Item 302. Unregistered Sales of Equity Securities
On November 29, 2006, the Registrant was informed by two holders of an aggregate of 1,217 shares of the Registrant’s Series B Convertible Preferred Shares (“Series B Preferred”) of their intention to convert such shares of Series B Preferred into shares of the Registrant’s common stock on an ongoing basis. Each share of Series B Preferred has a face value of $1,000 per share and is convertible into 200,000 shares of the Registrant’s common stock. Each of the two holders of Series B Preferred shares informed the Registrant of their intention to convert Series B Preferred shares into 1,000,000 shares of common stock each on a weekly basis. The conversion of all the currently outstanding shares of Series B Preferred stock would result in the issuance of an aggregate of 243,400,000 shares of the Registrant’s common stock. The outstanding shares of Series B Preferred are restricted shares, but they have been fully paid and outstanding for a period in excess of two years from the date of their issuance. No additional consideration is payable upon the conversion of the Series B Preferred to shares of our common stock. Accordingly, the holders of the shares of underlying common stock issued upon conversion of shares of the Series B Preferred shall be entitled to request the removal of any restrictive legends that would be attached to the common shares so issued in accordance with the provisions of Rule 144(k) under the Securities Act of 1933, as amended.
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