTS

I.
QUALIFICATIONS ........................................................................................................... 1
II.
ALLEGATIONS AND ASSIGNMENT ............................................................................ 2
III.
SUMMARY OF OPINIONS .............................................................................................. 4
IV.
BUT-FOR WORLD ANALYSIS ....................................................................................... 5
A.
Economic Conditions of the PPE Marketplace ...........................................................7
B.
The California Order ...................................................................................................9
C.
Subsequent Disputed Transactions ...........................................................................10
1.  Confounding Factors ..................................................................................... 10
2.  Apportionment of Damages by Specific Cause of Harm .............................. 12
V.
QUANTIFICATION OF PROFITS ON DISPUTED TRANSACTIONS ....................... 15
A.
Significant Price Volatility .......................................................................................16
B.
Uncertain Profit Margins ..........................................................................................19
C.
Calculation Errors .....................................................................................................21
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I.
QUALIFICATIONS
1.
I am a current Affiliate and former Managing Principal of Analysis Group, Inc.
(“Analysis Group”), an economics, finance, and strategy consulting firm.  Since the company’s
founding in 1981, it has assisted many of the nation’s largest law firms and corporations on
thousands of cases.  Headquartered in Boston, Massachusetts, Analysis Group has fourteen offices
throughout the U.S., Canada, and Asia with more than 1,000 professionals.
2.
As a consulting economist and accountant, I have conducted damages assessments
and lost profit analyses in over 50 cases involving commercial disputes in a wide range of
industries, including medical equipment and pharmaceutical products, among others.  I have
provided testimony on matters involving legal claims of breach of contract, torts, accounting
malpractice, fraudulent conveyance, and breach of fiduciary duty.  I have directed analyses that
involved gathering and organizing accounting and contract records, determining ex-ante
expectations, analyzing sales trends, assessing profitability, preparing projections, and analyzing
changing market conditions.
3.
I have provided company valuations for those engaged in litigation and to assist
prospective buyers, and have assisted numerous businesses in a variety of industries with the
development of business plans and financial projections, often through the use of complex
integrated financial models.  I have consulted on financial and economic issues related to the
licensing, selling, and alleged unauthorized use of patents, copyrights, trademarks, trade dress, and
trade secrets.  I have also served as an expert witness on damages assessments involving
intellectual property disputes related to reasonable royalty determinations and price erosion.
4.
Prior to joining Analysis Group in 1993, I was a Manager at Price Waterhouse in
Dispute Analysis and Corporate Recovery Services, where I managed several projects involving
the analysis of damages in business litigation.  I also served as a Senior Associate in the Business
Investigation Services division of Coopers & Lybrand providing auditing services, due diligence
analysis in support of mergers and acquisitions, and consulting services to financially distressed
companies.
5.
I received a Bachelor of Arts from Williams College in 1984 and a Master of
Science in Management from the Sloan School of Management at M.I.T. in 1989.  I am a certified
public accountant and am accredited in business valuation by the Association of International
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Certified Professional Accountants (“AICPA”).  My curriculum vitae is attached hereto as
Appendix A.  A list of my testimony in the last four years is attached hereto as Appendix B.
II.
ALLEGATIONS AND ASSIGNMENT
6.
I have been retained by Robbins, Russell, Englert, Orseck, Untereiner & Sauber
LLP, counsel for Defendants Chain Bridge Bank, N.A. (“Chain Bridge”), John J. Brough, and
David M. Evinger (collectively, “Defendants”), as well as by Wilmer Cutler Pickering Hale and
Dorr LLP, counsel for Third-Party Defendant JPMorgan Chase Bank, N.A. (“JPMorgan”), in
connection with the lawsuit Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough,
and David M. Evinger.
7.
Plaintiff Blue Flame Medical LLC (“Blue Flame”)1 brings claims related to a wire
transfer of $456.89 million, related to the State of California’s (“California”) initial deposit to
purchase 100 million N95 masks from Blue Flame for $609.16 million (the “California Order”).2
I understand this wire transfer was sent on March 26, 2020 by California, through its bank
JPMorgan, to Chain Bridge, where Blue Flame had a bank account.3  The wire transfer was
subsequently reversed, and Chain Bridge returned the funds to California.4  I refer to these wire
transfer events collectively as the “California Wire Transactions.”  Blue Flame alleges that Chain
Bridge’s actions resulted in substantial harm to Blue Flame’s business and reputation.5  In
particular, Blue Flame alleges that the reversal of the wire transfer “caused Blue Flame to suffer
damages including, among other harms, its lost profits for the transaction with California, lost

1
Blue Flame Medical LLC is affiliated with Blue Flame Strategies LLC, which had entered into referral fee
agreements with various companies. See, Referral Fee Agreement between Velox Medical, Inc. and Blue Flame
Strategies LLC, dated March 13, 2020, BFM000000675 - 681; Referral Fee Agreement between Healthcom Pacific
Inc. and Blue Flame Strategies LLC, dated March 13, 2020, BFM000000668 - 674; First Amendment and
Addendum to Referral Fee Agreement between Healthcom Pacific Inc. and Blue Flame Strategies LLC, dated
March 25, 2020, BFM000116345 - 346.
2
Complaint, Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil
Action No. 20 Civ 658, In the United States District Court for the Eastern District of Virginia Alexandria Division,
filed June 12, 2020 (“Complaint”), ¶¶ 1-3, 25, 61.
3
Complaint, ¶¶ 1-3 and 61.
4
Fedwire Funds Processor Message, March 26, 2020, CBB00002780; Complaint, ¶ 70.
5
Complaint, ¶ 1.
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future business opportunities with California and other customers, and reputational damage as a
result of the subsequent media coverage of the incident.”6
8.
On February 12, 2021, William T. Baskett submitted an expert report (“Baskett
Report”) on behalf of Plaintiff, in which Mr. Baskett purported to “calculate the profits Blue Flame
would have realized from sales of personal protective equipment (‘PPE’) that were aborted in the
event Blue Flame establishes that those sales would not have been aborted but for actions taken
by” Defendants.7  On March 8, 2021, Mr. Baskett submitted a revised report (“Revised Baskett
Report”) in which he made several corrections to his calculations of lost profits and to his final
opinion of the total lost profits.8  Mr. Baskett opined “that for the period of March 25, 2020 through
April 27, 2020, Blue Flame Medical, LLC has incurred Lost Profits of $168,574,049.”9  In forming
this opinion, Mr. Baskett assumed that Defendants’ alleged actions and statements “depriv[ed]
Blue Flame of capital that it intended to use to finance PPE purchases,” “caused [damage] to Blue
Flame’s supplier relationships,” and caused Blue Flame “reputational harm”10 — and thereby, Mr.
Baskett further assumes, caused Blue Flame’s PPE sales to certain customers not to be successfully
completed.
9.
I have been asked by counsel for Chain Bridge and JPMorgan to review and
respond to the damages methodology and conclusions set forth in the Revised Baskett Report.
10.
All opinions expressed in this report are my own.  In preparing this report, I relied
upon my experience, education, and my work to date in this matter.  A list of the materials that I
considered in preparing my report is attached hereto as Appendix C.
11.
I am being compensated at a rate of $800 per hour for my independent review and
analysis in connection with this case.  Part of the work was performed by employees of Analysis
Group working under my direction and supervision.  These individuals have been billed at their

6
Complaint, ¶ 97.
7
Expert Report of William T. Baskett on Behalf of Plaintiff Blue Flame Medical, LLC, Blue Flame Medical LLC v.
Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil Action No. 20 Civ 658, In the United States
District Court for the Eastern District of Virginia Alexandria Division, filed February 12, 2021 (“Baskett Report”),
¶ 1.
8
Expert Report of William T. Baskett on Behalf of Plaintiff Blue Flame Medical, LLC, Blue Flame Medical LLC v.
Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil Action No. 20 Civ 658, In the United States
District Court for the Eastern District of Virginia Alexandria Division, Revised March 8, 2021 (“Revised Baskett
Report”).
9
Revised Baskett Report, ¶ 7.
10  Revised Baskett Report, ¶ 6.
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standard hourly rates.  I receive as compensation a portion of the fees charged by Analysis Group.
This compensation is not contingent on the nature of my findings or the outcome of this litigation.
III.
SUMMARY OF OPINIONS
12.
This summary provides an overview of my opinions.  I explain the bases for these
opinions in more detail in the sections that follow.  My report reflects the work I have undertaken
to date, which is also informed by my experience and education.
13.
Mr. Baskett has calculated lost profits on a list of customer orders and uncompleted
transactions, including the California Order, given to him by Blue Flame and its Counsel (the
“Disputed Transactions”).11  He was asked to assume that Defendants’ actions caused the Disputed
Transactions to be “aborted.”12  Mr. Baskett concluded, based on a supposed analysis of Blue
Flame’s operations, that Blue Flame could have achieved these profits but for Defendants’ alleged
actions and alleged statements about Blue Flame.13
14.
In my opinion, the Revised Baskett Report does not provide the necessary analysis
and support to establish that these claimed profits should be considered economic damages. Mr.
Baskett has also provided an unreliable calculation of the anticipated profits Blue Flame might
have realized on each of the Disputed Transactions had they been completed.
15.
Based on my analysis of the Revised Baskett Report and documents produced in
this matter, I conclude that Mr. Baskett’s assumption that Blue Flame could have completed the
Disputed Transactions in the contemplated time frame even absent the alleged wrongdoings of
Defendants lacks a factual basis.  Market conditions in the spring of 2020 of heightened demand,
constrained supply, and highly volatile prices all posed significant obstacles to Blue Flame
completing the Disputed Transactions even absent the alleged wrongdoings of Defendants.  Indeed
Blue Flame has stated publicly that factors unrelated to Defendants’ alleged conduct (such as

11  Revised Baskett Report, ¶ 19.  In this report, “Disputed Transactions” refers to entries in Schedule 1 of the Revised
Baskett Report.
12  Revised Baskett Report, ¶ 6.
13  In apparent contradiction, Mr. Baskett stated that he has “assumed that Blue Flame had the capacity to and would
have delivered on the Lost Sales,” but also stated that his “analysis of Blue Flame’s operations … indicates that the
company could have achieved the profitability it envisioned but for Defendants’ actions and the resulting loss of
capital and negative press coverage.” Revised Baskett Report, ¶¶ 8, 33; Deposition of William T. Baskett, March 15,
2021, pp. 12-15, 55-58.
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seizures of PPE items by the Chinese government, and the inability of Blue Flame to meet
customers’ pricing requirements) prevented Blue Flame from fulfilling the majority of the
Disputed Transactions.  I do not find any consideration or analysis of these obstacles, or any
consideration or analysis of Blue Flame’s ability to overcome them, in the Revised Baskett Report.
Without such an analysis, Mr. Baskett has not established his calculation of profits on each of the
Disputed Transactions constitutes economic damages.14
16.
Even assuming it can be established that the orders identified in the Revised Baskett
Report Schedule 1 would have been finalized and completed absent Defendants’ alleged
misconduct, the product catalogues, pricing sheets, and mark-up assumption used by Mr. Baskett
as the basis for his damages inputs are not reliable indicators of what Blue Flame or its customers
would have paid to complete the Disputed Transactions during this period of unprecedented market
challenges.  Given the highly volatile pricing for PPE products at the beginning of the pandemic
and the lack of any certainty with respect to the ultimate transaction prices both for sellers and
buyers, any attempted quantification of potential profits from the Disputed Transactions using
these source documents would be unduly speculative.
17.
My opinions, and the bases for my opinions, are explained in more detail in this
report and the exhibits attached hereto.  My work on this matter is ongoing, and I may supplement
or amend my report should new information become available.  I am prepared to testify at trial on
the topics discussed in this report; I also anticipate using certain demonstrative exhibits at trial to
illustrate and support the concepts described in this report.
IV.
BUT-FOR WORLD ANALYSIS
18.
Economic damages captures the difference between the value the plaintiff would
have received but for the alleged wrongdoings and the actual value the plaintiff did receive.15  A
standard framework for estimating economic damages that arise from alleged misconduct is to
compare the plaintiff’s actual economic position with the plaintiff’s economic position in a
scenario where the alleged misconduct did not take place (or is replaced with the defendant’s

14  Mr. Baskett appears to use the terms “lost profits” and “economic damages” interchangeably.
15  Allen, M.A., Hall, R.E., and Lazear, V.A. (2011), “Reference Guide on Estimation of Economic Damages,” in
National Research Council, Reference Manual on Scientific Evidence: Third Edition (pp. 425-502) (“Allen, et al.,
2011”), at p. 432.
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proper conduct).  The latter represents the world as it would have been but for the alleged wrongful
conduct, or the “but-for world.”
19.
A properly constructed but-for world differs from the actual world only with respect
to the alleged misconduct.  Therefore, properly estimated economic damages isolate only the
losses, if any, caused by the alleged misconduct and do not include losses caused by other
contemporaneous factors (also referred to as “confounding factors”) that would have affected
plaintiff’s economic position even in the but-for world.16
20.
Importantly, unlike economic damages, a simple calculation of anticipated profits
may not consider the impact of confounding factors on profits.  Therefore, a calculation of
anticipated profits is not an adequate measure of damages because, as explained above, a proper
measure of economic damages must exclude the loss of profits that stemmed from confounding
factors.
21.
Mr. Baskett was asked to assume that Defendants’ actions caused the Disputed
Transactions to be “aborted.”17  Specifically, he was asked to assume that each of the Disputed
Transactions was not successfully completed because Defendants’ actions caused those orders to
be aborted by depriving Blue Flame of capital, harming Blue Flame’s supplier relationships, and
injuring Blue Flame’s reputation.18  In other words, Mr. Baskett was asked to assume there were
no confounding factors that could have caused the Disputed Transactions to fail and to simply
calculate estimated profits for each transaction.  While Mr. Baskett’s calculations may have
computed estimated lost profits with this underlying assumption, establishing the amount of
economic damages still requires consideration of how confounding factors may have affected the
ability of Blue Flame to complete the Disputed Transactions in the but-for world.  Mr. Baskett
seemingly agrees.19  In his section entitled “Viability of Claim for Lost Profits,” he states: “Lost
Profits can only be claimed if the entity claiming the Lost Profits had the capacity to fulfill the

16  Allen, et al., 2011, at p. 432.
17  Revised Baskett Report, ¶ 6.  See, also, Deposition of William T. Baskett, March 15, 2021, pp. 12-15, 55-58.
18  Mr. Baskett testified that he did not “perform any analysis of [his] own to determine whether the losses that [he]
calculated were caused by [Defendants].”  Deposition of William T. Baskett, March 15, 2021, pp. 12-13; Revised
Baskett Report, ¶ 6.
19  He testified that “any company that hasn’t got the capacity to do its operations shouldn’t be allowed to claim lost
profits. … [Y]ou have to have the capacity to incur the loss.” Deposition of William T. Baskett, March 15, 2021, pp.
259-260.  See, also, Revised Baskett Report, ¶ 33;
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sales or services requested of it.”20  Although the Baskett Revised Report refers to conducting an
“analysis of Blue Flame’s operations [that] … indicates that the company could have achieved the
profitability it envisioned but for Defendant’s actions,”21 the Revised Baskett Report does not
describe or present any analysis of Blue Flame’s capability to procure scarce PPE items and deliver
them to customers at prices they were willing to pay at a time when I understand global demand
for such items far outpaced supply.
22.
At his deposition, Mr. Baskett admitted that he simply assumed that only
Defendants’ actions, and no other factors, caused the Disputed Transactions not to go forward.22
He also testified that the reason for a Disputed Transaction not being completed, whether if a
customer did not want to move forward with its order, or whether Blue Flame could not deliver
the ordered products, is not relevant to his opinion.23  Mr. Baskett also testified that if a transaction
were not completed for a reason unrelated to Defendants’ alleged actions, someone “could
suggest” that transaction be removed from any estimate of damages,24 and that “[s]ome
investigation would have to go into [an analysis] to determine how much [impact] was done by
defendant, how much was done by other instances.”25  Mr. Baskett’s statements confirm that he
simply calculated Blue Flame’s anticipated profits for each of the Disputed Transactions, but did
not attempt to measure Blue Flame’s economic damages in this case.
A.
Economic Conditions of the PPE Marketplace
23.
Following the outbreak of the COVID-19 pandemic, there was an unprecedented
and unanticipated increase in the demand for PPE items, resulting in constrained supply, and

20  Revised Baskett Report, ¶ 33.
21  Revised Baskett Report, ¶ 33.
22  Mr. Baskett also testified that he “didn’t conduct an investigation” of potential confounding factors. Deposition of
William T. Baskett, March 15, 2021, pp. 57-58, 104-106, 135-136.
23  Deposition of William T. Baskett, March 15, 2021, pp. 54-55.
24  Deposition of William T. Baskett, March 15, 2021, pp. 95-96.
25  Mr. Baskett also testified that an analysis would be needed “[t]o prove one way or the other … what’s the reason
why the sales [were] canceled.” Deposition of William T. Baskett, March 15, 2021, pp. 68-69, 97-99.
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volatile pricing.26  In this section, I briefly present a summary of relevant economic conditions in
the market for PPE as a backdrop for the damages-related discussions that follow.
24.
Demand for PPE increased dramatically following the outbreak of the COVID-19
pandemic.27  For example, U.S. hospitals and healthcare organizations increased purchases of N95
masks by 400 percent, 585 percent, and up to 1,700 percent relative to their pre-pandemic levels
in January, February, and March 2020, respectively.28 Similar demand patterns were occurring in
countries across the world.29  Supply constraints caused by limited production capacities and
shortages of raw materials led to months-long backlogs for orders.30  These demand and supply
factors resulted in extreme price volatility and large price increases for PPE items.  In February
2020, the Director-General of the World Health Organization stated that prices for masks, gowns,
gloves, and other PPE items had increased by up to 20 times.31 In April 2020, these conditions led
to price changes that were “volatile and continue[d] to change daily,” and customers reported
prices fluctuating multiple times within the course of one day.32  Further, domestic access to PPE

26  See, e.g., Expert Report of Mark Faulkner, Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough,
and David M. Evinger, Civil Action No. 20 Civ 658, In the United States District Court for the Eastern District of
Virginia Alexandria Division, dated February 12, 2021 (“Faulkner Report”), ¶¶ 28-30, 34.
27  Faulkner Report, ¶ 28.
28  “COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges,” United States
International Trade Commission, Publication No. 5145, Investigation No. 332-580,” December 2020, available at:
https://www.usitc.gov/publications/332/pub5145.pdf, at pp. 89-90.
29  In February 2020, the Director-General of the World Health Organization said that global demand for masks, gowns,
gloves, and other PPE items had increased “up to 100 times higher than normal.” Nebehay, Stephanie, “Demand for
masks soars 100-fold, disrupting coronavirus fight: WHO,” Reuters, February 7, 2020, available at:
https://www.reuters.com/article/us-china-health-who-masks/demand-for-masks-soars-100-fold-disrupting-
coronavirus-fight-who-idUSKBN20121J.
30  In April 2020 the Asian Development Bank warned that the “PPE supply chain has not been properly functioning”
and that “[t]he dramatic rise in demand for surgical masks, goggles, gloves, and gowns has depleted stockpiles,
prompted significant price increases, and led to production backlogs of 4-6 months in fulfilling orders.” Park, Cyn-
Young, et al., “Global Shortage of Personal Protective Equipment amid COVID-19: Supply Chains, Bottlenecks,
and Policy Implications,” Asian Development Bank, April 2020, available at:
https://www.adb.org/publications/shortage-ppe-covid-19-supply-chains-bottlenecks-policy, at p. 3.
31  Nebehay, Stephanie, “Demand for masks soars 100-fold, disrupting coronavirus fight: WHO,” Reuters, February 7,
2020, available at: https://www reuters.com/article/us-china-health-who-masks/demand-for-masks-soars-100-fold-
disrupting-coronavirus-fight-who-idUSKBN20121J.
32  Berklan, James M., “Analysis: PPE costs increase over 1,000% during COVID-19 crisis,” McKnight’s Long-Term
Care News, April 9, 2020, available at: https://www.mcknights.com/news/analysis-ppe-costs-increase-over-1000-
during-covid-19-crisis/; Rogalski, Jeremy, “Texas’ PPE orders reveal roller coaster pricing early in pandemic,”
KHOU 11, December 28, 2020, available at: https://www.khou.com/article/news/health/coronavirus/state-of-texas-
ppe-orders-reveal-roller-coaster-pricing-early-in-pandemic/285-0b09e50d-30a4-4464-907e-54eae2127f6f.
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items was disrupted due to the U.S. federal government claiming large quantities of U.S.
manufacturers’ PPE production through its use of the Defense Production Act,33 as well as foreign
countries’ export restrictions on PPE items.34  I understand these export restrictions led to reduced
and delayed shipments of PPE items to the United States.35  Great Health, one of Blue Flame’s
asserted supply partners,36 wrote in April 2020 that the Chinese government’s intervention “in the
operations of manufacture and export” of certain PPE items made “it extremely difficult, if not
impossible, for us to fulfill [certain of Blue Flame’s] [o]rder[s] without causing undue delay.”37
B.
The California Order
25.
Mr. Baskett calculated economic damages on the California Order to be
approximately $141.7 million.38  I have reviewed the Expert Report of Mark Faulkner, an expert
in PPE procurement retained by Defendants and JPMorgan in this matter.39  In his report, Mr.
Faulkner assessed whether Blue Flame could have fulfilled California’s order of 100 million N95
masks.40  Mr. Faulkner concludes that Blue Flame could not have fulfilled California’s order of

33  “Defense Production Act,” United States Government Accountability Office, GAO-21-108, November 2020,
available at: https://www.gao.gov/assets/720/710806.pdf, at p. 1. See, also, Faulkner Report, ¶ 59.
34  Between March and April 2020, approximately 65 countries issued bans or restrictions on the export PPE items,
including N95, surgical, and other masks, isolation gowns, hand sanitizer, gloves, and other items. “COVID-19
Temporary Trade Measures,” International Trade Centre Market Access Map, updated January 29, 2021, available
at: https://www macmap.org/covid19; Bradsher, Keith, and Liz Alderman, “The World Needs Masks. China Makes
Them, but Has Been Hoarding Them.,” The New York Times, March 13, 2020, available at:
https://www nytimes.com/2020/03/13/business/masks-china-coronavirus html.
35  See, e.g., O’Keeffe, Kate, et al., “China’s Export Restrictions Strand Medical Goods U.S. Needs to Fight
Coronavirus, State Department Says,” The Wall Street Journal, April 16, 2020, available at:
https://www.wsj.com/articles/chinas-export-restrictions-strand-medical-goods-u-s-needs-to-fight-coronavirus-state-
department-says-11587031203.
36  Letter from Howard Waltzman (Mayer Brown) to Hon. Frank Pallone, Jr. and Hon. Diana DeGette (United States
Congress), Re: Response to Committee Request, dated June 22, 2020, Exhibit A to “Memorandum in Support of
Defendants’ Motion to Dismiss,” Blue Flame Medical LLC v. Chain Bridge Bank, N.A., John J. Brough, and David
M. Evinger, Civil Action No. 20 Civ 658, In the United States District Court for the Eastern District of Virginia
Alexandria Division, filed July 20, 2020 (“Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana
DeGette”), at p. 2.
37  Letter from Great Health to Blue Flame, April 29, 2020, BFM000076873 - 874 at 873.
38  Revised Baskett Report, Schedule 1.
39  I have also reviewed the Rebuttal Expert Report of Marc S. Prisament, an expert in medical procurement and
purchasing retained by Plaintiff in this matter.  Rebuttal Expert Report of Marc S. Prisament, Blue Flame Medical
LLC v. Chain Bridge Bank, N.A., John J. Brough, and David M. Evinger, Civil Action No. 20 Civ 658, In the United
States District Court for the Eastern District of Virginia Alexandria Division, dated March 12, 2021.
40  Faulkner Report, ¶ 9.
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100 million N95 masks within 30, or even 60, days as a result of multiple factors unrelated to the
alleged misconduct, including:41
 Insufficient supply of N95 masks due to production constraints, foreign
countries’ export restrictions on PPE items, and increased demand from buyers
worldwide;
 Particularly constrained supplies of the particular models of N95 masks ordered
by California; and
 Blue Flame’s lack of experience and sophistication in the PPE procurement
industry, and its repeated failures to comply with standard industry practice for
PPE procurement.
26.
All of these factors are independent of the allegations against Defendants.  In
addition, even if Blue Flame could have located a sufficient supply of N95 masks, their
procurement costs may have been different from what Mr. Baskett assumed.  All of these are
confounding factors.  In the but-for world, these factors would have been obstacles that could have
prevented Blue Flame from fulfilling the California Order under the agreed upon terms, and from
recognizing Mr. Baskett’s estimation of profit on the order, or any profit on the order.  Mr.
Baskett’s computed profits on the California Order cannot be construed as damages without
consideration of these confounding factors.
C.
Subsequent Disputed Transactions
1.
Confounding Factors
27.
As discussed, Mr. Baskett relied on a broad set of instructions to assume that
Defendants’ alleged misconduct caused certain orders subsequent to the California Order (the
“Subsequent Disputed Transactions”) not to be successfully completed, and then proceeded to
calculate Blue Flame’s anticipated profits from each of these transactions.  However, as I
discussed, an analysis of economic damages requires consideration of whether the Subsequent
Disputed Transactions would have been fulfilled in the but-for world.  Mr. Baskett merely assumed
they would have been completed.42  I am aware of documents that even Mr. Baskett admitted cast

41  Faulkner Report, ¶ 12.
42  Deposition of William T. Baskett, March 15, 2021, pp. 57-58.
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significant doubt as to whether Blue Flame could have procured and delivered the PPE items from
the Subsequent Disputed Transactions, even in the absence of Defendants’ alleged wrongful
conduct.43
28.
Mr. Baskett included transactions with 29 customers in addition to California (some
with multiple types of PPE included in their transactions) in his Schedule 1.44  As a preliminary
matter, I note that for 21 customers, Blue Flame admits there was no fully executed contract or
purchase order.45  Blue Flame also does not identify any “contract, order, or agreement” with
another seven of these customers.46  In these seven instances, while the customers discussed their
PPE needs with Blue Flame, and in some instances Blue Flame provided sales quotes, the
documents I have seen appear to show that these discussions did not end with these customers
agreeing to purchase PPE items from Blue Flame.  A prospective order with the State of
Washington — the largest of the Subsequent Disputed Transactions — is included among these
seven.  Between April 2 and 7, 2020, Blue Flame and a representative of the State of Washington
discussed Washington’s PPE needs and Blue Flame’s capabilities.  On April 7, 2020, Blue Flame
sent a “sales order” to the customer, on April 9, 2020 it sent a “quote” that the parties discussed,
and on April 13, 2020 it informed the customer that it has “arranged financing to procure
Washington’s need for” PPE.  On April 17 and 18, the customer told Blue Flame that it “would
love to do a deal, but the price quoted … was just way too high” and that other suppliers were
charging less.  Blue Flame then followed up on May 5 and 7, 2020 “to check back here if you
might be interested in the” PPE, but I am unaware of any further communication between the
parties.47  Mr. Baskett has not described or considered any evidence to demonstrate that

43  For example, Mr. Baskett testified that the communication between Blue Flame and Tennessee “doesn’t look
favorably for the plaintiff,” and that communication between Blue Flame and Alabama also “doesn’t look good for
the plaintiff.” Deposition of William T. Baskett, March 15, 2021, pp. 47-50, 53-54, 57-64, 99-100, 193-194, 198-
199.
44  Revised Baskett Report, Schedule 1.
45  See Exhibit 1.  See, also, Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at pp.
4-9.
46  Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at pp. 4-10.
47  Emails between Elena McGrew (Washington) and Mike Gula (Blue Flame) et al., April 2-3, 2020, BFM000024349
- 355 at 349 - 350; Emails between Elena McGrew and Ethan Bearman (Blue Flame) et al., April 7-13, 2020,
BFM000044870 - 872 at 870 - 871; Emails between Elena McGrew and Mike Gula, April 16-18, 2020,
BFM000050658 - 659; Emails from Michael Collins (Blue Flame) to Elena McGrew, May 5-7, 2020,
BFM000082935.  I understand from counsel that Michael Collins is an alias for Mike Gula.
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Washington, or any of these other seven customers, would have agreed to purchase products from
Blue Flame but for Defendants’ alleged actions. (See Exhibit 1).  Those seven customers account
for over 96 percent of Mr. Baskett’s damages estimate for the Subsequent Disputed Transactions.48
29.
In Exhibit 2, I identify the factors cited by either Blue Flame or the prospective
customer for 27 of the Subsequent Disputed Transactions for why an order was not completed.
Common factors include:
 Blue Flame voluntarily refunded payment to customers because of significant
disruptions in the supply chain coming out of China;
 Blue Flame increased the sales price resulting in the customer requesting a
refund;
 The customer requested updates on shipping and cancelled after not receiving
a response; and
 Blue Flame admitted it was unable to source the quantities of PPE at the prices
and within the schedule required by the customer.
30.
If all of these factors are independent of these allegations against Defendants, and
if these factors alone would have prevented Blue Flame from earning profits on the Subsequent
Disputed Transactions, even in the but-for world, then they ought to be excluded from Blue
Flame’s purported damages in this case.  By not considering confounding factors, Mr. Baskett
cannot offer an opinion regarding whether any of the Subsequent Disputed Transactions resulted
in economic damages to Blue Flame.  Instead, his report only measures Blue Flame’s purported
anticipated profits.
2.
Apportionment of Damages by Specific Cause of Harm
31.
I understand that Mr. Baskett simply assumed that some undetermined combination
of three alleged wrongdoings — depriving Blue Flame of capital that it intended to use to finance
PPE purchases for customers; damaging Blue Flame’s supplier relationships; and inflicting
reputational harm associated with Defendants’ statements to third parties and news reports —
caused each of the Disputed Transactions to not be successfully completed.  Mr. Baskett did not
present any analysis or any discussion that attributes the loss of any of the Disputed Transactions

48  Revised Baskett Report, Schedule 1.
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to any specific assumed cause of harm.  If the finder of fact concludes that only one or two of the
allegations can be proven, Mr. Baskett’s analysis is incapable of allocating his claimed lost profits
to only the relevant assumed causes of harm.  Mr. Baskett admitted this limitation of his analysis
in his deposition.49
32.
I understand that it is Plaintiff’s burden to put forward damages, and I have not tried
to parse Mr. Baskett’s claimed economic damages among the various allegations.  However, by
way of example, I present evidence that could be considered to determine whether Defendants’
reversal of the wire transfer and subsequent claimed deprivation of capital is likely to have been
the cause of lost profits for each of the Subsequent Disputed Transactions.  Similarly, I am aware
of evidence that could be considered to determine whether harm to supplier relationships or
reputational harm was likely to have been the cause of lost profits for each of the Subsequent
Disputed Transactions.50
33.
At least 22 of the customers for which Mr. Baskett calculates lost profits made
upfront payments on their orders.51  Mr. Baskett recognized and listed 20 of these customers’

49  When asked if Mr. Baskett is “able to tell us, for the transactions listed on schedule 1, which ones failed for which of
these three reasons,” Mr. Baskett responded: “No.” Deposition of William T. Baskett, March 15, 2021, p. 91. See,
also, Deposition of William T. Baskett, March 15, 2021, pp. 90-93, 108-110, 125-127.
50  For example, on March 27, 2020, which is the day after the California Wire Transactions, Suuchi told Blue Flame
that it “understand[s] things happen” and that it “remain[s] optimistic about orders through other contracts [Blue
Flame] will secure.”  On April 1, 2020, Suuchi emails Blue Flame to check in if there are any more orders and asks
that Blue Flame “[p]lease keep us updated!” if it has any new orders. On March 27, 2020, Great Health provided
Blue Flame with a letter to distribute to prospective customers, which stated that “Blue Flame Medical LLC holds a
preferred status so they receive priority production and allocation [from Great Health] as needed.” On April 3, 2020,
Blue Flame placed a large order with Great Health for products associated with several different customers’ orders.
Then on April 29, 2020, Great Health writes to Blue Flame stating that it wants to take actions “to preserve the
ongoing business relationship between [the] companies under the Agreement which shall remain in full force and
effect.”  Further, public reports regarding Blue Flame’s transaction with California occurred on May 5, 2020, which
post-dates all of the Disputed Transactions listed on the Revised Baskett Report Schedule 1. Email from Suuchi
Ramesh (Suuchi) to Ethan Bearman et al., March 27, 2020, BFM000116903 - 904 at 903; Email from Suuchi
Ramesh to Mike Gula et al., April 1, 2020, BFM000021447; Email from Henry Huang (Great Health) to Mike Gula
and John Thomas (Blue Flame), March 27, 2020, BFM000013991 - 992; Email from Marc Serrio (Blue Flame) to
Joy Xu (Great Health), April 3, 2020, BFM000026012 - 017; Letter from Henry Huang to John Thomas, April 29,
2020, BFM000076873 - 874 at 874; Rosenhall, Laurel, “Exclusive: California wires mask dealer half a billion
dollars, then claws it back,” CalMatters, May 5, 2020, available at:
https://calmatters.org/health/coronavirus/2020/05/california-mask-deal-blue-flame-collapsed-republican-vendor-
maryland-porter-gula-thomas/.
51  19 of these 22 customers made prepayments equal to the entire invoiced amount. Letter from Howard Waltzman to
Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at pp. 5-9; Revised Baskett Report, Schedule 1.
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upfront payments in his Schedule 3.52  These customers’ upfront payments provided Blue Flame
with the capital to purchase the PPE items from suppliers.53  Despite his inclusion of this
information, Mr. Baskett did not acknowledge that the failure to successfully complete these orders
does not seem to be linked to the lack of capital.
34.
Other Subsequent Disputed Transactions which might have required financing
could have been facilitated through Blue Flame Medical’s April 13, 2020 agreement with Atlys
Global Finance, LLC (“Atlys Global”).  The agreement gave Blue Flame Medical access to up to
$500 million in financing to fulfill purchase orders related to services, products, materials, and
equipment needed to respond to the COVID-19 pandemic.54 This financing was available for PPE
transactions between Blue Flame and any state and certain other government entities.55  To that
end, Blue Flame drafted and partially executed notices of assignment for at least five of the
Subsequent Disputed Transactions, including the State of Washington, the State of Rhode Island
(Quonset Development), the Florida State Emergency Operations Center, University Hospital, and
the County of San Mateo California.56 I understand that upon execution by these customers, these

52  Two additional customers, St. John’s Child Wellness Center and the State of Alabama, made upfront payments via
wire transactions, and are not included in Mr. Baskett’s Schedule 3.  The State of Tennessee, which is listed in Mr.
Baskett’s Schedule 3, also made a partial payment via an ACH transaction. Revised Baskett Report, Schedule 3;
Emails between Tim Neiman (St. John’s Child Wellness Center) and Marc Serrio et al., April 28-30, 2020,
BFM000077360 - 365 at 360 - 361; Bank of America Payment Details Report, April 30, 2020, BFM000133932;
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at p. 5.
53  For example, Blue Flame informed San Mateo County, California that it required a pre-payment so that Blue Flame
could “pay [its] manufacturer in full up front.” It similarly informed the Takoma Park Police that pre-payment was
required so that Blue Flame could pay its “manufacturer … at the time the order is placed.” Email from Mike Gula
to Tamara Seney (San Mateo County), April 3, 2020, BFM000081134 - 140 at 135; Email from Claire Cuddy (Blue
Flame) to Ron Hardy (Takoma Park Police), April 1, 2020, BFM000075639 - 643 at 641.
54  The Procurement Funding Term Sheet signed by Blue Flame and Atlys Global indicated that the lender was to be
Recovery Finance IV US, LLC, Recovery Finance III US, LLC, Recovery Finance II Inc., Recovery Finance II US,
LLC, Recovery Finance Limited, or one of its affiliates. Procurement Funding Term Sheet between Atlys Global
and Blue Flame, BFM000002715 - 719 at 715; Notice of Assignment, Acknowledgment and General Obligation
Pledge between Blue Flame and the State of Florida, April 14, 2020, BFM000073172 - 173.
55  Eligible purchase orders included those “to service or supply any of the 50 States, select U.S. cities or U.S.
Territories, [or] Federal Agencies.” Procurement Funding Term Sheet between Atlys Global and Blue Flame,
BFM000002715 - 719 at 716.
56  Notice of Assignment, Acknowledgment and General Obligation Pledge between Blue Flame and the State of
Florida, April 14, 2020, BFM000073172 - 173; Notice of Assignment, Acknowledgment and General Obligation
Pledge between Blue Flame and the County of San Mateo, April 15, 2020, BFM000047291 - 292; Notice of
Assignment, Acknowledgment and General Obligation Pledge between Blue Flame and University Hospital, April
16, 2020, BFM000048369 - 370; Notice of Assignment, Acknowledgment and General Obligation Pledge between
Blue Flame and Rhode Island Emergency Management Agency, April 13, 2020, BFM000200454 - 455; Notice of
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notices of assignment would have entitled Atlys Global to receive payments from Blue Flame’s
customers for their respective purchase orders “in connection with providing [Blue Flame] with
[the] necessary funding.”57  Mr. Baskett made no mention of this funding source or the role it
would have played in mitigating any damages from Defendants’ alleged actions related to the
California Wire Transactions.58
V.
QUANTIFICATION OF PROFITS ON DISPUTED TRANSACTIONS
35.
Even assuming Mr. Baskett could determine that the orders identified in his
Schedule 1 would have been finalized and completed absent Defendants’ alleged misconduct, Mr.
Baskett’s quantification of lost profits is unreliable.  Mr. Baskett calculated Blue Flame’s lost
profits as “Lost Revenue less [Blue Flame’s] Unincurred Incremental Costs,”59 where Unincurred
Incremental Costs includes predominantly Blue Flame’s costs of goods sold (i.e., costs to procure
the products Blue Flame planned to sell to its customers).60  First, Mr. Baskett calculated lost
revenue by multiplying the quantity of PPE he claims would have been sold but for the alleged
misconduct by a sales price that he obtained from the “canceled or unexecuted purchase order,
sales order, or invoice.”61  Then, he subtracted from his estimated lost revenue an estimate of Blue
Flame’s cost of purchasing the product from suppliers, which he either obtained from “Supplier
Product Pricing Sheets” or calculated based on what he claims was Blue Flame’s anticipated mark-
up from “Blue Flame’s Item Cost and Bulk Sales Pricing Sheets.”62  Lastly, he subtracts other
costs Blue Flame would have incurred to complete the transactions to derive his claimed lost-
profits.63  As I discuss in more detail in this section of my report, the product catalogues, pricing

Assignment, Acknowledgment and General Obligation Pledge between Blue Flame and the State of Washington,
April 13, 2020, BFM000044873 - 874.
57  See, e.g., Notice of Assignment, Acknowledgment and General Obligation Pledge between Blue Flame and the State
of Florida, April 14, 2020, BFM000073172 - 173.
58  Mr. Baskett testified that he does not “know anything about” Blue Flame’s financing agreement with Atlys Global.
Deposition of William T. Baskett, March 15, 2021, p. 119.
59  Revised Baskett Report, ¶ 18.
60  Revised Baskett Report, ¶ 16.
61  Revised Baskett Report, ¶ 20.
62  For the California Order, Mr. Baskett instead relied on purchase orders between Blue Flame and its suppliers.
Revised Baskett Report, ¶ 21, Schedule 1.
63  Revised Baskett Report, ¶¶ 25-32.
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sheets, and mark-up assumptions used by Mr. Baskett as the basis for his lost profit inputs are not
reliable indicators of what Blue Flame or its customers would have paid to complete the Disputed
Transactions during this period of unprecedented market challenges.  Given the highly volatile
pricing for PPE products at the beginning of the pandemic and the lack of any reasonable basis to
determine the ultimate transaction prices both for sellers and buyers, Mr. Baskett’s attempted
quantification of the profit on the Disputed Transactions is speculative.
A.
Significant Price Volatility
36.
The State of Tennessee’s order provides an illustrative example for why Mr.
Baskett’s method for determining the price and profit margin at which Blue Flame might have
fulfilled an order is unduly speculative.  The Revised Baskett Report Schedule 1 assumed that Blue
Flame would have sold 500,000 N95 masks to Tennessee at a price of $3.96 from an invoice dated
April 6, 2020.  It also assumed that Blue Flame could have purchased these masks at a price of
$3.12, which Mr. Baskett takes from a Great Health products catalog from April 1, 2020.64
Tennessee made a deposit for the entire order by April 15, 2020 based on the April 6, 2020 invoice
price; however, according to Blue Flame, “[b]etween April 6 and April 15, market prices increased
significantly,” and Blue Flame informed Tennessee that it would need to reprice the goods at then-
current market prices.65  In response, Tennessee requested a refund.66  The Revised Baskett
Report’s methodology is completely untethered to these facts.  It simply assumed the transaction
would have been completed at prices and costs that Blue Flame admits were not plausible.67  It is
impossible to know with any reasonable degree of certainty what price Tennessee might have been
willing to accept, and how much profit margin Blue Flame might have been willing to give up in
order to complete the sale.
37.
The Tennessee example is not unique.  As discussed above in Section IV.A, market
prices for PPE items were highly volatile during March and April 2020.  Mr. Baskett acknowledges

64  Invoice from Blue Flame to Tennessee Emergency Management Agency, April 6, 2020, BFM000071193; Great
Health Products Catalog, April 1, 2020, BFM000069053.
65  Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at p. 5; Email from John Thomas
to Matthew Hayes (Tennessee), April 16, 2020, BFM000054611 - 614 at 612 - 613.
66  Email from Matthew Hayes to John Thomas, April 17, 2020, BFM000054611 - 614 at 611.
67  Mr. Baskett testified that the communication between Blue Flame and Tennessee “doesn’t look favorably for the
plaintiff.”  Deposition of William T. Baskett, March 15, 2021, p. 193-194.
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that “prices were constantly changing” from March to May 2020,68 and even that they “would
change probably sometimes daily.”69  Documents available to Mr. Baskett confirm that various
price indicators Mr. Baskett relied upon were subject to change without notice, and that these
prices did, in fact, change frequently and without warning.  This volatility caused problems for
Blue Flame because it was not able to lock in prices for its purchases.  For example, on April 6,
2020, Marc Serrio, Blue Flame’s Chief Financial Officer, wrote to others at Blue Flame regarding
purchase orders placed with Great Health, “[w]e placed the orders, [Great Health] need[s] to
execute and not hold it up because the prices are always changing between the last quote and the
time we get their PO in.”70  The problem was not limited to Great Health.  Suuchi told Blue Flame
on March 23, 2020 that its quoted “prices are valid 12 hours, since our factories are facing very
high demand.”71
38.
The purchase price volatility in turn caused problems for Blue Flame’s customers
when their price changed unexpectedly.  For example, on April 9, 2020, Ethan Bearman, Blue
Flame’s Chief Legal Officer, wrote to a potential referral partner that “[t]he fluctuating
marketplace can catch deals where the buyer, typically a government agency, expects a price to
hold for days while they work through the bureaucracy to get a payment out the door.  Meanwhile,
the price on the backend increased 25%. … I suspect you get the idea of the margin variability.”72
In response, Blue Flame made clear that item costs on the price sheets that Mr. Baskett relies on
applied for short periods of time, usually no more than one day.  For example, on April 7, 2020,
Ethan Bearman told others at Blue Flame with regard to the bulk order price sheet to “[p]lease
remember that this is the price for today, we’ll honor today’s quote tomorrow ONLY.”73  John
Thomas similarly also told California on April 10, 2020 that Blue Flame “can honor this current
pricing estimate only for another 24 hours.”74  In many cases, it appears that Blue Flame voluntarily

68  Revised Baskett Report, ¶ 23.
69  Deposition of William T. Baskett, March 15, 2021, p. 183.
70  Email from Marc Serrio to Ethan Bearman and John Thomas, April 6, 2020, BFM000113285 - 289 at 285.
71  Email from Suuchi Ramesh to Ethan Bearman et al., March 23, 2020, BFM000012279 - 285 at 283.
72  Email from Ethan Bearman to Pacha Resources, April 9, 2020, BFM000126268 - 270 at 269.
73  Email from Ethan Bearman to John Thomas and Mike Gula, April 7, 2020, BFM000034630.
74  Email from John Thomas to Michael Wong (State of California), April 10, 2020, BFM000109726 - 730 at 726. See,
also, Signal Messages between Ethan Bearman and Mike Gula, March 26, 2020, BFM000202859; Email from Mike
Gula to Mark Bonacci (Recovery Road Addiction Network) et al., April 8, 2020, BFM000036196 - 198 at 197.
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issued refunds to customers because prices had risen so far above the price as of the order date.
For example, Blue Flame told the Takoma Park Police: “[we] are hearing that there is no available
supply of hand sanitizer available in the quantity ordered anywhere near the price quoted at the
time of order.  Rather than continuing to make you wait while we continue to search for the product
that isn’t several times more expensive than your order, at this time we would like to fully refund
your purchase … .”75  This example not only illustrates the fact that price volatility of PPE items
in the spring of 2020 makes price quotes an unreliable estimate of future transaction prices, but it
also shows that price volatility was an important independent obstacle that may have caused Blue
Flame to not realize any profits on any particular transaction.
39.
Despite the price volatility and admitted limitations of any pricing information, the
Revised Baskett Report’s methodology relies on pricing information that may not still have been
valid once payment was made as a basis for the profits Blue Flame would have earned on each
Disputed Transaction.  For some of the Disputed Transactions, the Revised Baskett Report used
pricing information even earlier than the order date, and these prices may have been superseded
by markedly higher prices by the order date.76  Mr. Baskett relied on bulk order price sheets that
predate the Disputed Transactions by days or even weeks as a basis for Blue Flame’s cost to
purchase the goods.77  For example, Mr. Baskett relied on a Great Health product catalogue from
April 1, 2020 to determine Blue Flame’s purchase prices for items he identifies as being ordered
on April 10 (by the State of Rhode Island) and April 15, 2020 (by San Mateo County, California).78
40.
Mr. Baskett asserted that he was “able to accurately determine the price of the
product that Blue Flame would have paid had Blue Flame’s sale not been aborted.”79  Given the

75  Email from Marc Serrio to Ron Hardy, April 24, 2020, BFM000075639 - 643 at 639.
76  For example, the most recent Great Health product catalogue prior to California’s March 25, 2020 order of N95
masks was dated from March 24, 2020.  This March 24, 2020 product catalogue listed N95 masks priced at between
$2.50 and $3.00, depending on the brand.  However, the March 26, 2020 order confirmation between Great Health
and Blue Flame for N95 masks includes a purchase price of $3.30 for N95 masks.  That is, the prices Great Health
charged Blue Flame just two days after the issuance of its latest product catalogue were $0.30-$0.80 higher than
were listed on the outdated product catalogue.  Great Health Products Catalogue, March 24, 2020, BFM000012250;
Email from Henry Huang to Mike Gula, March 26, 2020, BFM000013610 - 611.
77  Mr. Baskett admitted in deposition that the pricing sheets he relies on are less “reliable” than documents that would
be “very specific to that sale.”  Deposition of William T. Baskett, March 15, 2021, p. 153.
78  Revised Baskett Report, ¶ 21 and Schedule 1.
79  Revised Baskett Report, ¶ 23.
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evidence cited above, and the volatile marketplace, it is impossible to make any pricing
determination based on the documents used by Mr. Baskett that is not unduly speculative.
B.
Uncertain Profit Margins
41.
Because Blue Flame did not actually procure the PPE items that it required for most
of the transactions listed in Schedule 1 of the Revised Baskett Report, Mr. Baskett attempted to
estimate the prices “that would have been paid by Blue Flame” had it fulfilled those orders.80  In
all but two instances,81 Mr. Baskett’s estimates rely on two types of documents: (1) product
catalogues from Blue Flame’s alleged supply partner Great Health, and (2) Blue Flame’s item cost
pricing sheets for bulk orders, which Mr. Baskett assumes incorporate a mark-up of 30 percent
over Blue Flame’s supply cost.  Mr. Baskett primarily relies on Great Health product catalogues
for the cost of PPE he assumes would have been obtained by Blue Flame.  Specifically, he
generally takes the listed cost of the PPE item from the most recently published catalogue prior to
the alleged order date.  As discussed above, however, Blue Flame was frustrated by the rapidly
changing prices that meant by the time the customer completed the paperwork and Blue Flame
sent a purchase order to Great Health the price had already changed.  The Revised Baskett Report’s
methodology has no way to capture this marketplace reality, which resulted in numerous cancelled
transactions.
42.
For most of the Disputed Transactions dated on or after April 7, 2020, Mr. Baskett
determined Blue Flame’s purchase price through reference to a Blue Flame Bulk Price Sheet (price
being quoted to customers) and an assumed 30 percent mark-up.  There are three problems with
the use of this information.  First, these price sheets were subject to change as prices were sharply
increasing on a daily basis.  Second, the bulk price list was intended to show prices that customers
would pay to Blue Flame on large orders, which presumably would have been at lower prices as a
result of volume.82  While it would also be reasonable to assume that Blue Flame would receive a
lower price on its large purchases from its suppliers, Mr. Baskett applies this methodology to small

80  Revised Baskett Report, ¶ 21.
81  For the California Order, Mr. Baskett relies on purchase orders between Blue Flame and its suppliers, and for the
State of Colorado’s order, Mr. Baskett relies on a Blue Flame “Cost Price” sheet.  Revised Baskett Report, Schedule
1.
82  Mr. Baskett testified that he “didn’t notice that” Blue Flame’s bulk price lists included language that they only
showed prices related to large orders.  Deposition of William T. Baskett, March 15, 2021, pp. 177-178.
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volume orders, thus understating Blue Flame’s purchase price and overstating the profit margin.
In Exhibit 3, I show the implied mark-up for each of the orders included in Mr. Baskett’s Schedule
1.  Because of the mismatch between the timing of the customer price quotes and the purchase
price source documents, Mr. Baskett’s calculations resulted in implied mark-ups far greater than
30 percent.  Mr. Baskett’s implied average mark-up is 87 percent, with mark-ups as high as 246
percent.
43.
Finally, Mr. Baskett provided no support for his assumed “built-in mark-up of
30%.”83  He testified that he was told by his counsel that Blue Flame’s bulk price lists included a
30 percent mark-up, and although he claims to have “verified one or two items on” one of Blue
Flame’s price lists, Mr. Baskett does not appear to have fully investigated the anticipated margins
for the Subsequent Disputed Transactions.84  I am aware of documents in the record that indicate
an anticipated price mark-up of considerably less than 30 percent for some customers. For
example, Mike Gula told a representative from the State of Rhode Island (Quonset Development)
on April 1, 2020 that Blue Flame “do[es] a 15% markup on purchases.”85  He told a prospective
customer in New York on April 6, 2020 that there is a “10% business fee of what we are selling
for. Strict 10% ceiling,”86 which appears to have been as a result of New York’s rules on price
gouging for PPE items at the time.87
44.
Mr. Baskett claimed he is “able to accurately determine the price of the product that
Blue Flame would have paid had Blue Flame’s sale not been aborted.”88  Given the economic
reality of the marketplace in which there was no certainty as to prices all along the supply chain,

83  Revised Baskett Report, ¶ 21.
84  Mr. Baskett testified that he reviewed two documents, a Blue Flame bulk price sheet and a Blue Flame cost price
sheet, from the same day in verifying the 30 percent assumption.  However, I am unaware of these documents being
available on the same day.  Deposition of William T. Baskett, March 15, 2021, pp. 159-168.
85  Email from Mike Gula to Steven King (Rhode Island, Quonset Development), April 1, 2020, BFM000060331 - 339
at 335.
86  Email from Mike Gula to Cheryl Schlesinger (New York City Department of Sanitation), April 6, 2020,
BFM000037228 - 233 at 232.
87  On March 17, New York’s Department of Consumer and Worker Protection instituted a rule that made it “illegal to
increase prices by 10 percent or more” on “any personal or household good or any service that is needed to prevent
or limit the spread of or treat new coronavirus (COVID-19).” “Department of Consumer and Worker Protection
Issues Emergency Rule That Makes Price Gouging Illegal for Any Item or Service Needed to Limit the Spread of
Coronavirus,” New York City Department of Consumer and Worker Protection Press Release, March 17, 2020,
available at: https://www1 nyc.gov/site/dca/media/pr031720-DCWP-Emergency-Rule-Price-Gouging-Illegal.page.
88  Revised Baskett Report, ¶ 23.
CONFIDENTIAL
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PageID# 2171

21
and the evidence considered above, I conclude that Mr. Baskett’s estimation of the profits that
might have been made on the Disputed Transactions is unduly speculative.
C.
Calculation Errors
45.
The Revised Baskett Report corrected various errors in the Baskett Report.
However, in addition to the methodological flaws discussed above, the Revised Baskett Report
still contains several errors, including:
 Calculating lost profits on components of customers’ orders that Blue Flame
actually fulfilled;89
 Relying on superseded order information;90
 Not using the available pricing data closest in time to an order;91
 Applying incorrect mark-ups to customer orders;92 and
 Applying incorrect prices from Great Health product catalogues.93

89  For example, Mr. Baskett calculated lost profits on the South Carolina Law Enforcement Division’s order of anti-
fog safety face shields even though Blue Flame admits to having “procured and delivered the face shields,” as well
as the Northern Arizona University’s order of surgical masks even though Blue Flame admits to having “shipped
1,000 surgical masks to the University, which the University agreed to accept as a donation.” Revised Baskett
Report, Schedule 1; Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette, at pp. 5-6.
90  For example, Mr. Baskett relied on a superseded April 1, 2020 draft order estimate to the Arizona Department of
Public Safety even though Blue Flame issued a “new estimate with the most current prices” to the customer later
that day. Revised Baskett Report, Schedule 1; Emails between Claire Cuddy and Patricia Blute (Arizona Department
of Public Safety), April 1, 2020, BFM000069397 - 399; Draft Order Estimate from Blue Flame to Patricia Blute,
April 1, 2020, BFM000069332; Draft Order Estimate from Blue Flame to Patricia Blute, April 1, 2020,
BFM000069400 - 401.
91  Mr. Baskett relied on a Great Health product catalogue from April 1, 2020 to estimate Blue Flame’s wholesale
procurement cost for the State of Alabama’s April 8, 2020 order of Makrite-brand N95 masks even though there
exists a Blue Flame pricing sheet for bulk orders from April 8, 2020. Revised Baskett Report, Schedule 1; Blue
Flame Bulk Order Price Sheet, April 8, 2020, BFM000002469 - 470.
92  For the South Carolina Law Enforcement Division’s order of disposable nonwoven safety gowns, Mr. Baskett
divided the retail sales price listed on Blue Flame’s pricing sheet for bulk orders by 1.7 instead of his purported 1.3
(i.e., he applies a 70 percent mark-up instead of a 30 percent mark-up). Revised Baskett Report, Schedule 1. See,
also, Deposition of William T. Baskett, March 15, 2021, p. 230.
93  For the Idaho State Police’s order of Dasheng-brand foldable N95 masks, Mr. Baskett estimated Blue Flame’s
wholesale procurement cost by relying on the average cost of non-Dasheng-brand N95 masks from Great Health’s
March 24, 2020 product catalogue. Revised Baskett Report, Schedule 1; Draft Order Estimate from Blue Flame to
Stephen Srodawa (Idaho State Police), March 30, 2020, BFM000117675 - 676 at 675; Great Health Products
Catalogue, March 24, 2020, BFM000012250.
CONFIDENTIAL
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PageID# 2172

22
Submitted on March 19, 2021

Laura B. Stamm
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 25 of 38
PageID# 2173

Exhibit 1
Unfinalized Subsequent Disputed Transactions
Customer
Order Dates
Lost Profits
[1]
State of Washington
04/09/20
$17,556,579
[2]
State of Rhode Island (Quonset Development)
04/10/20
$2,329,696
[3]
Medical University of South Carolina
04/11/20
$497,345
[4]
Florida State Emergency Operations Center
04/14/20
$1,535,647
[5]
University Hospital
04/15/20
$124,307
[6]
San Mateo County, California
04/15/20
$772,059
[7]
State of Colorado
04/27/20
$3,258,342
Subtotal
$26,073,977
[8]
Idaho State Police
03/30/20
$3,018
[9]
Maryland Department of State Police
03/30/20
$3,267
[10]
Melbourne Airport Police
03/30/20
$1,584
[11]
Florida Department of Law Enforcement
03/31/20
$6,978
[12]
Melbourne Police Department
03/31/20
$151
[13]
Arizona Department of Public Safety
04/01/20
$94
[14]
Iowa DCI Crime Laboratory
04/01/20
$1,326
[15]
Santa Rosa County Sheriffs Office
04/01/20
($2,635)
[16]
North Carolina State Bureau of Investigation
04/02/20
$1,663
[17]
Oklahoma State Bureau of Investigation
04/02/20
$2,153
[18]
Takoma Park Police
04/02/20
$344
[19]
Dixie County Sheriff's Office
04/02/20
$384
[20]
Douglas County Sheriff's Office
04/02/20
$336
[21]
Marion County Sheriff's Office
04/02/20
$1,490
[22]
Northern Arizona University
04/02/20; 04/03/20
$4,004
[23]
Riverside University Health System
04/03/20
$145,697
[24]
State of Alabama
04/06/20; 04/08/20
$453,199
[25]
State of Tennessee
04/06/20
$544,642
[26]
Lone Star College
04/07/20
$281
[27]
North Carolina State Department of Safety
04/07/20
$3,304
[28]
South Carolina Law Enforcement Division
04/10/20
($89,986)
Subtotal
$1,081,293
Total
$27,155,270
No Evidence of Finalized Order
Blue Flame States No "Fully Executed Contract or Purchase Order"
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 26 of 38
PageID# 2174

Exhibit 1
Unfinalized Subsequent Disputed Transactions
Notes:
[A]
Customer, Order Dates, and Lost Profits are from the Revised Baskett Report, Schedule 1.
[B]
Sources:
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]-[28]
Email from Colorado to John Thomas et al. , May 4, 2020, BFM000080369; Email from Ethan Bearman to
John Thomas et al. , May 4, 2020, BFM000080065.
This exhibit combines the product-specific orders listed in Mr. Baskett's Schedule 1 for ease of
exposition.
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Mike Gula et al.  and Elena McGrew, April 2-3, 2020, BFM000024349 - 355 at 349 - 350;
Emails from Michael Collins to Elena McGrew, May 5-7, 2020, BFM000082935. I understand from counsel
that Michael Collins is an alias for Mike Gula.
Emails between Steven King (State of Rhode Island (Quonset Development)) and Mike Gula et al. , April 1-
28, 2020, BFM000060331 - 339 at 331 - 337.
Emails from Brielle Appelbaum et al.  to Lisa Goodlett et al.  (Medical University of South Carolina), April
11-14, 2020, BFM000127087 - 088.
Emails between Virgil Howard et al. (Florida State Emergency Operations Center) and Mike Gula et al. ,
April 13-16, 2020, BFM000047677 - 687 at 677 - 683.
Emails between Mike Gula et al.  and Robert Sharbaugh (University Hospital), April 9-23, 2020,
BFM000056355 - 372 at 355 - 364.
Emails between Ethan Bearman et al.  and Tamara Seney (San Mateo County), April 2-15, 2020,
BFM000047399 - 416 at 399 - 415; Email from Michael Collins to Tamara Seney, May 5, 2020,
BFM000081134 - 140 at 134.
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 27 of 38
PageID# 2175

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[1] Idaho State Police
03/30/20
$3,018
"There are a lot of fraudulent offerings and support to federal and state agencies for PPE going on right
now, and your business's continued lack of providing us firm and accurate shipping status with
tracking numbers is beginning to make us very weary. Please provide me with true and accurate
shipping status, including tracking number via UPS or FedEx, no later than 1500 Mountain Standard
Time today, or we will need this order canceled and a full refund returned." (Customer)
"[T]here have been significant disruptions in the supply chain coming out of China and unfortunately,
we are not immune. ... [W]e are unable to fulfil your order in a timely manner." (Blue Flame)
[2] Maryland Department
of State Police
03/30/20
$3,267
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Department required." (Blue Flame)
[3] Melbourne Airport
Police
03/30/20
$1,584
"Unfortunately, the N95 masks and hand sanitizer you ordered is no longer available and we'd like to
immediately process your refund with your permission." (Blue Flame)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Department required." (Blue Flame)
[4] Florida Department
of Law Enforcement
03/31/20
$6,978
"I have not received an update. At this time, I would like to just request a refund for this order please."
(Customer, two days after asking for an update on order status)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Department required." (Blue Flame)
[5] Melbourne Police
Department
03/31/20
$151
"Blue Flame procured and delivered the digital thermometers and the face shields, but it was unable to
procure the bottles of hand sanitizer and surgical masks at the price and within the schedule the
Department required." (Blue Flame)
[6] Arizona Department
of Public Safety
04/01/20
$94
"Unfortunately, we still don't have good news for you, hand sanitizer remains tremendously
backlogged and we don't have a delivery date from our manufacturer. At this point it's best that we
refund the rest of your payment."(Blue Flame)
"Blue Flame was unable to source such small quantities of hand sanitizer at the prices and within the
schedule the Department required." (Blue Flame)
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 28 of 38
PageID# 2176

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[7] Iowa DCI Crime
Laboratory
04/01/20
$1,326
"I haven't heard anything. Are you able to cancel the order for me?" (Customer, three days after asking
for an update on order status)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Crime Laboratory required." (Blue Flame)
[8] Santa Rosa County
Sheriffs Office
04/01/20
($2,635)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Sheriff’s Office required." (Blue Flame)
[9] North Carolina State
Bureau of
Investigation
04/02/20
$1,663
"[T]here have been significant disruptions in the supply chain coming out of China, and unfortunately
we are not immune. ... In light of the current situation and rather than continue to wait until we have an
answer from out manufacturer, we want to get your money back until we can be assured a delivery is
possible." (Blue Flame)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Bureau required. Blue Flame issued a full refund to the Bureau on April 23, 2020." (Blue Flame)
[10] Oklahoma State
Bureau of
Investigation
04/02/20
$2,153
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Bureau required." (Blue Flame)
[11] St. John's Child
Wellness Center
04/02/20
($55,741)
"St. John’s placed an order for nitrile gloves, hand sanitizer, disposable caps and gowns, and surgical
masks. Blue Flame procured and delivered the nitrile gloves, but it was unable to source the remaining
PPE at the prices and within the time frame required by St. John’s." (Blue Flame)
[12] Takoma Park Police
04/02/20
$344
"We have had extensive discussions with our manufacturers over the last few days and are hearing that
there is no available supply of hand sanitizer available in the quantity ordered anywhere near the price
quoted at the time of order. Rather than continuing to make you wait while we continue to search for
product that isn't several times more expensive than your order, at this time we would like to fully
refund your purchase ... ." (Blue Flame)
"Blue Flame was unable to source such small quantities of hand sanitizer at the prices and within the
schedule the Department required." (Blue Flame)
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 29 of 38
PageID# 2177

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[13] Dixie County
Sheriff's Office
04/02/20
$384
"[T]here have been significant disruptions in the supply chain coming out of China, and unfortunately
we are not immune. ... In light of the current situation and rather than continue to wait until we have an
answer from out manufacturer, we want to get your money back until we can be assured a delivery is
possible." (Blue Flame)
"Blue Flame was unable to source such small quantities of digital thermometers and hand sanitizer at
the prices and within the schedule the Sheriff’s Office required." (Blue Flame)
[14] Douglas County
Sheriff's Office
04/02/20
$336
After being asked twice for an order status update, Blue Flame said: "We checked again with our
manufacturer, unfortunately they still cannot commit to a delivery date for your order. Rather than
continuing to make you wait, we would like to immediately process a refund to the credit card used for
the purchase, inclusive of processing fees." (Blue Flame, after being asked twice for an update on
order status)
"Blue Flame was unable to source such small quantities of digital thermometers at the prices and
within the schedule the Sheriff's Office required." (Blue Flame)
[15] Marion County
Sheriff's Office
04/02/20
$1,490
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Sheriff’s Office required." (Blue Flame)
[16] Northern Arizona
University
04/02/20;
04/03/20
$4,004
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the University required. Accordingly, after discussion with the University, Blue Flame issued a full
refund on May 8, 2020." (Blue Flame)
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 30 of 38
PageID# 2178

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[17] Riverside University
Health System
04/03/20
$145,697
"Blue Flame Medical heard from the CEO of our main Chinese supplier, from where your order was
sourced. He said ... the Chinese government nationalized all N95 production and forced re-certification
of all factories. As such, the supplier invoked force majeur yesterday and canceled our contract. We
are feverishly working on sourcing alternate suppliers to fulfill your order." (Blue Flame). "At this
time the goods that the County ordered from Blue Flame Medical early in April are overdue for
delivery, have not been received and you now advise are not available from the supplier you identified
during the negotiations. Therefore the County is cancelling the order ... ." (Customer reply)
"On April 29, Great Health informed Blue Flame that it could not deliver the N95 masks because of
the actions of the Chinese Government. Blue Flame also encountered difficulty procuring the
remaining goods at the prices and within the schedule Riverside required. After being informed of
these  developments, Riverside requested a full refund." (Blue Flame)
[18] State of Alabama
04/06/2020;
04/08/2020
$453,199
"I have tried to use every resource even working with another firm to source the supply. ... I cant wait
another day and we must issue a full and complete refund within 48 hours." (Blue Flame)
"Blue Flame was unable to procure the ordered goods at the prices and within the schedule Alabama
required." (Blue Flame)
[19] State of Tennessee
04/06/20
$544,642
"[O]ur cost from the manufacturer has gone up significantly since the original price quote to when we
received the funds from the state. So much so that Blue Flame Medical would actually take a loss if we
did this transaction." (Blue Flame). Blue Flame offered to issue a refund or proceed with the
transaction at a higher sales price. Tennessee then "request[ed] a full refund of all monies paid."
(Customer)
"Between April 6 and April 15, market prices increased significantly. Upon receipt of the full deposit
on April 15, Blue Flame informed Tennessee that, because of significant global market shifts in
pricing, Blue Flame could either order the goods at then-current prices or issue a full refund.
Tennessee requested a refund." (Blue Flame)
[20] Lone Star College
04/07/20
$281
"Blue Flame procured and delivered the KN95 masks and the face shields, but it was unable to procure
the nitrile gloves at the price and within the schedule the College required." (Blue Flame)
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 31 of 38
PageID# 2179

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[21] North Carolina State
Department of Safety
04/07/20
$3,304
"Unfortunately, the N95 masks and hand sanitizer you ordered is no longer available and we'd like to
immediately process your refund with your permission." (Blue Flame)
"Blue Flame was unable to source such small quantities of PPE at the prices and within the schedule
the Department required." (Blue Flame)
[22] State of Washington
04/09/20
$17,556,579
"The price quoted by [Blue Flame] was just way too high." (Customer)
[23] South Carolina Law
Enforcement Division
04/10/20
($89,986)
"Blue Flame procured and delivered the face shields, but it was unable to procure the remaining goods
at the prices and within the schedule the Division required." (Blue Flame)
[24] Florida State
Emergency
Operations Center
04/14/20
$1,535,647
"Can you please resend [the sales quote] with spec sheets attached? We need to have for vetting
purposes. Subsequent to that, we will submit for need/approval/non-approval." (Customer)
"If [our Logistics desk] decide[s] they want your product they will reach out to you accordingly."
(Customer)
[25] University Hospital
04/15/20
$124,307
Regarding possible payment terms, "I asked for N10 terms, not for financing. The point of the request
is that I want to see the product on our dock before payment. Giving your lender a 100% security
interest in the goods defeats the entire purpose. We cannot execute this." (Customer)
"[W]e were unable to receiv[e] [a]dvanced financing from our bank to purchase the order. We
apologize." (Blue Flame)
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 32 of 38
PageID# 2180

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
Customer
Order Dates
Lost Profits
Reasons For Transactions Not Completed
[26] San Mateo County,
California
04/15/20
$772,059
Regarding shipping logistics, "But have you actually secured airfreight space and costs? Whats the
current price and guaranteed lead-time[?]" (Customer) "I'm skeptical about the freight cost and
predictability." (Customer)
Regarding possible payment terms, "So your company has net 60 terms and the County would be
obligated to encumber the full amount of its PO up front without guarantee of either shipping cost or
delivery date? ... I'll give the documents to legal but I think they'll be concerned about the lack of a
timeframe and solid cost." (Customer) "Can you put together a quote with your company's name on it?
The document that you sent looks like an order YOU'D be placing. Can you accept net terms (if so-
please define)? Can you get these items into the US and through customs right away[?]" (Customer)
[27] State of Colorado
04/27/20
$3,258,342
"After reviewing your submitted quotation regarding product details, pricing and more, the State of
Colorado has decided to decline moving forward with issuing a PO at this time." (Customer)
"[Colorado] will not be ordering from [Blue Flame]. Specifically the news over the weekend ... . And
then added that they could get lower pricing elsewhere as well." (Blue Flame)
Total
$24,272,487
Note:
[A]
Sources:
[1]
[2]
[3]
[4]
[5] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Randy Byrne (Idaho State Police) and Marc Serrio (Blue Flame), Paris Pope (Blue Flame), and Ethan Bearman (Blue Flame), April 21, 2020,
BFM000054264 - 267 at 264; Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Brielle Appelbaum (Blue Flame) to Sean Riordan (Melbourne Airport Police) and Marc Serrio, May 11, 2020, BFM000087719 - 721 at 720;
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Jennifer Miller (Florida Department of Law Enforcement) and Paris Pope, April 21-23, BFM000075328 - 330 at 328; Letter from Howard
Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
This exhibit combines the product-specific orders listed in Mr. Baskett's Schedule 1 for ease of exposition.
From Revised Baskett Report, Schedule 1
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 33 of 38
PageID# 2181

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
[6]
[7]
[8]
[9]
[10] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
[11] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
[12]
[13]
[14]
[15] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
[16] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
[17]
[18]
[19]
[20] Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
[21]
[22]
[23]
[24]
[25]
[26]
Email from Marc Serrio to Patricia Blute (Arizona Department of Public Safety) and Claire Cuddy (Blue Flame), April 28, 2020, BFM000077698 - 709 at
699; Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Bruce Reeve (Iowa DCI Crime Laboratory) and Paris Pope, May 5-8, 2020, BFM000083538 - 540 at 538; Letter from Howard Waltzman to
Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Marc Serrio to Brent Culbertson (North Carolina State Bureau of Investigation), April 22, 2020, BFM000075179 - 180 at 179; Letter from Howard
Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Marc Serrio to Ron Hardy (Takoma Park Police), April 24, 2020, BFM000075639 - 643 at 639; Letter from Howard Waltzman to Hon. Frank
Pallone, Jr. and Hon. Diana DeGette.
Email from Marc Serrio to Scotty Osteen (Dixie County Sheriff's Office), April 22, 2020, BFM000075173 - 174 at 173; Letter from Howard Waltzman to
Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Mathew Martin (Douglas County Sheriff's Office), Claire Cuddy, and Marc Serrio, April 22-28, 2020, BFM000076541 - 544 at 541 - 542;
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Brielle Appelbaum to Angela Hayes (North Carolina Department of Public Safety) and Marc Serrio, May 11, 2020, BFM000085325 - 326 at 325;
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Ethan Bearman to Suzanna Hinckley (Riverside University Health System), April 30, 2020, BFM000134116 - 119 at 118; Letter from Howard
Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Mike Gula (Blue Flame) to Julia Pickle (State of Alabama), April 29, 2020, BFM000063226; Letter from Howard Waltzman to Hon. Frank
Pallone, Jr. and Hon. Diana DeGette.
Emails between Mathew Hayes (State of Tennessee) and John Thomas (Blue Flame), April 16-17, 2020, BFM000054611 - 614; Letter from Howard
Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Emails between Ethan Bearman et al.  and Tamara Seney (San Mateo County), April 14-15, 2020, BFM000047399 - 416 at 399, 407; Emails from Tamara
Seney to Mike Gula, April 14-15, 2020, BFM000048551 - 567 at 554, 557.
Letter from Howard Waltzman to Hon. Frank Pallone, Jr. and Hon. Diana DeGette.
Email from Elena McGrew (State of Washington) to Mike Gula, April 17, 2020, BFM000050658 - 659 at 659.
Emails between Virgil Howard et al. (Florida State Emergency Operations Center) and Mike Gula et al.,  April 14-16, 2020, BFM000047677 - 687 at 677 -
678.
Email from Robert Sharbaugh (University Hospital) to Mike Gula et al.,  April 16, 2020, BFM000056355 - 372 at 359; Email from Mike Gula to Angela
Gibbons (University Hospital) et al ., May 4, 2020, BFM000135372 - 383 at 372.
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 34 of 38
PageID# 2182

Exhibit 2
Stated Reasons For Subsequent Disputed Transactions Not Being Successfully Completed
[27] Email from Colorado to John Thomas et al. , May 4, 2020, BFM000080369; Email from Ethan Bearman to John Thomas et al. , May 4, 2020,
BFM000080065.
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 35 of 38
PageID# 2183

Exhibit 3
Mr. Baskett's Implied Pricing Mark-ups for the Disputed Transactions
Customer
Order Date
Product Name and Description
 Retail
Sales Unit
Price
 Wholesale
Purchase
Unit Price
Implied
Pricing
Mark-up
State of California
03/25/20
N95 Protective Mask
$4.76
$3.33
43.0%
Idaho State Police
03/30/20
N95 Protective Mask - Cup Full Respirator
$6.23
$2.81
122.1%
Idaho State Police
03/30/20
N95 Protective Mask - (foldable )
$6.69
$2.70
147.8%
Idaho State Police
03/30/20
Surgical Masks - Sterile 10 pcs/pack
$1.03
$0.59
74.6%
Maryland Dept of State Police
03/30/20
N95 Protective Mask - (foldable ) - Dasheng
$6.69
$2.90
130.7%
Maryland Dept of State Police
03/30/20
16.9 oz bottles of hand sanitizer
$5.24
$2.76
89.9%
Maryland Dept of State Police
03/30/20
Surgical mask- Sterile 10 pcs/pack
$1.03
$0.59
74.6%
Maryland Dept of State Police
03/30/20
Disposable Nonwoven Safety Coverall
$12.00
$5.80
106.9%
Maryland Dept of State Police
03/30/20
Digital thermometers
$77.96
$40.00
94.9%
Melbourne Airport Police
03/30/20
N95 Protective Mask - Foldable - Dasheng
$6.69
$2.90
130.7%
Melbourne Airport Police
03/30/20
16.9 oz bottles of hand sanitizer
$5.24
$2.76
89.9%
Florida Dept of Law Enforcement
03/31/20
N95 Protective Mask - Cup Full Respirator - Makrite
$6.87
$3.30
108.2%
Florida Dept of Law Enforcement
03/31/20
Face Shields - Antifog
$4.50
$1.70
164.7%
Florida Dept of Law Enforcement
03/31/20
16.9 oz bottles of hand sanitizer
$9.54
$2.76
245.7%
Florida Dept of Law Enforcement
03/31/20
Disposable caps
$0.35
$0.18
94.4%
Florida Dept of Law Enforcement
03/31/20
Disposable shoe covers
$0.74
$0.38
94.7%
Melbourne Police Dept
03/31/20
16.9 oz bottles of hand sanitizer
$5.24
$2.76
89.9%
Melbourne Police Dept
03/31/20
Surgical mask- Sterile 10 pcs/pack
$1.03
$0.66
56.1%
Arizona Dept of Public Safety
04/01/20
1 oz bottles of hand sanitizer
$0.90
$0.47
91.5%
Arizona Dept of Public Safety
04/01/20
2 oz bottles of hand sanitizer
$1.20
$0.63
90.5%
Iowa DCI Crime Laboratory
04/01/20
Surgical Masks - Sterile 10 pcs/pack - Xin Lun
$1.33
$0.66
101.5%
Santa Rosa County Sheriffs Office
04/01/20
N95 Protective Mask - Cup Full Respirator - Makrite
$6.87
$3.10
121.6%
Santa Rosa County Sheriffs Office
04/01/20
Disposable shoe covers
$0.74
$0.38
94.7%
Santa Rosa County Sheriffs Office
04/01/20
Coveralls
$1.28
$5.80
(77.9%)
North Carolina State Bureau of Investigation
04/02/20
2 oz bottles of hand sanitizer
$1.86
$0.63
195.2%
North Carolina State Bureau of Investigation
04/02/20
16.9 oz bottles of hand sanitizer
$9.54
$2.76
245.7%
North Carolina State Bureau of Investigation
04/02/20
Disposable shoe covers
$0.74
$0.38
94.7%
North Carolina State Bureau of Investigation
04/02/20
Surgical Masks - Sterile 10 pcs/pack
$1.33
$0.66
101.5%
Oklahoma State Bureau of Investigation
04/02/20
N95 Protective Mask - Cup Full - Makrite
$6.87
$3.10
121.6%
Oklahoma State Bureau of Investigation
04/02/20
Surgical Masks - Sterile 10 pcs/pack
$1.33
$0.66
101.5%
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 36 of 38
PageID# 2184

Exhibit 3
Mr. Baskett's Implied Pricing Mark-ups for the Disputed Transactions
Customer
Order Date
Product Name and Description
 Retail
Sales Unit
Price
 Wholesale
Purchase
Unit Price
Implied
Pricing
Mark-up
St. John's Child Wellness Center
04/02/20
16.9 oz bottles of hand sanitizer
$9.04
$2.76
227.5%
St. John's Child Wellness Center
04/02/20
2 oz bottles of hand sanitizer
$1.07
$0.63
69.8%
St. John's Child Wellness Center
04/02/20
Disposable caps
$0.35
$0.18
94.4%
St. John's Child Wellness Center
04/02/20
Disposable surgical gowns - non sterile
$1.82
$0.96
89.6%
St. John's Child Wellness Center
04/02/20
Surgical Masks, ASTM level 2 ear loop
$0.12
$0.66
(82.3%)
Takoma Park Police
04/02/20
2 oz bottles of hand sanitizer
$1.86
$0.63
195.2%
Takoma Park Police
04/02/20
27 oz bottles of hand sanitizer
$13.67
$4.04
238.4%
Dixie County Sheriff's Office
04/02/20
16.9 oz bottles of hand sanitizer
$9.54
$2.76
245.7%
Dixie County Sheriff's Office
04/02/20
27 oz bottles of hand sanitizer
$13.67
$4.04
238.4%
Dixie County Sheriff's Office
04/02/20
Digital Forehead Infrared Thermometers
$77.96
$40.00
94.9%
Douglas County Sheriff's Office
04/02/20
Digital Forehead Infrared Thermometers
$77.96
$40.00
94.9%
Marion County Sheriff's Office
04/02/20
N95 Protective Mask - Cup Full Respirator - Makrite
$6.87
$3.10
121.6%
Northern Arizona University
04/02/20
N95 Protective Mask - (foldable ) - Dasheng
$6.89
$3.11
121.5%
Northern Arizona University
04/03/20
2 oz bottles of hand sanitizer
$1.86
$0.63
195.2%
Northern Arizona University
04/03/20
Surgical Masks - Sterile 10 pcs/pack
$1.33
$0.66
101.5%
Riverside University Health System
04/03/20
N95 Protective Mask - Cup Full Respirator - Makrite
$4.76
$3.10
53.5%
Riverside University Health System
04/03/20
Disposable caps
$0.34
$0.18
88.9%
Riverside University Health System
04/03/20
Disposable shoe covers
$0.63
$0.38
65.5%
State of Alabama
04/06/20
N95 Protective Mask , Sekura (Makrite)
$3.96
$3.10
27.7%
State of Tennessee
04/06/20
N95 Protective Mask - (foldable ) 20 pcs/box
$3.96
$3.12
26.9%
State of Tennessee
04/06/20
Gowns (non-sterile) isolation
$1.22
$0.96
27.1%
Lone Star College
04/07/20
Disposable Nitrile Gloves
$13.98
$8.67
61.3%
North Carolina State Dept of Safety
04/07/20
N95 Protective Mask - Cup Full Respirator - Makrite
$6.98
$3.10
125.2%
North Carolina State Dept of Safety
04/07/20
2 oz bottles of hand sanitizer
$1.86
$0.63
195.2%
State of Alabama
04/08/20
N95 Protective Mask , Sekura (Makrite)
$3.96
$3.10
27.7%
State of Alabama
04/08/20
Disposable Isolation Gowns, non-sterile
$1.22
$2.02
(39.7%)
State of Alabama
04/08/20
Disposable Nitrile Gloves, box of 100
$8.68
$8.35
3.9%
State of Washington
04/09/20
Disposable surgical gowns - sterile
$10.43
$4.40
137.0%
State of Washington
04/09/20
Disposable isolation gowns - non sterile
$3.42
$2.63
30.0%
South Carolina Law Enforcement Division
04/10/20
Anti Fog Safety Face Shields
$4.62
$1.70
171.8%
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 37 of 38
PageID# 2185

Exhibit 3
Mr. Baskett's Implied Pricing Mark-ups for the Disputed Transactions
Customer
Order Date
Product Name and Description
 Retail
Sales Unit
Price
 Wholesale
Purchase
Unit Price
Implied
Pricing
Mark-up
South Carolina Law Enforcement Division
04/10/20
16.9 oz bottles of hand sanitizer
$9.54
$2.76
245.7%
South Carolina Law Enforcement Division
04/10/20
Surgical mask- Sterile 10 pcs/pack - ear loop
$1.35
$0.56
140.4%
South Carolina Law Enforcement Division
04/10/20
Disposable Nonwoven Safety GOWN
$5.36
$18.35
(70.8%)
State of Rhode Island (Quonset Development)
04/10/20
Disposable surgical isolation gowns - sterile
$10.02
$4.40
127.7%
State of Rhode Island (Quonset Development)
04/10/20
Reg. Medical Face Mask
$0.75
$0.56
34.3%
State of Rhode Island (Quonset Development)
04/10/20
Digital Forehead Infrared Thermometers
$48.33
$40.00
20.8%
Medical University of South Carolina
04/11/20
Antifog Safety Face Shield
$2.14
$1.70
25.9%
Medical University of South Carolina
04/11/20
Box of 100 Nitrile Gloves - Medium
$10.43
$8.35
24.9%
Medical University of South Carolina
04/11/20
Box of 100 Nitrile Gloves - Large
$10.43
$8.35
24.9%
Medical University of South Carolina
04/11/20
Box of 100 Nitrile Gloves - XLarge
$10.43
$8.35
24.9%
Florida State Emergency Operations Center
04/14/20
N95 Protective Mask - Full Cup
$5.01
$3.85
30.0%
Florida State Emergency Operations Center
04/14/20
Disposable isolation gowns - non sterile
$3.42
$2.63
30.0%
University Hospital
04/15/20
Disposable isolation gowns - non sterile
$3.42
$2.63
30.0%
University Hospital
04/15/20
Medical Surgical Mask -non sterile
$0.81
$0.58
40.4%
San Mateo County, California
04/15/20
N95 Protective Mask - Full Cup
$5.05
$3.85
31.0%
San Mateo County, California
04/15/20
Disposable Nitrile Gloves size large - box of 100
$10.86
$8.35
30.0%
San Mateo County, California
04/15/20
Anti Fog Safety Goggle
$3.38
$2.60
30.0%
San Mateo County, California
04/15/20
Anti Fog Safety Face Shield
$2.21
$1.70
30.0%
San Mateo County, California
04/15/20
Disposable isolation gowns - non sterile
$3.42
$2.63
30.0%
State of Colorado
04/27/20
N95 Protective Mask - Cup Full Respirator
$5.38
$4.35
23.6%
State of Colorado
04/27/20
KN95 Protective Mask - Zhejiang Baiyi
$2.52
$2.20
14.5%
State of Colorado
04/27/20
Surgical Masks - Sterile
$0.75
$0.62
21.0%
State of Colorado
04/27/20
Nitrile Gloves - 100 pcs per box
$17.98
$12.50
43.8%
State of Colorado
04/27/20
Disposable Isolation Gowns, sterile
$9.28
$8.02
15.7%
Notes:
[A] All columns are from the Revised Baskett Report, Schedule 1, except for Implied Pricing Mark-up, which I calculate from Mr. Baskett's Data.
[B] Implied Pricing Mark-up is calculated as (Retail Sales Unit Price/Wholesale Purchase Unit Price) - 1.
Source:
[1] Revised Baskett Report, Schedule 1.
CONFIDENTIAL
Case 1:20-cv-00658-LMB-IDD     Document 131-20     Filed 05/07/21     Page 38 of 38
PageID# 2186

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