Unregistered Sale of Equity Securities
Item 3.02. Unregistered Sales of Equity Securities
We have issued an aggregate of 600,000 shares of unregistered common stock (the "Settlement Shares") to the Financing Transaction Investors identified in our current report on Form 8-K filed on November 4, 2010.
The Settlement Shares were issued in a non-cash settlement of the Financing Transaction Litigation. The Settlement Shares were issued in exchange for the surrender of 350,000 Series 1 Warrants and a release of all claims against the Company.
The Settlement Shares were issued in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities Act. Pursuant to the 3(a)(10) exemption, the terms and conditions of the 3(a)(10) exchange were approved by the United States District Court for the Southern District of New York on December 1, 2010, after a hearing upon the fairness of the terms and conditions of the 3(a)(10) exchange. The Financing Transaction Investors participated in the hearing.
Pursuant to the 3(a)(10) exemption, the Settlement Shares may be resold without registration under the Securities Act.
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