(a) Phoenix, for the purpose of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 150,916,166 shares of Common Stock representing approximately 44.1% of the outstanding shares of Common Stock. SGPV, for the purposes of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 150,916,166 shares of Common Stock representing approximately 44.1% of the outstanding shares of Common Stock. SGPV is the managing member of Phoenix. SGPV disclaims any beneficial ownership of the 150,916,166 shares of Common Stock held by Phoenix, except to the extent of its pecuniary interest, if any, in such shares. SG Phoenix, for the purposes of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 6,816,843 shares of Common Stock representing approximately 2.0% of the outstanding shares of Common Stock. Mr. Engmann, for the purposes of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 36,931,738 shares of Common Stock representing approximately 11.0% of the outstanding shares of Common Stock. Mr. Engmann is a co-general partner of Kendu and a shareholder and the investment manager of MDNH Trading Corp., the General Partner of MDNH. Mr. Engmann disclaims any beneficial ownership of the 8,811,360 shares of Common Stock held by MDNH, except to the extent of his pecuniary interest, if any, in such shares. Mr. Engmann has voting and dispositive power over both Kendu and MDNH. Kendu, for the purposes of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 5,887,556 shares of Common Stock representing approximately 1.8% of the outstanding shares of Common Stock. MDNH, for the purposes of Rule 13d-3 promulgated under the Exchange Act, beneficially owns 8,811,360 shares of Common Stock representing approximately 2.6% of the outstanding shares of Common Stock. (b) Phoenix has the sole power to vote and the sole power to dispose of 150,916,166 shares of Common Stock. SGPV has the sole power to vote and the sole power to dispose of 0 shares of Common Stock and has the shared power to vote and the shared power to dispose of 150,916,166 shares of Common Stock. SG Phoenix has the sole power to vote and the sole power to dispose of 6,816,843 shares of Common Stock and has the shared power to vote and the shared power to dispose of 0 shares of Common Stock. Mr. Engmann has the sole power to vote and the sole power to dispose of 22,232,822 shares of Common Stock and has the shared power to vote and the shared power to dispose of 14,698,916 shares of Common Stock. Kendu has the sole power to vote and the sole power to dispose of 5,887,556 shares of Common Stock and has the shared power to vote and the shared power to dispose of 0 shares of Common Stock. MDNH has the sole power to vote and the sole power to dispose of 8,811,360 shares of Common Stock and has the shared power to vote and the shared power to dispose of 0 shares of Common Stock. (c) See the information with respect to the acquisition by Phoenix, Mr. Engmann, Kendu and MDNH, as set forth in Item 3, which is hereby incorporated by reference. In addition, on May 4, 2010, the Issuer entered into a second amendment of the credit agreement dated June 5, 2008 (“Amendment No. 2 to the Credit Agreement”) by and among the Issuer and Phoenix, Mr. Engmann and the other lenders party thereto, which credit agreement had previously been amended by the parties thereto on May 28, 2009 in connection with a previous financing transaction. Under Amendment No. 2 to the Credit Agreement, until August 31, 2010, the Issuer had the ability to receive up to an aggregate of $1.0 million in additional funding through the issuance of additional secured promissory notes to Phoenix and/or its designees. In connection with the issuance of any additional |