Filed pursuant to
Rule 424(b)(3)
File No. 333-126295

MEDICAL NUTRITION USA, INC.

10,810,919 Shares of Common Stock

This prospectus relates solely to the offer and sale by the selling
securityholders identified in this prospectus of up to 10,810,919 shares of our
common stock. The shares of common stock registered by this prospectus are
comprised of 5,661,103 shares issued upon exercise of warrants to purchase
shares of our common stock held by certain selling securityholders
(collectively, the "Warrants"), and 5,149,816 shares issued or issuable upon
conversion of principal and interest under convertible promissory notes held by
certain selling securityholders (collectively, the "Notes").

The selling securityholders are offering all of the shares of common
stock to be sold in the offering, but they are not required to sell any of these
shares. We will not receive any of the proceeds from the sale of our common
stock by the selling securityholders. We will bear all expenses (other than
selling commissions and fees and expenses of counsel or other advisors to the
selling securityholders) relating to this offering.

The selling securityholders may sell these shares of common stock from
time to time in various types of transactions, including in the principal market
on which our common stock is traded or listed or in privately negotiated
transactions. If any broker-dealers are used by the selling securityholders, any
commissions paid to broker-dealers and, if broker-dealers purchase any shares of
our common stock as principals, any profits received by such broker-dealers on
the resale of such shares of our common stock, may be deemed to be underwriting
discounts or commissions under the Securities Act of 1933, as amended. In
addition, any profits realized by the selling securityholders may be deemed to
be underwriting commissions if any such selling securityholder is deemed an
"underwriter" as defined in the Securities Act of 1933, as amended.

Our common stock is traded on the OTC Bulletin Board under the symbol
"MDNU.OB." The closing price per share of our common stock as reported by the
OTC Bulletin Board on May 16, 2006, was $4.02.

Investing in our common stock involves significant risks. See "Risk
Factors" beginning on page 5 to read about factors you should consider before
buying our common stock.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

You should rely only on the information contained in this prospectus or
in the Securities and Exchange Commission reports incorporated by reference into
this prospectus. Neither we nor the selling securityholders have authorized
anyone to provide you with information different from that contained in this
prospectus or those reports. The selling securityholders are offering to sell,
and seeking offers to buy, shares of our common stock only in jurisdictions
where offers and sales are permitted. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the
time of delivery of this prospectus or of any sale of our common stock.

Prospectus dated May 17, 2006

TABLE OF CONTENTS

WHERE YOU CAN FIND MORE INFORMATION.......................................... 1

INCORPORATION OF DOCUMENTS BY REFERENCE...................................... 1

FORWARD-LOOKING STATEMENTS................................................... 2

PROSPECTUS SUMMARY........................................................... 3

RISK FACTORS................................................................. 5

USE OF PROCEEDS.............................................................. 9

DETERMINATION OF OFFERING PRICE.............................................. 9

SELLING SECURITYHOLDERS...................................................... 10

PLAN OF DISTRIBUTION......................................................... 15

DESCRIPTION OF SECURITIES TO BE REGISTERED................................... 17

LEGAL MATTERS................................................................ 17

EXPERTS...................................................................... 17

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a
registration statement on Form S-1, including exhibits, schedules and
amendments, under the Securities Act of 1933, as amended, with respect to the
shares of common stock to be sold in this offering. This prospectus does not
contain all the information included in the registration statement. For further
information about us and the shares of our common stock to be sold in this
offering, please refer to the registration statement.

We are subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended, and file and furnish to our
securityholders annual reports containing financial statements audited by our
independent auditors. We also make available to our securityholders quarterly
reports containing unaudited financial data for the first three quarters of each
fiscal year as well as proxy statements and other information required to be
filed with the Securities and Exchange Commission.

You may read and copy any contract, agreement or other document
referred to in this prospectus and any portion of our registration statement or
any other information from our filings with the Securities and Exchange
Commission at the Securities and Exchange Commission's public reference room at
450 Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the Securities and
Exchange Commission. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information about the public reference rooms. Our
filings with the Securities and Exchange Commission, including our registration
statement, are also available to you on the Securities and Exchange Commission's
Web site, http://www.sec.gov.

INCORPORATION OF DOCUMENTS BY REFERENCE

The Securities and Exchange Commission allows us to incorporate by
reference the information that we file with it. This means that we can disclose
information to you by referring you to other documents. The documents that have
been incorporated by reference into this prospectus are an important part of
this prospectus, and you should review that information in order to understand
the nature of any investment in our Warrants or our common stock. Information
contained in this prospectus automatically updates and supersedes previously
filed information. We are incorporating by reference the documents listed below
and all of our filings under the Securities Exchange Act of 1934, as amended,
after the date of filing of the initial registration statement and prior to the
effectiveness of the registration statement.

* our Annual Report on Form 10-KSB for the fiscal year ended
January 31, 2006.

* our proxy statement dated May 9,2006 relating to our annual
meeting of shareholders held on June 7, 2006.

These reports and documents may be accessed through the "Investor
Relations" portion of our website, http://www.pro-stat.info. If you would like a
copy of any of these reports and documents, at no cost, please write or call us
at:

Medical Nutrition USA, Inc.
10 West Forest Avenue
Englewood, New Jersey 07631
Attn: Corporate Secretary
Telephone: (201) 569-1188

You should only rely upon the information included in or with, or
incorporated by reference into, this prospectus or in any prospectus supplement
that is delivered to you. We have not authorized anyone to provide you with
additional or different information. You should not assume that the information
included in or with, or incorporated by reference into, this prospectus or any
prospectus supplement is accurate as of any date later than the date on the
front of the prospectus or prospectus supplement.

FORWARD-LOOKING STATEMENTS

This prospectus may contain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. Forward-looking statements are identified by words such as
"believe," "anticipate," "expect," "intend," "plan," "will," "may," and other
similar expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements.

We wish to caution readers that these forward-looking statements are
only predictions and that our business is subject to significant risks. The
factors discussed herein, and other important factors, in some cases have
affected, and in the future could affect, our actual results and could cause our
actual consolidated results for our current fiscal year, and beyond, to differ
materially from those expressed in any forward-looking statements made by us or
on our behalf. These risks include, but are not limited to:

o A significant amount of our revenue is derived from two
customers;

o unanticipated costs and expenses related to our marketing
plan;

o our inability to implement our business strategy;

o our inability to manage our growth;

o our ability to identify alternative sources of supply for our
products;

o the uncertainties associated with obtaining and enforcing
proprietary rights important to our business;

o competition from other products;

o failure to obtain market acceptance; and

o the uncertainty of the timing of product introductions and of
sales growth.

You should read this prospectus and the registration statement of which
this prospectus is a part completely and with the understanding that our actual
future results may be materially different from what we expect. We qualify all
of the forward-looking statements in this prospectus by these cautionary
statements.

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information regarding us, the sale of our Warrants and common stock in this
offering by the selling securityholders, our consolidated financial statements
and the notes to those consolidated financial statements that accompany this
prospectus. You should also carefully consider the factors described under the
heading "Risk Factors" on page 5. Throughout this prospectus we refer to Medical
Nutrition USA, Inc. as "we," "us," "our" and "ours."

Our Business

We develop and distribute nutritional supplements for use in long-term
care facilities, hospitals, dialysis clinics and bariatric surgery clinics. Some
of our products are also sold through health food stores under private label or
licensing agreements.

During the past year, we have continued to implement our strategy to
increase sales of our own branded products, primarily to nursing homes, nursing
home distributors, dialysis clinics, bariatric surgery clinics and their
patients. These products include Pro-Stat(TM), an enzymatic hydrolyzed, liquid
protein supplement used to treat unintended weight loss, malnutrition and
pressure ulcers, and the pbs Nutritional Support System(TM), a line of
nutritional supplements used to treat the nutritional risks that often result
from bariatric surgery.

Our strategy includes increasing the number of our nursing homes,
dialysis and bariatric surgery clinic customers who utilize our products through
expansion of our sales force and through a network of consultant dietitians, and
sales representatives. We also use advertising and exhibitions at trade shows
that focus on long-term care, dialysis and bariatric surgery. As a result of
this strategy, sales of our branded products increased over 82% for the fiscal
year ended January 31, 2006 compared to the prior fiscal year.

In the past year, we have developed and successfully marketed a number
of new products, including alternative formulations and packaging for our
Pro-Stat(TM) liquid protein supplement product. These new products have expanded
the potential uses of Pro-Stat(TM) to patients covered under Medicare Part B,
those receiving supplements as a Med Pass item and dialysis patients who are
covered under Medicaid.

We believe that the success of our strategy will depend upon the
quality and effectiveness of our products, our ability to establish brand name
recognition for our products, our ability to continue to develop new products,
as well as the ability of our management and sales force to implement and
execute our strategy.

We were incorporated in New Jersey in December 1981 under the name
Medical Nutrition, Inc. In March 1990, the Company completed the initial public
offering of its common stock and later changed its name to Gender Sciences, Inc.
In 2003, we changed our name to Medical Nutrition USA, Inc. and reincorporated
into the State of Delaware. Our principal executive offices are located at 10
West Forest Avenue, Englewood, New Jersey 07631. Our telephone number is (201)
569-1188. Our website is located at www.mdnu.com. We do not consider information
contained on, or that can be accessed through, our website to be part of this
prospectus.

"Medical Nutrition USA," "Pro-Stat," "Fiber-Stat" and "pbs Nutritional
Support System" are trademarks of ours. This prospectus also refers to
trademarks and trade names of other companies and organizations, and these
trademarks and trade names are the property of their respective owners.

The Offering

Common stock offered in this offering Up to 10,810,919 shares

Common stock to be outstanding after this offering 13,712,184 (1)

Use of proceeds All of the net proceeds
from the sale of our
common stock covered by
this prospectus will be
received by the selling
securityholders. We will
not receive any proceeds
from the sale of such
common stock.

Common Stock OTC Bulletin Board symbol "MDNU.OB"

- ------------------

(1) Unless the context indicates otherwise, all share and per-share
information in this prospectus is based on 10,116,769 shares of our
common stock outstanding as of April 27, 2006. Shares of common stock to
be outstanding after this offering assumes that all shares registered
under this prospectus, including shares to be issued upon exercise of
warrants, including the Warrants, and shares to be issued upon conversion
of convertible notes, are acquired and sold by the selling
securityholders. Unless the context indicates otherwise, all other share
and per-share information in this prospectus assumes no conversion of
convertible notes or other rights to acquire our common stock outstanding
as of April 27, 2006.

RISK FACTORS

Investment in our Warrants or common stock involves a high degree of
risk. You should carefully consider the risks described below together with all
of the other information included in or accompanying this prospectus before
making an investment decision. The risks and uncertainties described below are
not the only ones we face. If any of the following risks actually occur, our
business, financial condition or results of operations could suffer. In that
case, the trading price of our Warrants or common stock could decline, and you
may lose all or part of your investment.

Risks Related to Our Business

We are not profitable and we may not achieve profitability.

In the fiscal year ended January 31, 2006, our net loss was
approximately $176,900, and through January 31, 2006, we had an accumulated
deficit of $12,580,600. We cannot guaranty that we will ever achieve sustainable
profitability selling our existing products or that we will be able to
successfully develop and market profitable new products in the future. If we
fail to achieve sustainable profitability, the price of our stock will likely
decline.

We generate a significant amount of revenue from two customers.

For the fiscal year ended January 31, 2006, two customers accounted for
approximately 34% of our total revenue, as compared to 40% in the prior year. We
do not have written agreements with these customers and, as a result, we do not
know if these customers will continue to order our products, and if so, whether
the orders will continue to be placed in amounts similar to the amounts these
customers have purchased in the past. If these customers stop purchasing our
products or purchase them in significantly smaller quantities than they have in
the past, our sales would materially decrease which could harm our business.

We may not be able to implement our business strategy.

Our strategy includes increasing the sales of our branded products and
developing new products. We may encounter problems, delays and/or increased
expenses implementing this strategy, including problems, delays and expenses
that are beyond our control. These may include:

o unanticipated costs and expenses related to marketing and
branding our products,

o unanticipated costs and expenses related to the acquisition or
development of new products, and

o unanticipated competition.

If we are unable to implement our strategy, our ability to sell
products and generate revenue from product sales may be harmed or delayed.

If we don't successfully manage any growth we experience, we may suffer
increased expenses without any corresponding increase in sales revenue.

Our business is growing at a rapid rate. This growth may place a
significant strain on our management, financial and other resources. It may also
require us to increase expenditures before we generate corresponding revenues.
Our ability to manage future growth, should it occur, will depend upon our
ability to identify, attract, motivate, train and retain skilled managerial,
financial, business development, sales and marketing and other personnel.
Competition for these employees is intense. Moreover, our growth will require us
to integrate and manage an increasing number of employees. We may not be able to
implement successfully and maintain our operational and financial systems or
otherwise adapt to growth. Any failure to manage growth, if attained, could have
a negative impact on our financial condition and operations, which may cause our
stock price to decline.

We are dependent on a limited number of sources of supply for many of our
products. If there is an interruption in supply of any of our products, our
sales may suffer.

We are dependent on a limited number of sources of supply for many of
our products. We cannot guarantee that our third party suppliers will be able to
provide adequate supplies of products in a timely fashion. If we are unable to
renew or extend an agreement with a third party supplier, if an existing
agreement is terminated or if a third party supplier otherwise cannot meet our
need for a product, we may not be able to obtain an alternative source of supply
in a timely manner, or at all. As a result, we may be unable to continue to
market the affected product as planned and could be required to abandon or
divest ourselves of this product line altogether.

We may need additional financing. If we are unable to obtain any needed
additional financing, we may be unable to implement our business strategy.

Although we believe that we have sufficient cash on hand to fully
implement our business strategy for our 2007 fiscal year, our future capital
requirements will depend on many factors, including:

o the cost of our sales and marketing activities,

o the cost of educational programs for our markets,

o competing product and market developments,

o the cost of developing new products,

o the cost of expanding our operations, and

o our ability to generate positive cash flow from sales.

If needed, additional financing may not be available on acceptable
terms, if at all. If additional funds are needed, but not available, we might be
required to curtail significantly or defer one or more of our marketing programs
or to limit or postpone obtaining or developing new products. If we raise
additional funds through the issuance of equity securities, the percentage
ownership of our then-current securityholders may be reduced and such equity
securities may have rights, preferences or privileges senior to those of the
holders of our common stock. If we raise additional funds through the issuance
of additional debt securities, these new securities would have certain rights,
preferences and privileges senior to those of the holders of our common stock,
and the terms of these debt securities could impose restrictions on our
operations.

If we are unable to maintain our existing proprietary rights or to obtain new
proprietary rights, our competitive position could be harmed.

We believe that the trademarks, trade secrets, copyrights and other
proprietary rights that we own or license will continue to contribute to our
success and competitive position. While some of our products incorporate
patented uses, most of our business is not protected by patents. Nevertheless,
if we fail to maintain our existing rights or cannot develop additional rights
in the future, our competitive position may be harmed.

We intend to take the actions that we believe are necessary to protect
our proprietary rights, but we may not be successful in doing so, or we may be
unable to do so on commercially reasonable terms. Our trademarks and the
products we offer may also conflict with or infringe upon the proprietary rights
of third parties many of whom have far greater resources to prosecute or defend
intellectual property litigation. If we have to prosecute or defend any such
litigation or face challenges to our proprietary rights, our financial condition
and business could be harmed.

Risks Related to Our Industry

We face significant competition in our industry, and most of our competitors
have substantially greater resources than we do.

Competition in the nutritional supplement industry consists of
established companies that sell branded products which have achieved a high
level of customer awareness. Nearly all of our competitors and potential
competitors have substantially greater financial resources, more extensive
business experience and more personnel than we do. Our ability to compete will
depend on the timeliness of the development of our products and our ability to
market our products effectively. If a larger company with significant financial
resources were to compete directly with us in particular market segments, we
cannot assure you that we would be able to compete successfully with such a
competitor or operate profitably under those circumstances.

We may be exposed to product liability claims not covered by insurance.

Our business involves exposure to product liability risks that are
inherent in the production, manufacture and distribution of nutritional
products. Although we believe that we currently carry and intend to maintain a
comprehensive multi-peril liability package, we cannot guarantee that this
insurance will be sufficient to cover all possible liabilities or that we will
be able to secure additional coverage as the commercialization of our products
increases. A successful suit against us could negatively impact our business and
financial condition if the amounts involved are material.

Our products are subject to significant government regulation.

Certain of our products and potential products are or will be subject
to government regulation. Our current products are regulated by the Food and
Drug Administration (the "FDA") and are subject to labeling requirements, good
manufacturing practice regulations and certain other regulations designed to
ensure the safety of the products.

Claims we make in labeling and advertising our products are also
subject to regulation by the FDA as well as the Federal Trade Commission, the
Consumer Product Safety Commission and various state agencies under their
general authority to prevent false, misleading and deceptive trade practices.
Although we believe that we are in compliance with all existing regulations, we
remain subject to the risk that our products or marketing systems could be found
not to be in compliance with applicable laws or regulations. Failure to comply
with such requirements can result in adverse regulatory action, including
injunctions, civil or criminal penalties, product recalls or the relabeling,
reformulation or possible termination of certain products, any of which could
negatively affect our business.

In addition, our current and potential products may become subject to
further regulation in the future. The burden of such regulation could add
materially to the costs and risks of our development and marketing efforts. We
cannot guaranty that we will be able to obtain any required approvals or comply
with any new regulations if our products become subject to additional
governmental regulation in the future.

Risks Related to an Investment in Our Securities

The market price of our common stock could be volatile and your investment could
suffer a decline in value.

There has been a very limited public market for our common stock, and
we do not know whether investor interest in our business will lead to the
development of a more active trading market in the future. Furthermore, in
recent years the stock market in general, and the shares of healthcare product
companies in particular have experienced price fluctuations. This volatility has
had a substantial effect on the market prices of securities issued by many
companies for reasons unrelated to the operating performance of the specific
companies. As a result, the market price for our common stock is likely to be
volatile and could be susceptible to wide price fluctuations due to a number of
internal and external factors, many of which are beyond our control, including:

o quarterly variations in operating results and overall
financial condition;

o economic and political developments affecting the economy as a
whole;

o short-selling programs;

o the stock market's perception of our industry as a whole;

o product innovations by others;

o proprietary rights disputes or litigation; and

o sales of substantial numbers of shares of our common stock or
securities convertible into or exercisable for our common
stock.

These broad market fluctuations may cause a reduction in the price of
our common stock.

Historically we have had a small public float, which resulted in a thin trading
market for our shares.

Until recently, the public float of our common stock has been small in
comparison to our total shares outstanding on a fully diluted basis, resulting
in a very thin public market for the trading of our shares. Trading volume on
any single day has seldom exceeded 1,000 shares. Limited trading volume entails
a high degree of volatility in our stock price. In the twelve-month period ended
April 27, 2006, the high and the low bid price for shares of our common stock as
quoted on the OTC Bulletin Board ranged from $2.46 to $5.03. Nevertheless, since
February 19, 2006 we have issued more than 5,383,526 additional shares of our
common stock upon the exercise of our Class A and Class B Warrants, which
expired in accordance with their terms on April 14, 2006. The issuance of these
shares could have a material impact on our historical liquidity and volatile
stock price. However, we cannot predict the impact the exercise of the Class A
and Class B Warrants will have on the trading of our common stock, and our
limited liquidity and volatile stock price could continue in the future.

The application of the "penny stock" rules could adversely affect the market
price of our common shares and increase your transaction costs to sell those
shares.

As long as the trading price of our common shares is below $5 per
share, the open-market trading of our common stock will be subject to the "penny
stock" rules. The penny stock rules impose additional sales practice
requirements on broker-dealers who sell securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1 million or annual income exceeding $200,000, or $300,000 together
with their spouses). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of securities and
have received the purchaser's written consent to the transaction before the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the broker-dealer must deliver, before the transaction, a disclosure
schedule prescribed by the Securities and Exchange Commission relating to the
penny stock market. The broker-dealer also must disclose the commissions payable
to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statements must be sent
disclosing recent price information on the limited market in penny stocks. These
additional burdens imposed on broker-dealers may restrict the ability or
decrease the willingness of broker-dealers to sell our common stock, and may
result in decreased liquidity for our common stock and increased transaction
costs for sales and purchases of our common stock as compared to other
securities. These and other factors may make it difficult for our
securityholders to sell their shares in the open market if and when eligible to
do so.

We are controlled by a limited number of securityholders.

As of April 27, 2006, our directors, officers and principal
shareholders owned beneficially approximately 70% of our outstanding common
stock. As a result, such securityholders have the ability to effectively control
the election of our entire Board of Directors and our affairs in general,
including all fundamental corporate transactions such as mergers, consolidations
and the sale of substantially all of our assets.

Our certificate of incorporation authorizes our board of directors to issue
shares of preferred stock.

Our authorized capital includes 5,000,000 shares of preferred stock,
none of which are issued or outstanding. Our board of directors, without
additional securityholder approval, has the power to issue any or all of these
authorized but unissued shares and to establish the rights, preferences and
privileges of our preferred stock.

We do not intend to pay cash dividends.

We have never paid cash dividends on our stock and do not anticipate
paying any cash dividends in the foreseeable future.

USE OF PROCEEDS

The selling securityholders will receive all of the net proceeds from
the sale of our common stock offered by this prospectus. Accordingly, we will
not receive any proceeds from the sale of our common stock.

DETERMINATION OF OFFERING PRICE

The price at which our common stock may be sold may be based on market
prices prevailing at the time of sale, at prices relating to such prevailing
market prices or at negotiated prices.

SELLING SECURITYHOLDERS

The following table sets forth: (i) the name of each selling
securityholder who may offer to resell our common stock, (ii) the number of such
securities beneficially owned by such selling securityholder, to the best of our
knowledge, (iii) the number of such securities that may be sold in this
offering, and (iv) the number of such securities each selling securityholder
will own after the offering, assuming the selling securityholders sell all of
the securities offered. The number and percentage of shares beneficially owned
is determined in accordance with Rule 13d-3 of the Securities Exchange Act of
1934, as amended. Under such rule, beneficial ownership includes any shares as
to which the selling securityholder has sole or shared voting power or
investment power and also any such shares that the selling securityholder has
the right to acquire within sixty (60) days. Percentage of beneficial ownership
after the offering is based on 10,116,769 shares of our common stock outstanding
as of April 27, 2006, and assumes only the securities of the applicable selling
security holder are sold. Except where otherwise noted, the selling
securityholders named in the following table have, to our knowledge, sole voting
and investment power with respect to the shares beneficially owned by them.

Beneficial Ownership Beneficial Ownership
Before Offering After Offering (1)
---------------- ------------------------
Number of Number of Shares Number of
Name Shares Being Registered Shares Percent
- --------------------------------- ---------------- ---------------- ------------ ----------

Frank A. Newman 2,341,929 (2) 1,709,346 632,583 5.6%
The Ullman Family Partnership, LP 1,012,668 (3) 988,668 24,000 *
The Ullman Family Partnership 1,333,333 (4) 1,333,333 -- --
Lawrence Burstein 518,894 (5) 179,200 339,694 3.3%
Bruce Schonbraun 300,000 (6) 200,000 100,000 1.0%
Richard Schoninger 300,000 (7) 200,000 100,000 1.0%
Anthony Bernheim 40,000 (8) 40,000 -- --
Burton Eichler 50,000 (9) 50,000 -- --
I.B.B. Associates 40,000 (10) 40,000 -- --
Phillip Eichler 75,000 (11) 50,000 25,000 *
Andrew Horowitz 487,701 (12) 398,696 89,005 *
Gene Terry 500,864 (13) 124,667 376,197 3.6%
Arnold Gans 916,404 (14) 89,608 826,796 7.6%
Barbara Goldin 44,800 (15) 44,800 -- --
Cricket Services, Ltd 44,800 (16) 44,800 -- --
Myra Gans 916,404 (17) 89,608 826,796 7.6%
Richard Braver 53,564 (18) 44,800 8,764 *
Leslie Slutsky 270,694 (19) 179,200 91,494 *
Richard Rosenstock 104,292 (20) 50,000 54,292 *
Steven Burns 117,425 (21) 110,619 6,806 *
Sue Berland 105,140 (22) 50,000 55,140 *
Sidney David 148,164 (23) 148,164 -- --
Stephen Irwin Trust 298,663 (24) 298,663 -- --
Joseph S. Littenberg 222,268 (25) 222,268 -- --
Grand Slam LLC 348,696 (26) 298,696 50,000 *
Peter Sudler 298,140 (27) 298,140 -- --
ATE Consulting Co. 597,331 (28) 597,331 -- --
Mark Rosenberg 41,275 (29) 14,931 26,344 *
Emily Fine 29,867 (30) 29,867 -- --
Hal Goldstein 29,867 (31) 29,867 -- --
Sai Devabhaktuni 29,867 (32) 29,867 -- --
Richard Kress 49,282 (33) 44,800 4,482 *
Steven Milner 44,800 (34) 44,800 -- --
Patrick Lander 149,331 (35) 149,331 -- --
Mark Rachesky 3,768,799 (36) 2,882,133 886,666 7.6%
MHR Capital Partners LP 1,752,112 (37) 1,752,112 -- --
MHR Capital Partners (100) LP 234,020 (38) 234,020 -- --
Bernard Korman 275,614 (39) 177,778 97,836 *
Barry Goldin 44,444 (40) 44,444 -- --
Unity Venture Capital Associates Ltd. 248,200 (41) -- 248,200 2.4%
Kirlin Holding Corp. 10,000 (42) 10,000 -- --
Stuart Garawitz 25,000 (43) 25,000 -- --
Anthony Kirincic 7,500 (44) 7,500 -- --
David Lindner 7,500 (45) 7,500 -- --

* Less than 1%.

(1) Assumes all of the shares being offered under this prospectus will be sold
by the selling securityholders.

(2) Consists of (a) 1,203,263 shares of common stock, (b) 312,000 shares of
common stock issuable upon the exercise of options that are immediately
exercisable, and (c) 826,666 shares of common stock issuable upon
conversion of Notes. Mr. Newman is also our Chairman, Chief Executive
Officer and one of our directors.

(3) Consists of (a) 988,668 shares of common stock, (b) 24,000 shares of
common stock issuable upon the exercise of options that are immediately
exercisable.

(4) Consists of 1,333,333 shares of common stock.

(5) Consists of (a) 86,154 shares of common stock owned directly, 30,000
shares of common stock beneficially owned by his wife, Leslie Slutsky and
212,200 shares of common stock beneficially owned by Unity Venture Capital
Associates Ltd. ("Unity"), (b) 55,340 shares of common stock issuable upon
the exercise of options owned directly and immediately exercisable and
36,000 shares of common stock issuable upon the exercise of options
beneficially owned by Unity and immediately exercisable, (c) 62,000 shares
of common stock issuable upon the conversion of Notes owned directly and
37,200 shares of common stock issuable upon the conversion of Notes
beneficially owned by Ms. Slutsky. Mr. Burstein is the president, a
director and the principal shareholder of Unity. Ms. Slutsky is Mr.
Burstein's spouse.

(6) Consists of 300,000 shares of common stock.

(7) Consists of 300,000 shares of common stock.

(8) Consists of 40,000 shares of common stock.

(9) Consists of 50,000 shares of common stock.

(10) Consists of 40,000 shares of common stock.

(11) Consists of 75,000 shares of common stock.

(12) Consists of (a) 100,000 shares of common stock owned directly and 348,696
shares of common stock beneficially owned by Grand Slam LLC ("Grand
Slam"), and (b) 39,005 shares of common stock issuable upon the exercise
of options owned directly that are immediately exercisable. Mr. Horowitz
is the managing member of Grand Slam and one of our directors.

(13) Consists of (a) 133,333 shares of common stock, and (b) 326,197 shares of
common stock issuable upon the exercise of options that are immediately
exercisable.

(14) Consists of (a) 144,601 shares of common stock jointly owned with Myra
Gans, (b) 410,902 shares of common stock issuable upon the exercise of
options owned directly and immediately exercisable, and 360,901 shares of
common stock issuable upon the exercise of options beneficially owned by
Ms. Gans and immediately exercisable. Mr. Gans is our President. Ms. Gans
is Mr. Gans' spouse.

(15) Consists of (a) 20,000 shares of common stock, and (b) 24,800 shares of
common stock issuable upon conversion of Notes.

(16) Consists of (a) 20,000 shares of common stock, and (b) 24,800 shares of
common stock issuable upon conversion of Notes.

(17) Consists of (a) 144,601 shares of common stock jointly owned with Arnold
Gans, (b) 360,901 shares of common stock issuable upon the exercise of
options owned directly and immediately exercisable, and 410,902 shares of
common stock issuable upon the exercise of options beneficially owned by
Mr. Gans and immediately exercisable. Ms. Gans is our Executive Vice
President and Secretary. Mr. Gans is Ms. Gans' spouse.

(18) Consists of (a) 28,764 shares of common stock, and (b) 24,800 shares of
common stock issuable upon conversion of Notes.

(19) Consists of (a) 30,000 shares of common stock owned directly and 86,154
shares of common stock beneficially owned by Larry Burstein, (b) 55,340
shares of common stock issuable upon the exercise of options beneficially
owned by Mr. Burstein and immediately exercisable, and (c) 37,200 shares
of common stock issuable upon conversion of Notes owned directly and
62,000 shares of common stock issuable upon the conversion of Notes
beneficially owned by Mr. Burstein. Mr. Burstein is Ms. Slutsky's spouse.

(20) Consists of 104,292 shares of common stock.

(21) Consists of 117,425 shares of common stock.

(22) Consists of 105,140 shares of common stock.

(23) Consists of 148,164 shares of common stock.

(24) Consists of (a) 133,333 shares of common stock, and (b) 165,330 shares of
common stock issuable upon conversion of Notes.

(25) Consists of 222,268 shares of common stock.

(26) Consists of 298,696 shares of common stock. Mr. Horowitz, the managing
member of Grand Slam, LLC, is one of our directors.

(27) Consists of 298,140 shares of common stock.

(28) Consists of (a) 266,666 shares of common stock, and (b) 330,665 shares of
common stock issuable upon conversion of Notes.

(29) Consists of (a) 6,666 shares of common stock, (b) 26,344 shares of common
stock issuable upon the exercise of options that are immediately
exercisable, and (c) 8,266 shares of common stock issuable upon conversion
of Notes. Mr. Rosenberg is also one of our directors.

(30) Consists of (a) 13,334 shares of common stock, and (b) 16,533 shares of
common stock issuable upon conversion of Notes.

(31) Consists of (a) 13,334 shares of common stock, and (b) 16,533 shares of
common stock issuable upon conversion of Notes.

(32) Consists of (a) 13,334 shares of common stock, and (b) 16,533 shares of
common stock issuable upon conversion of Notes.

(33) Consists of (a) 24,482 shares of common stock, and (b) 24,800 shares of
common stock issuable upon conversion of Notes.

(34) Consists of (a) 20,000 shares of common stock, and (b) 24,800 shares of
common stock issuable upon conversion of Notes.

(35) Consists of (a) 66,666 shares of common stock, and (b) 82,665 shares of
common stock issuable upon conversion of Notes.

(36) Consists of (a) 400,000 shares of common stock owned directly and 782,193
beneficially owned MHR Capital Partners LP, and 104,473 beneficially owned
MHR Capital Partners (100) LP, and (b) 496,000 shares of common stock
issuable upon conversion of Notes owned directly and (c) 969,919 shares of
common stock beneficially owned on behalf of MHR Capital Partners LP
issuable upon the conversion of Notes and 129,547 shares of common stock

beneficially owned on behalf of MHR Capital Partners (100) LP issuable
upon conversion of Notes.

(37) Consists of (a) 782,193 shares of common stock, and (b) 969,919 shares of
common stock issuable upon conversion of Notes.

(38) Consists of (a) 104,473 shares of common stock, and (b) 129,547 shares of
common stock issuable upon conversion of Notes.

(39) Consists of (a) 80,500 shares of common stock, (b) 17,336 shares of common
stock issuable upon the exercise of options that are immediately
exercisable, (c) Warrants to purchase 88,889 shares of common stock, and
(d) 88,889 shares of common stock issuable upon conversion of Notes.

(40) Consists of (a) Warrants to purchase 22,222 shares of common stock, and
(b) 22,222 shares of common stock issuable upon conversion of Notes.

(41) Consists of (a) 212,200 shares of common stock, and (b) 36,000 shares of
common stock issuable upon the exercise of options that are immediately
exercisable. Mr. Burstein, the president, a director and the principal
equity holder of Unity, is one of our directors.

(42) Consists of Warrants to purchase 10,000 shares of common stock.

(43) Consists of Warrants to purchase 25,000 shares of common stock.

(44) Consists of Warrants to purchase 7,500 shares of common stock.

(45) Consists of Warrants to purchase 7,500 shares of common stock.

PLAN OF DISTRIBUTION

The selling securityholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling securityholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.

The selling securityholders may use any one or more of the following
methods when disposing of shares or interests therein:

o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

o block trades in which the broker-dealer will attempt to sell
the shares as agent, but may position and resell a portion of
the block as principal to facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

o an exchange distribution in accordance with the rules of the
applicable exchange;

o privately negotiated transactions;

o short sales effected after the date of this prospectus;

o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or
otherwise;

o broker-dealers may agree with the selling securityholders to
sell a specified number of such shares at a stipulated price
per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The selling securityholders may, from time to time, pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under a supplement to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending the list of selling securityholders to include the
pledgee, transferee or other successors in interest as selling securityholders
under this prospectus. The selling securityholders also may transfer the shares
of common stock in other circumstances, in which case the transferees, pledgees
or other successors in interest will be the selling beneficial owners for
purposes of this prospectus.

In connection with the sale of our common stock or interests therein,
the selling securityholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the common stock in the course of hedging the positions they
assume. The selling securityholders may also sell shares of our common stock
short and deliver these securities to close out their short positions, or loan
or pledge the common stock to broker-dealers that in turn may sell these
securities. The selling securityholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).

The aggregate proceeds to the selling securityholders from the sale of
the shares of common stock offered by them will be the purchase price of the
common stock less discounts or commissions, if any. Each of the selling
securityholders reserves the right to accept and, together with their agents
from time to time, to reject, in whole or in part, any proposed purchase of
common stock to be made directly or through agents. We will not receive any of
the proceeds from this offering.

The selling securityholders also may resell all or a portion of the
shares in open market transactions in reliance upon Rule 144 under the
Securities Act of 1933, as amended, provided that they meet the criteria and
conform to the requirements of that rule.

The selling securityholders and any underwriters, broker-dealers or
agents that participate in the sale of the common stock or interests therein may
be "underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act of
1933, as amended. Discounts, concessions, commissions and similar selling
expenses, if any, that can be attributed to the sale of the securities will be
paid by the selling securityholders and/or the purchasers. Each selling
securityholder has represented and warranted to us that it acquired the
securities subject to this registration statement in the ordinary course of such
selling securityholder's business and, at the time of its purchase of such
securities such selling securityholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities. We
have advised each selling securityholder that it may not use shares registered
under this registration statement to cover short sales of common stock made
prior to the date on which this registration statement was declared effective by
the Securities and Exchange Commission. Selling securityholders who are
"underwriters" within the meaning of Section 2(11) of the Securities Act of
1933, as amended, will be subject to the prospectus delivery requirements of the
Securities Act of 1933, as amended.

To the extent required, the shares of our common stock to be sold, the
names of the selling securityholders, the respective purchase prices and public
offering prices, the names of any agents, dealers or underwriters, any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this
prospectus.

In order to comply with the securities laws of some states, if
applicable, the common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the
common stock may not be sold unless the common stock has been registered or
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.

We have advised the selling securityholders that the anti-manipulation
rules of Regulation M under the Securities and Exchange Act of 1934, as amended,
may apply to sales of shares in the market and to the activities of the selling
securityholders and their affiliates. In addition, we will make copies of this
prospectus (as it may be supplemented or amended from time to time) available to
the selling securityholders for the purpose of satisfying the prospectus
delivery requirements of the Securities Act of 1933, as amended. The selling
securityholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act of 1933, as amended.

DESCRIPTION OF SECURITIES TO BE REGISTERED

Common Stock

We are authorized to issue 20,000,000 shares of our common stock,
$0.001 par value per share, of which 10,116,769 shares were issued and
outstanding as of April 27, 2006.

Each outstanding share of common stock entitles the holder to one vote
on all matters requiring a vote of stockholders. There is no right to cumulative
voting. In the event of voluntary or involuntary liquidation, all common
stockholders are entitled to a pro rata distribution of our assets remaining
after payment of the claims of creditors and of any preferred stock having
liquidation rights superior to those of the common stock. There are no shares of
preferred stock currently outstanding. Common stock holders have no preemptive
rights to subscribe for additional shares of our equity securities. Holders of
our common stock are entitled to dividends if, as and when declared by our board
of directors. To date, we have never paid a dividend on our common stock.

Transfer Agent and Registrar

The transfer agent for our common stock is American Stock Transfer and
Trust Co.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be
passed upon for us by Foley & Lardner LLP, San Diego, California.

EXPERTS

Goldstein & Ganz, P.C. ("Goldstein and Ganz"), an independent
registered public accounting firm, has audited our consolidated financial
statements at January 31, 2006 and 2005, and for the two years in the period
ended January 31, 2006, as set forth in their report included with our Form
10-KSB for the fiscal year ended January 31, 2006. We have incorporated these
financial statements into this prospectus by reference in reliance on Goldstein
& Ganz's reports given on their authority as experts in accounting and auditing.