The Company has not yet determined what action it will take in response to this continued listing issue and is currently evaluating potential alternatives in the context of its business plan.

The Company reported a shareholders' deficit of $3.8 million in its annual report on Form 10-K for the fiscal year ended December 31, 2008. This negative net worth results from the Company's restructure charges totaling $7.6 million at December 31, 2008, which relate to obligations under a facility lease, in combination with the goodwill impairment charge of $7.9 million recorded for the fourth quarter of 2008.

As previously reported, the Company is also in non-compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. On April 23, 2008, the Nasdaq Stock Market notified the Company that for 30 consecutive business days the bid price of its common stock had closed below the minimum $1.00 per share bid price required under Marketplace Rule 4310(c)(4). The letter stated that, under Marketplace Rule 4310(c)(8)(d), the Company would be provided with 180 calendar days to regain compliance. The Nasdaq Stock Market has since suspended enforcement of this requirement until July 20, 2009, at which time the Company will have five business days to regain compliance. If, on July 27, 2009, the Company meets all of the Nasdaq Capital Market's initial listing criteria set forth in Marketplace Rule 4310(c) (other than the bid price criterion), but has not regained bid price compliance, the Company will be afforded an additional 180 calendar days to regain compliance. To regain compliance, the bid price of the Company's common stock must close at $1.00 or more per share for a minimum of 10 consecutive business days.