Item 3.02 Unregistered Sales of Equity Securities.

Pursuant to our Standby Equity Distribution Agreement (“SEDA”) dated March 20, 2006, we sold 29,589 shares of common stock to Cornell Capital Partners, LP (“Cornell Capital”) on May 22, 2006.  In accordance with the SEDA, the number of shares was calculated as $300,000 divided by $10.1388. We selected $300,000 as the gross advance for this particular SEDA transaction. The $10.1388 price per share was calculated, under the SEDA, by multiplying the lowest daily volume weighted average price (as quoted by Bloomberg L.P.) in the five-day trading period from May 12, 2006 to May 18, 2006, with the trading days on which the daily volume weighted average price was below $10.01 (the Minimum Acceptable Price set in the Advance Notice) excluded, by 98.5%. From the indicated $300,000 gross advance, we actually received cash proceeds of $286,000, net of a 4.5% retainage fee of $13,500 and a $500 structuring fee.

We have stated in a SEC registration statement that the 1.5% discount and the 4.5% retainage fee constitute underwriting discounts, as does the $440,000 commitment fee (paid in the form of 37,022 shares of our common stock) which we paid to Cornell Capital in respect of the entire $15,000,000 SEDA commitment on March 20, 2006. The 29,589 shares were issued to Cornell Capital pursuant to the Securities Act Section 4(2) registration exemption.

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