On June 9, 2008, the Company temporarily modified the terms of its outstanding convertible notes and warrants issued in its December 2004 and April 2007 private placements. During the period beginning June 9, 2008 through June 24, 2008, the conversion price of such notes, currently $1.00 per share for notes issued in December 2004 and $0.75 per share for notes issued in April 2007, will be lowered to $0.53 per share. In addition the exercise price for the warrants, currently $1.30 per share for warrants issued in December 2004 and $1.00 for warrants issued in April 2007, will be reduced to $0.40 per share, and will receive three additional warrants (each, a "bonus warrant") every ten warrants exercised during this period. The bonus warrants may be exercised through June 24, 2008 at an exercise price of $0.30 per share, and if not exercise on or before such date, the exercise price for such bonus warrants shall increase to $0.60 per share. The bonus warrants expire on April 6, 2012.

The following pro-forma information is provided to show the financial impact to the Company if all holders of the Company's notes and warrants discussed above took advantage of this temporary reduction in conversion and exercise prices, and exercised all bonus warrants. This pro forma financial information is based only on the above and does not consider operating results since December 31, 2007, the Company's last reported fiscal quarter.

                                                            (in '000)
                                              12/31/2007       100% Participation
Cash and Accounts Receivable                 $        873     $              3,172
Accounts Payable and Accrued Cash Expenses         (1,138 )                 (1,138 )
Net Working Capital                                  (266 )                  2,034
Total Debt Obligations                             (4,000 )                      0
Equity                                             (2,791 )                  3,609

Note: Accounts Payable and Accrued Cash Expenses excludes debt and the liability for deferred revenue.