In October of 2006, the Company signed a term sheet with Trinad Capital Master Fund Ltd. (the Sponsor) to sponsor a plan of reorganization. Prior to confirmation of the Chapter 11 plan of reorganization, the Sponsor will identify a merger candidate to be merged into the Company. The Sponsor is currently in negotiations with NorthStar Systems International, Inc. as the potential merger candidate. Before the merger can take place, the Company is required to bring all of its financial, tax and SEC filings current from the last filing date of June 30, 2002. Pursuant to orders of the United States Bankruptcy Court for the Southern District of New York, the Company has engaged accountants, auditors and SEC counsel to complete this task. Under the terms of the proposed plan, creditors of the Company will receive a pro rata cash payment and stock consideration in the new merged entity. The aforementioned consideration will be distributed to creditors of the Company under the proposed plan of reorganization.
