To: Roy F who wrote (5043 ) 8/30/2002 5:04:57 PM From: StockDung Respond to of 6847 DILUTION-> As of August 29, 2002 we had issued and outstanding 81,060,108 shares of common stock. At that date, there were an additional 30,720,181 shares of common stock reserved for possible future issuances as follows: o options to purchase 7,151,518 shares at an exercise price between $0.91 and $23.38 per share. We have registered the shares issuable upon exercise of the options under the Securities Act; o warrants to purchase 20,144,302 shares at a price between $0.70 and $18.00 per share. Of the 20,144,302 shares, we have previously registered a total of 8,228,230 shares issuable upon exercise of these warrants. This prospectus covers an additional 11,428,572 shares of common stock issuable upon exercise of warrants, which shares will be freely tradable without restriction (subject to prospectus delivery requirements) on the effective date of the registration statement. The remaining 487,500 shares will be deemed to be "restricted securities" when issued; and -9- o 3,424,361 shares issuable upon exercise of options under the Company's stock incentive plans which have not been granted as of August 29, 2002. We have registered the shares issuable upon exercise of the options. The shares which will be deemed "restricted securities" may be sold under Rule 144. Rule 144 permits sales of "restricted securities" by any person, whether or not an affiliate of the issuer, after a one year holding period. At that time, sales can be made subject to the Rule's volume and other limitations and after two years by non-affiliates without adhering to Rule 144's volume or other limitations. In general, an "affiliate" is a person with the power to manage and direct our policies. The SEC has stated that, generally, executive officers and directors of an entity are deemed affiliates of the issuing entity.