Further from IR on the shares etc: Aside from

Further from IR on the shares etc:

Aside from the election of directors and the ratification of the auditors, two very important items are up for vote:  increase in the authorized shares and the move of the registration of the corporation from Delaware to Nevada.

If you were on the recent conference call, management is not asking for the increase in authorized to dilute stockholders going forward, but rather to deal with the legacy of the past.  The proxy statement outlines why we need the increase in authorized.  The increase in authorized is needed for the shares held in reserve.  The shares may never be converted to common, but we must have the reserve, nonetheless:

As of June 24, 2011, the total shares of Common Stock issued and outstanding and reserved for issuance upon the exercise of outstanding warrants, options, and the conversion of outstanding shares of preferred stock totaled 624,583,351 shares, including:

• 243,363,531 shares of Common Stock;

• 155,625,048 shares reserved for issuance pursuant to warrants to purchase Common Stock;

• 1,900,000 shares reserved for issuance pursuant to options to purchase Common Stock;

• 127,994,772 shares reserved for issuance upon the conversion of shares of our outstanding series of preferred stock; and

• 96,000,000 shares of Common Stock reserved for issuance pursuant to warrants issuable upon the attainment of milestones under certain agreements to which the Company is a party.

It is important to note IF the warrants are exercised, many of the warrants would result in money coming into the company.

The other important issue of the move to Nevada.  This is simply to save a lot of money that would be required to pay the state of Delaware in franchise fees.  For example, with the increase in authorized, the tax that will be due to the state of could go as high as $180,000/year.  With the move to Nevada, the fee would be around $475.00.  The proxy outlines the similarities and differences between being registered in either state.  The company does not intend to operate any differently with a move to Nevada.  It is simply to keep the money in house to create shareholder value, rather than turn it over in the form of a tax.