ELI Elite Pharmaceuticals,

SELLING STOCKHOLDERS

On July 17, 2007 we issued 5,000 shares of Series C Preferred Stock convertible into 2,155,167 shares of our common stock and warrants to purchase 711,199 shares of our common stock in a private placement (the "JULY PRIVATE PLACEMENT"). Pursuant to the registration rights agreement related to such private placement, we agreed to file, at our expense, a registration statement, of which this prospectus is a part, with the SEC to register for resale, from time to time, the 2,155,167 shares of our common stock issuable upon conversion of the shares of Series C Preferred Stock, 1,353,756 shares of our common stock issuable in satisfaction of certain Series C Preferred Stock dividend obligations, and 711,199 shares of our common stock issuable upon exercise of the warrants issued in the private placement.

Of these shares, we are registering 806,896 shares of our common stock issuable upon conversion of shares of Series C Preferred Stock, 506,851 shares of our common stock issuable in satisfaction of certain Series C Preferred Stock dividend obligations, and 242,068 shares of our common stock issuable upon exercise of warrants, to permit the Selling Stockholders to offer these shares for resale from time to time. The Selling Stockholders may sell all, some or none of the shares covered by this prospectus. For more information, see the section of this prospectus entitled "PLAN OF DISTRIBUTION." Please see "Supplemental Information Regarding the July Private Placement and the Selling Stockholders" for additional information relating to the July Private Placement and the Selling Stockholders.

The table below presents information as of January 2, 2008, regarding the Selling Stockholders and the shares of our common stock that they may offer and sell from time to time under this prospectus. The information is based on information provided by or on behalf of the Selling Stockholders. Except as noted in the footnotes, no Selling Stockholder has had, within the past three years, any position, office, or material relationship with us or any of our predecessors or affiliates. The table has been prepared on the assumption that all shares offered under this prospectus will be sold to parties unaffiliated with the Selling Stockholders. Except as indicated below the Selling Stockholders have sole voting and investment power with their respective shares.

 SHARES BENEFICIALLY OWNED
 AFTER OFFERING
 NUMBER OF
 SHARES
 BENEFICIALLY
 NAME OF SELLING OWNED PRIOR TO NUMBER OF NUMBER OF PERCENTAGE
 STOCKHOLDER(1) OFFERING SHARES OFFERED SHARES(2) OF CLASS(3)
Consonance Capital
Master Account LP(4) 724,717(5) 724,717(5) 0 0

Midsummer
Investment Ltd.(6) 2,640,431(7) 831,098(8) 1,809,333 7.8%

(1) Selling Stockholders means the persons listed in the table above, as well as the pledgees, assignees or other successors in interest to the Selling Stockholders.

(2) Assumes that the Selling Stockholders dispose of all the shares of common stock covered by this prospectus and do not acquire or dispose of any additional shares of common stock. The Selling Stockholders are not representing, however, that any of the shares covered by this prospectus will be offered for sale, and the Selling Stockholders reserve the right to accept or reject, in whole or in part, any proposed sale of shares.

(3) The percentage of common stock beneficially owned is based on 21,299,667 shares of common stock (excluding 100,000 treasury shares) outstanding on July 17, 2007. Notwithstanding the inclusion of the warrants and Series B and Series C Preferred Stock beneficially owned by the referenced investors in the beneficial ownership calculation, the warrants and Series B and Series C Preferred Stock provide that the holder of the warrants and Series B and Series C Preferred Stock, as applicable, shall not have the right to exercise any portion of the warrants and Series B and Series C Preferred Stock, respectively, and we shall not effect any exercise of such warrants and Series B and Series C Preferred Stock, as applicable, to the extent that after giving effect to such issuance after exercise such holder of the warrants and Series B and Series C Preferred Stock, as applicable, together with his, her or its affiliates, would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such issuance. Such 4.99% limitation may be waived by each holder upon not less than 61 days prior notice to change such limitation to 9.99% of the number of shares of common stock outstanding immediately after giving effect to such issuance.

(4) Mr. Mitchell J. Blutt has the power to vote or dispose of the shares.

(5) Consists of 375,862 shares of common stock issuable upon conversion of shares of Series C Preferred Stock, 236,097 dividend shares and 112,758 shares of common stock issuable upon exercise of warrants.

(6) Midsummer Capital, LLC is the investment advisor to Midsummer Investment, Ltd. By virtue of such relationship, Midsummer Capital, LLC may be deemed to have dispositive power over the shares owned by Midsummer Investment, Ltd. Midsummer Capital, LLC disclaims beneficial ownership of such shares. Mr. Michel Amsalem and Mr. Scott Kaufman have delegated authority from the members of Midsummer Capital, LLC with respect to the shares of common stock owned by Midsummer Investment, Ltd. Messrs. Amsalem and Kaufman may be deemed to share dispositive power over the shares of our common stock owned by Midsummer Investment, Ltd. Messrs. Amsalem and Kaufman disclaim beneficial ownership of such shares of our common stock and neither person has any legal right to maintain such delegated authority.

(7) Consists of 1,612,367 shares of common stock issuable upon conversion of shares of Series C Preferred Stock, 270,754 dividend shares and 757,310 shares of common stock issuable upon exercise of warrants. Does not include any shares of common stock issuable in satisfaction of certain Series B Preferred Stock dividend obligations from the March 15, 2006 private placement.

(8) Consists of 431,034 shares of common stock issuable upon conversion of shares of Series C Preferred Stock, 270,754 dividend shares and 129,310 shares of common stock issuable upon exercise of warrants.

SUPPLEMENTAL INFORMATION REGARDING
THE JULY PRIVATE PLACEMENT AND THE SELLING STOCKHOLDERS

DESCRIPTION OF THE JULY PRIVATE PLACEMENT

In the July Private Placement, we sold, through Oppenheimer & Company, Inc., the placement agent ("PLACEMENT AGENT"), the remaining 5,000 shares of our Series C Preferred Stock, at a price of $1,000 per share, each share convertible (at $2.32 per share) into 431.0345 shares of our common stock, or an aggregate of 2,155,167 shares of our common stock. Purchasers of the Series C Preferred Stock (the "INVESTORS") also acquired warrants to purchase shares of common stock (the "WARRANTS"), exercisable on or prior to July 17, 2012. The Warrants represent the right to purchase shares of our common stock in an amount equal to 30% of the aggregate number of shares of common stock into which the Series C Preferred Stock purchased by the Investors may be converted as of the date of issuance, or an aggregate of 646,544 shares of common stock, at an exercise price of $3.00 per share. If at any time after one year from the date of issuance of the Warrants there is no effective registration statement registering, or no current prospectus available for, the resale of the shares of common stock underlying the Warrants by the holder of such Warrants, then the Warrants may also be exercised at such time by means of a "cashless exercise."

The private placement of the Series C Preferred Stock and the Warrants was made pursuant to a Securities Purchase Agreement, dated as of July 17, 2007 (the "PURCHASE AGREEMENT"), between us and the Investors. For so long as the Series C Preferred Stock is outstanding, if at any time we issue common stock or securities convertible or exercisable for common stock, the holders of the Series C Preferred Stock will have preemptive rights to purchase their pro rata share of the common stock or securities convertible or exercisable for common stock on the same terms, conditions and price provided for in such issuance; provided, that this right is subject to exceptions as set forth in the Purchase Agreement.

The gross proceeds of the July Private Placement were $5,000,000 before payment of $350,000 in commissions to the Placement Agent and its selected dealers and $18,000 in expenses incurred by the Placement Agent and its selected dealers. Pursuant to the placement agent agreement, we issued to the Placement Agent and its designees warrants (the "PLACEMENT WARRANTS") to purchase an aggregate of 64,655 shares of common stock. Such Placement Warrants are at an exercise price of $3.00 per share, exercisable on or prior to July 17, 2012.

Pursuant to the Registration Rights Agreement, dated as of July 17, 2007 (the "REGISTRATION RIGHTS AGREEMENT"), holders of the Series C Preferred Stock are provided demand and piggy-back registration rights at our expense. We have filed the registration statement (of which this prospectus forms a part) under the Securities Act of 1933, as amended (the "ACT" or "SECURITIES ACT"), to register the resale of the shares of common stock (the "REGISTRABLE SECURITIES") issuable upon conversion of the Series C Preferred Stock, upon exercise of the Warrants, and as payment of dividends on the Series C Preferred Stock within

30 days of the closing of the private placement (the "FILING DATE") as set forth in the Registration Rights Agreement, subject to limitations based on written, oral, or other guidance provided by the Commission otherwise limiting the securities which may be included in the registration statement ("SEC GUIDANCE"). Subject to SEC Guidance, if (i) the Initial Registration Statement (as defined in the Registration Rights Agreement) is not filed on or prior to its Filing Date (as defined in the Registration Rights Agreement); (ii) as to 7,000,000 of the Registrable Securities, subject to certain adjustments (collectively, the "INITIAL SHARES"), a registration statement registering for resale all of the Initial Shares is not declared effective by the SEC by November 13, 2007 (or December 13, 2007 in the case of a "full review" by the SEC of the Initial Registration Statement); or (iii) all of the Registrable Securities, other than the Initial Shares, are not registered for resale pursuant to one or more effective Registration Statements on or before February 28, 2008, (any such failure or breach being referred to as an "EVENT", and the date on which such Event occurs, the "EVENT DATE"), then, in addition to any other rights the holders of Registrable Securities may have under the registration statement or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, we have agreed to pay to each holder of Registrable Securities an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate purchase price paid by such holder pursuant to the Purchase Agreement for any unregistered Registrable Securities then held by such holder (calculated as if all convertible securities had been fully converted). In no event will we be liable for liquidated damages under the Registration Rights Agreement (1) with respect to any Warrants or shares of common stock issuable upon exercise of the Warrants; and (2) in excess of 1.5% of the Subscription Amount (as defined in the Purchase Agreement) in any 30-day period. In addition, the maximum aggregate liquidated damages payable to a holder of Registrable Securities under the Registration Rights Agreement shall be 15% of the aggregate Subscription Amount paid by such holder.

Each of the Investors has represented that it is an "ACCREDITED INVESTOR" and has agreed that the securities issued in the July Private Placement are to bear a restrictive legend against resale without registration under the Act. The Series C Preferred Stock and Warrants were sold by us pursuant to the exemption from registration afforded by Section 4(2) of the Act and Regulation D thereunder.

The rights and preferences of the Series C Preferred Stock are governed by the Certificate of Designations, Preferences and Rights of Series C Preferred Stock filed with the Secretary of State of the State of Delaware on April 24, 2007, as amended by the Certificate of Correction of the Certificate of Designations, Preferences and Rights of Series C Preferred Stock filed with the Secretary of State of the State of Delaware on April 25, 2007 (the "CERTIFICATE OF DESIGNATIONS"). Pursuant to the Purchase Agreement, the Series C Preferred Stock purchased by the Investors in the July Private Placement are to accrue dividends, commencing on July 17, 2007, at the rate of 8% per annum on their purchase price of $1,000 per share (increasing to 15% per annum after April 24, 2009) payable quarterly on January 1, April 1, July 1 and October 1, payable in cash or shares of common stock, which will be valued solely for such purpose at 95% of the average Volume-Weighted Average Price ("VWAP") (as defined in the Certificate of Designations) for the 20 consecutive trading days ending on the trading day that is immediately

prior to the dividend payment date, in accordance with the terms of the Certificate of Designations. Any dividends, whether paid in cash or shares of common stock, that are not paid within five trading days, following a dividend payment date, shall continue to accrue and shall entail a late fee, which must be paid in cash, at the rate of 18% per annum or the lesser rate permitted by applicable law (such fees to accrue daily, from the dividend payment date through and including the date of payment). No payment or dividends may be payable on common stock or any other capital stock ranked junior to the Series C Preferred Stock prior to the satisfaction of the dividend obligation on the Series C Preferred Stock.

Each share of Series C Preferred Stock will be entitled to a preference equal to the per share purchase price ($1,000 subject to adjustment) plus any accrued but unpaid dividends thereon and any other fees or liquidated damages owing thereon upon our liquidation, dissolution or winding-up, whether voluntary or involuntary ("LIQUIDATION"), which preference ranks PARI PASSU with our Series B 8% Convertible Preferred Stock, par value $0.01 per share (the "SERIES B PREFERRED STOCK" and together with the Series C Preferred Stock, the "PREFERRED STOCK") and senior to any other capital stock ranked junior to the Series C Preferred Stock. A Fundamental Transaction (as defined in the Certificate of Designations) or Change of Control Transaction (as defined in the Certificate of Designations) will not be deemed a Liquidation under the Certificate of Designations.

The holders of Series C Preferred Stock will not have any voting rights except as specifically provided in the Certificate of Designations or as required by law. However, as long as any shares of Series C Preferred Stock are outstanding, we will not, without the prior affirmative vote of holders of at least 70% of the then outstanding shares of the Series C Preferred Stock and our Series B Preferred Stock collectively, (i) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend the Certificate of Designations; (ii) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation senior to or otherwise PARI PASSU with the Preferred Stock; (iii) amend our certificate of incorporation, by-laws or other charter documents in any manner that adversely affects any rights of the holders of the Preferred Stock; (iv) increase the authorized number of shares of Preferred Stock; (v) other than Permitted Indebtedness (as defined in the Certificate of Designations), until April 24, 2010, incur any indebtedness for borrowed money of any kind; (vi) other than Permitted Liens (as defined in the Certificate of Designations), until April 24, 2010, incur any liens of any kind; (vii) repay or repurchase other than more than a DE MINIMIS number of shares of common stock or securities convertible or exchangeable into common stock, other than as permitted by the Certificate of Designations; (viii) pay cash dividends or distributions on any of our securities junior to the Preferred Stock; or (ix) enter into any agreement or understanding with respect to the foregoing. Notwithstanding the above, the Registrant may issue any security issued in connection with a Strategic Transaction (as defined in the Certificate of Designations) that ranks as to dividends, redemption or distribution of assets upon a Liquidation PARI PASSU with or junior to the Preferred Stock without the prior affirmative vote of holders of at least 70% of the then outstanding shares of Preferred Stock.

Each share of Series C Preferred Stock is initially convertible into 431.0345 shares of common stock. The conversion price per share for the Series C Preferred Stock is equal to $2.32,

subject to adjustment for certain events, including dividends, stock splits, combinations and the sale of common stock or securities convertible into or exercisable for common stock at a price less than the then applicable conversion price. If we do not meet our share delivery requirements set forth in the Certificate of Designations, the holders of Preferred Stock shall be entitled to
(i) liquidated damages, payable in cash; and (ii) cash equal to the amount by which the cost of the shares of common stock such holder is required by its brokerage firm to purchase (in an open market transaction or otherwise) for delivery in satisfaction of a sale by such holder of the shares of common stock issuable upon conversion of such holder's Series C Preferred Stock which such holder was entitled to receive upon the conversion at issue exceeds the product of (1) the aggregate number of shares of common stock that such holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed.

We may force conversion of our Series C Preferred Stock in the event that we provide written notice to the holders of the Series C Preferred Stock that the VWAP for each 20 consecutive trading day period during a Threshold Period (as defined in the Certificate of Designations) of common stock exceeded $5.38 (subject to adjustment) and the average volume the trading days during such Threshold Period exceed 50,000 shares of common stock (subject to adjustment for forward and reverse stock splits, recapitalizations, stock dividends and the like).

Upon the occurrence of certain Triggering Events (as defined in the Certificate of Designations) each holder of the Series C Preferred Stock shall have the right, exercisable at the sole option of such holder, to require us to redeem each share of such holder's Series C Preferred Stock for cash in an amount equal to 130% of the stated value, all accrued but unpaid dividends thereon and all liquidated damages and other costs, expenses or amounts due in respect of the Series C Preferred Stock (the "TRIGGERING REDEMPTION AMOUNT"); provided, however, that each Investor has waived its right, pursuant to the Certificate of Designations, to require us to redeem any or all shares of Series C Preferred Stock purchased under the Purchase Agreement upon our failure to cause the Conversion Shares Registration Statement (as defined in the Certificate of Designations) to be declared effective by the SEC on or prior to January 23, 2008; provided further, that if the Conversion Shares Registration Statement is not declared effective by the SEC on or prior to April 16, 2008, each Investor shall have the right to require redemption as provided under the Certificate of Designations. Upon certain Triggering Events, each holder of Series C Preferred Stock shall have the right, exercisable at the sole option of such holder, to require us to redeem each share of Series C Preferred Stock for shares of common stock equal to the number of shares of common stock equal to the Triggering Redemption Amount divided by 85% of the average of the VWAP for the 10 consecutive trading days immediately prior to the date of the redemption. If at any time the Securities and Exchange Commission, our auditors, American Stock Exchange (or similar trading exchange) or any other governmental or regulatory authority having jurisdiction over us determines that a Triggering Event for which a holder shall be entitled to a cash redemption constitutes a condition for redemption which is not solely within our control (as set forth in Item 28 of Rule 5-02 of Regulation S-X of the Securities Exchange Act of 1934, as amended), or that as a result of any such Triggering Event, the Series C Preferred Stock shall not be included in our balance sheet under the heading "stockholder equity," then the holders

of Series C Preferred Stock shall not be entitled to receive a cash payment, but instead shall be entitled to receive shares of common stock.

We may redeem all of the Series C Preferred Stock outstanding, at any time after April 24, 2009, for a redemption price, payable in cash, for each share of Series C Preferred Stock equal to the sum of (i) 150% of the stated value; (ii) accrued but unpaid dividends thereon; and (iii) all liquidated damages and other amounts due in respect of the Series C Preferred Stock.

LIMITATION ON SECURITIES INCLUDED HEREIN

Prior to the July Private Placement, we consummated an offering of such securities which closed on April 24, 2007 (the "APRIL PRIVATE PLACEMENT"). The resale of shares of common stock issuable upon the conversion of, or otherwise pursuant to, the shares of Series C Preferred Stock sold in the April Private Placement, and the shares of common stock issuable upon the exercise of the Warrants sold in the April Private Placement, was registered by us in a registration statement under the Securities Act (Registration No. 333-143246), declared effective by the SEC on July 10, 2007 (the "PRIOR REGISTRATION"). The registration statement of which this prospectus forms a part registers the resale of shares of common stock attributable to purchasers in the July Private Placement who were not, and the affiliates of which were not, included in the Prior Registration. We refer to the purchasers in the July Private Placement so excluded from the registration statement of which this prospectus forms a part as the "EXCLUDED PURCHASERS."

PROCEEDS OF THE PRIVATE PLACEMENT

Our net proceeds from the July Private Placement were $4,632,000, after the payment of $368,000 in placement agent fees and related expenses. Assuming the exercise in full of the Warrants, the aggregate net proceeds of the July Private Placement would be $6,765,597.

Based upon a closing market price of $2.69 per share of common stock on the American Stock Exchange on July 17, 2007, the aggregate dollar value of the securities that we have registered for resale in the registration statement of which this prospectus forms a part is $4,185,142.35, or $11,352,128.18 if we include the Excluded Purchasers.

POTENTIAL PAYMENTS REQUIRED DURING INITIAL YEAR

Set forth below is disclosure of the dollar amount of each payment or potential payment(1) (including the value of any payments to be made in common stock) in connection with the July Private Placement that we have made or may be required to make to any Selling Stockholder, any affiliate of a Selling Stockholder, or any person with whom any Selling Stockholder has a contractual relationship regarding the July Private Placement (including any interest payments, liquidated damages, payments made to "finders" or "placement agents," and any other payments or potential payments) during the initial year. We have excluded from the table below any shares of common stock to be issued during the initial year upon the conversion of the Series C Preferred Stock.

The total possible payments to the Selling Stockholders, and their affiliates, in the first year following the closing of the July Private Placement is $430,560, equaling the total value, assuming all cash payments, of dividends payable on the Series C Preferred Stock purchased in the July Private Placement, plus maximum partial liquidated damages for which we may potentially be liable, as described more fully below.

 SERIES C PREFERRED POTENTIAL PARTIAL
 STOCK DIVIDENDS LIQUIDATED
SELLING STOCKHOLDER PAYABLE IN FIRST YEAR(2) DAMAGES(3) TOTAL
------------------- ------------------------ -------- -----
Consonance Capital Master Account L.P. $69,760 $130,800(4) $200,560

Midsummer Investment, Ltd. $80,000 $150,000(5) $230,000

TOTAL $149,760 $280,800 $430,560
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(1) Listed below are payments that we may potentially be required to make to a Selling Stockholder, pursuant to the Certificate of Designations, the Purchase Agreement, and the Registration Rights Agreement, but that cannot properly be valued currently as a result of the contingent nature of the payments and/or the need for future information which cannot be ascertained currently:

- LIQUIDATION PAYMENTS: Selling Stockholders may be entitled to liquidation payments, pursuant to the Certificate of Designations, however these payments cannot be valued unless and until the occurrence of an applicable dissolution or winding-up;

- PARTIAL LIQUIDATED DAMAGES: Selling Stockholders may be entitled to partial liquidated damages, pursuant to the Certificate of Designations, however, these payments cannot be valued because valuation is contingent on our failure, in the future, to properly issue and deliver shares of common stock upon conversion of Series C Preferred Stock;

- COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER CERTIFICATES UPON CONVERSION: Selling Stockholders may be entitled to partial liquidated damages, pursuant to the Certificate of Designations, however, these payments cannot be valued because valuation is contingent on our failure, upon a conversion by a Selling Stockholder, to deliver on a timely basis the certificate(s) evidencing the shares the Selling Stockholder is entitled to receive upon conversion;

- INDEMNIFICATION OF THE SELLING STOCKHOLDERS: Selling Stockholders may benefit from indemnification by us in certain situations, as provided in the Registration Rights Agreement.

Excluded from the table, above, are redemptions of shares of Series C Preferred Stock. For a discussion of both forced and optional redemptions, please see "Description of the Private Placement," above, under "Supplemental Information Regarding the July Private Placement and the Selling Stockholders."

Payments made to the placement agent in the July Private Placement for fees and related expenses is disclosed in this section, above, under the heading "PROCEEDS OF THE PRIVATE PLACEMENT."

(2) For purposes of this table, we disclosed the value of dividends payable to the Selling Stockholders on the Series C Preferred Stock purchased in the July Private Placement (the "SERIES C DIVIDENDS") for the first full year following the date of sale, assuming cash payment. This amount was calculated by multiplying the aggregate stated value of the shares of Series C Preferred Stock held by the Selling Stockholders by 8%, the rate at which the dividends accrue during the one-year period, in accordance with the Certificate of Designations. On April 24, 2009, the rate at which dividends accrue on the Series C Preferred Stock will increase to 15% per annum. Series C Dividends that we fail to pay, whether in cash or shares of common stock, within the time period prescribed in the Certificate of Designations, continue to accrue and entail a late fee, which must be paid in cash, at the rate of 18% per annum or lesser rate permitted by law, accruing daily until and including the date of payment.

(3) The data provided in this table represents the maximum possible liquidated damages payable to the Selling Stockholders under the Registration Rights Agreement, as described below. Pursuant to the Registration Rights Agreement, upon the occurrence of certain events, we may be liable for partial liquidated damages, with certain limitations, payable in cash to the Selling Stockholders. On each date on which an applicable event occurs and on each anniversary of such date (if such event has not been cured) until cured, we must pay to each Selling Stockholder 1.5% of the aggregate purchase price paid by each Selling Stockholder pursuant to the Purchase Agreement for any unregistered Registrable Security, as defined thereunder, then held (calculated as if all convertible securities had been fully converted). Our liability for liquidated damages is limited, however, to 1.5% of the aggregate subscription amount of a Selling Stockholder in any 30-day period, and the maximum aggregate liquidated damages payable to a Selling Stockholder is 15% of the aggregate subscription amount paid by such Selling Stockholder under the Purchase Agreement. We are not liable for the payment of partial liquidated damages on Warrants or Warrant Shares. To date, we have incurred a total of $25,078.25 in liquidated damages payable to the Selling Stockholders.

(4) Represents maximum partial liquidated damages payable based on 872 shares of Series C Preferred Stock. To date, we have incurred $11,681.75 in liquidated damages payable to the Selling Stockholder.

(5) Represents maximum partial liquidated damages payable based on 1,000 shares of Series C Preferred Stock. To date, we have incurred $13,396.50 in liquidated damages payable to the Selling Stockholder.

POTENTIAL PROFIT

JULY PRIVATE PLACEMENT - TOTAL POSSIBLE PROFIT AND SHARES; COMBINED
MARKET PRICE OF UNDERLYING SECURITIES; DISCOUNT

Set forth below is disclosure of the following:

o the total possible profit the Selling Stockholders could realize as a result of the conversion discount for the securities underlying the Series C Preferred Stock and Warrants;

o the total possible shares underlying the Series C Preferred Stock and Warrants (assuming no cash dividend payments, complete conversion of the shares of preferred stock and complete exercise of the warrants) of the Selling Stockholders;

o the combined market price of the total number of shares underlying the Series C Preferred Stock and Warrants of the Selling Stockholders, calculated by using the market price per share on the date of the sale of the Series C Preferred and Warrants and the total possible shares underlying the Series C Preferred Stock and Warrants;

o the total possible shares the Selling Stockholders may receive and the combined conversion price of the total number of shares underlying the Series C Preferred Stock and Warrants of the Selling Stockholders calculated by using the conversion/exercise price on the date of the sale of the Series C Preferred Stock and Warrants and the total possible number of shares the Selling Stockholders may receive; and

o the total possible discount to the market price as of the date of the sale of the Series C Preferred Stock and Warrants, calculated by subtracting the total conversion/exercise price on the date of the sale of the Series C Preferred Stock and Warrants from the combined market price of the total number of shares underlying the Series C Preferred Stock and Warrants on that date.

 TOTAL
 POSSIBLE
 DISCOUNT
 TO THE
 COMBINED MARKET
 CONVERSION & PRICE
 COMBINED EXERCISE OF THE
 SHARES OF MARKET PRICE CONVERSION PRICE SERIES C
 SHARES OF COMMON STOCK OF SHARES PRICE OF OF SHARES PREFERRED
 COMMON STOCK SHARES OF UNDERLYING UNDERLYING SHARES EXERCISE UNDERLYING STOCK
 UNDERLYING COMMON THE SERIES C SERIES C UNDERLYING PRICE OF SERIES C & WARRANTS
 THE SERIES C STOCK PREFERRED PREFERRED SERIES C SHARES PREFERRED AS OF THE
SELLING PREFERRED UNDERLYING STOCK & STOCK & PREFERRED UNDERLYING STOCK & DATE OF
STOCKHOLDER STOCK WARRANTS WARRANTS WARRANTS(1) STOCK(2) WARRANTS(3) WARRANTS SALE
----------- ------------ ---------- -------- ---------- ----------- ----------- ---------- ----------

Consonance
Capital
Master
Account L.P. 375,862 112,758 488,620 $1,314,387.80 $871,999.84 $338,274.00 $1,210,273.84 $104,113.96

Midsummer
Investment,
Ltd. 431,034 129,310 560,344 $1,507,325.36 $999,998.88 $387,930.00 $1,387,928.88 $119.396.48


TOTAL 806,896 242,068 1,048,964 $2,821,713.16 $1,871,998.72 $726,204 $2,598,202.72 $223,510.44
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(1) Using a market price of $2.69 per share, the closing price per share of common stock listed on the American Stock Exchange, as of July 17, 2007.

(2) Using a conversion price of $2.32 per share, pursuant to the Certificate of Designations.

(3) Using a Warrant exercise price of $3.00 per share, pursuant to the Purchase Agreement.

TOTAL POSSIBLE PROFIT AND SHARES; COMBINED MARKET PRICE OF SHARES
UNDERLYING OTHER SECURITIES OF THE COMPANY; DISCOUNT

Set forth in the below table(1) is disclosure of the following:

o the total possible profit to be realized by the Selling Stockholders as a result of any conversion discounts for securities underlying any warrants, options, notes, or other securities of ours that are held by the Selling Stockholders or any of their affiliates;

o the total possible shares to be received by the Selling Stockholders under the particular securities (assuming complete conversion/exercise);

o the combined market price of the total number of underlying shares, calculated by using the market price per share on the date of the sale of that other security and the total possible shares to be received;

o the total possible shares to be received and the combined conversion price of the total number of shares underlying that security calculated by using the conversion price on the date of the sale of that other security and the total possible number of underlying shares; and

o the total possible discount to the market price as of the date of the sale of that security, calculated by subtracting the total conversion/exercise price on the date of the sale of that other security from the combined market price of the total number of underlying shares on that date.

 COMBINED
 CONVERSION & TOTAL
 SHARES OF EXERCISE POSSIBLE
 COMMON MARKET PRICE PRICE OF DISCOUNT TO
 STOCK OF SHARES SHARES THE MARKET
 UNDERLYING UNDERLYING UNDERLYING PRICE OF THE
 OTHER OTHER OTHER OTHER
 WARRANTS, WARRANTS, WARRANTS, WARRANTS,
 OPTIONS, OPTIONS, OPTIONS, OPTIONS,
SELLING NOTES, OR NOTES, OR NOTES, OR NOTES, OR
STOCKHOLDER SECURITIES SECURITIES SECURITIES SECURITIES
 OF THE OF THE OF THE OF THE
 COMPANY COMPANY COMPANY COMPANY
 HELD HELD HELD HELD
 ---------- -------- -------- -------- --------
Consonance
Capital Master
Account L.P. - - - -

Midsummer
Investment,
Ltd. 1,884,000(1) $4,239,000 $4,710,000(2) ($471,000)


TOTAL 1,884,000 $4,239,000 $4,710,000 ($471,000)
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(1) Representing 1,256,000 shares of common stock underlying Series B Preferred Stock, 314,000 shares of common stock underlying First Class Series B Warrants, as defined below, and 314,000 shares of common stock underlying Second Class Series B Warrants, as defined below. March 15, 2006 is the date of sale for the Series B Preferred Stock. For purposes of the calculations in this table, we used the following prices, as of the date of sale of the Series B Preferred Stock: (a) $2.25, the closing price per share of our common stock, as listed on Yahoo! Finance; (b) $2.25, the conversion price per share of the Series B Preferred Stock, as provided in the Certificate of Designations, Preferences and Rights of Series B Preferred Stock, dated as of March 15, 2006 (the "SERIES B CERTIFICATE OF DESIGNATIONS"); (c) $2.75, the exercise price per share of the first class of warrants (the "FIRST CLASS SERIES B WARRANTS") issued in connection with the Series B Preferred Stock, as provided in the Securities Purchase Agreement, dated as of March 15, 2006 (the "SERIES B PURCHASE AGREEMENT"); and (d) $3.25, the price per share of the second class of warrants (the "SECOND CLASS SERIES B WARRANTS") issued in connection with the Series B Preferred Stock, as provided in the Series B Purchase Agreement.

(2) Calculated by taking the sum of (a) the number of shares of common stock underlying the Series B Preferred Stock multiplied by the conversion price per share, (b) the number of shares of common stock underlying the First Class Series B Warrants multiplied by the exercise price per share, and (c) the number of shares of common stock underlying the Second Class Series B Warrants multiplied by the exercise price per share.

ADJUSTMENTS TO CONVERSION PRICE AND EXERCISE PRICE

SERIES C PREFERRED STOCK

Set forth below is a description of provisions set forth in the Certificate of Designations that could result in a change in the conversion price per share upon the occurrence of certain events.

DESIGNATIONS) RESULTING ADJUSTMENT IN THE CONVERSION PRICE
--------------------- --------------------------------------------

"Stock Dividends and The Conversion Price is multiplied by a fraction, the
Stock Splits" numerator being the number of shares of common stock
 (excluding Treasury Shares) outstanding immediately
 before, and the denominator the number outstanding
 immediately after, such event.

"Subsequent Equity The Conversion Price is multiplied by a fraction, the
Sales,"at an effective numerator being the number of shares of common stock
price lower than issued and outstanding immediately prior to the
the then applicable Dilutive Issuance plus the number of shares of common
conversion price(1) stock which the offering price for such Dilutive
 Issuance would purchase at the then applicable
 Conversion Rate, and the denominator being the sum of
 the number of shares of common stock issued and
 outstanding immediately prior to the Dilutive
 Issuance and the number of shares so issued or
 issuable in connection with the Dilutive
 Issuance.(2)

"Subsequent Rights The Conversion Price is multiplied by a fraction, the
Offerings"(3) numerator being the number of shares of common stock
 outstanding on the date of issuance of such rights or
 warrants plus the number of shares which the
 aggregate offering price of the total number of
 shares so offered would purchase at such VWAP, and
 the denominator being the number of shares of common
 stock outstanding on the date of issuance of such
 rights or warrants plus the number of additional
 shares of common stock offered for subscription or
 purchase.(4)

"Pro Rata The Conversion Price, in each such case, in effect
Distributions" immediately prior to the record date fixed for
 determination of stockholders entitled to receive
 such distribution is multiplied by a fraction, the
 numerator being such VWAP less the then fair market
 value, on such record date, of the portion of such
 assets, evidence of indebtedness or rights or
 warrants so distributed applicable to one outstanding
 share of the common stock as determined by the Board
 of Directors in good faith, and the denominator being
 the VWAP determined as of the record date described
 above.

"Fundamental The Conversion Price is adjusted, for purposes of any
Transaction" such conversion, to apply to such Alternate
 Consideration based on the amount of Alternate
 Consideration issuable in respect of one share of
 common stock in such Fundamental Transaction, and we
 apportion the Conversion Price among the Alternate
 Consideration in a reasonable manner reflecting the
 relative value of any different components of the
 Alternate Consideration.(5)

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

(1) Excluding a reduction in the Exercise Price of the Warrants issued to the Selling Stockholders on the "Original Issue Date," as defined in the Certificate of Designations.

(2) In the event of an "Exempt Issuance," as defined in the Certificate of Designations, there is no adjustment of the Conversion Price despite circumstances that would otherwise merit an adjustment.

(3) We, while Series C Stock is outstanding, issue rights, options, or warrants to all holders of common stock entitling them to subscribe for or purchase shares of common stock at a price per share that is lower than the VWAP on the record date for the determination of stockholders entitled to receive such rights, options, or warrants.

(4) Such adjustment becomes effective immediately after the described record date. If any such rights, options, or warrants expire without being exercised, the Conversion Price as adjusted upon the issuance of the same shall be readjusted to the Conversion Price that would have been in effect had an adjustment been made on the basis that only additional shares of common stock so issued were the additional shares of common stock, if any, actually issued or sold on the exercise of such rights, options, or warrants and such additional shares of common stock if any, were issued or sold for the consideration actually received by us upon such exercise, plus the consideration, if any, actually received by us for the granting of all such rights, options, or warrants, whether or not exercised, except that such readjustment does not apply to prior conversions of the Series C Preferred Stock.

(5) If the holders of shares of common stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the holders of Series C Preferred Stock are to be given the same choice as to the Alternate Consideration it receives upon any conversion of the Series C Preferred Stock following such Fundamental Transaction.

WARRANTS

Set forth below is a description of provisions set forth in the Warrant that could result in a change in the exercise price per share upon the occurrence of certain events.

WARRANT) RESULTING ADJUSTMENT IN THE WARRANT EXERCISE PRICE
--------------------- --------------------------------------------------


"Stock Dividends and The Exercise Price is multiplied by a fraction, the
Splits" numerator being the number of shares of common stock
 (excluding Treasury Shares) outstanding immediately
 before, and the denominator the number outstanding
 immediately after, such event.

"Subsequent Equity The Exercise Price is multiplied by a fraction, the
Sales," at an effective numerator being the number of shares of common stock
price lower than the issued and outstanding immediately prior to the
then applicable Dilutive Issuance plus the number of shares of common
Conversion Price stock which the offering price for such Dilutive
 Issuance would purchase at the then

 applicable Conversion Price, and the denominator
 being the sum of the number of shares of common stock
 issued and outstanding immediately prior to the
 Dilutive Issuance and the number of shares so issued
 or issuable in connection with the Dilutive Issuance
 and the number of Warrant Shares issuable under the
 Form of Warrant, are to be increased such that the
 aggregate Exercise Price payable under the Form of
 Warrant, after taking into account the decrease in
 the Exercise Price, shall be equal to the aggregate
 Exercise Price prior to such adjustment.(1)

"Subsequent Rights The Exercise Price is multiplied by a fraction, the
Offerings"(2) numerator being the number of shares of common stock
 outstanding on the date of issuance of such rights or
 warrants plus the number of shares which the
 aggregate offering price of the total number of
 shares so offered would purchase at such VWAP, and
 the denominator being the number of shares of common
 stock outstanding on the date of issuance of such
 rights or warrants plus the number of additional
 shares of common stock offered for subscription or
 purchase.(3)

"Pro Rata Distributions" The Exercise Price, in each such case, in effect
 immediately prior to the record date fixed for
 determination of stockholders entitled to receive
 such distribution is multiplied by a fraction, the
 numerator being such VWAP less the then fair market
 value at such record date of the portion of such
 assets or evidence of indebtedness so distributed
 applicable to one outstanding share of the common
 stock as determined by the Board of Directors in good
 faith, and the denominator being the VWAP determined
 as of the record date described above.

"Fundamental The Exercise Price is adjusted, for purposes of any
Transactions" such exercise by the Warrant holder, to apply to such
 Alternate Consideration based on the amount of
 Alternate Consideration issuable in respect of one
 share of common stock in such Fundamental
 Transaction, and we apportion the Conversion Price
 among the Alternate Consideration in a reasonable
 manner reflecting the relative value of any different
 components of the Alternate Consideration.(4)

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

(1) Such adjustments are made whenever such shares of common stock or common stock Equivalents are issued. However, under no circumstance will such adjustments be made, paid or issued with respect to an Exempt Issuance.

(2) We, while Warrants are outstanding, issue rights, options, or warrants to all holders of common stock entitling them to subscribe for or purchase shares of common stock at a price per share that is lower than the VWAP on the record date for the determination of stockholders entitled to receive such rights, options, or warrants.

(3) Such adjustment becomes effective immediately after the described record date. If any such rights, options, or warrants expire without being exercised, the Conversion Price as adjusted upon the issuance of the same shall be readjusted to the Conversion Price that would have been in effect had an adjustment been made on the basis that only additional shares of common stock, if any, actually issued or sold on the exercise of such rights, options, or warrants and such additional shares of common stock, if any, were issued or sold for the consideration actually received by us upon such exercise, plus the consideration, if any, actually received by us for the granting of all such rights, options, or warrants, whether or not exercised, except that such readjustment does not apply to prior exercises of the Warrant.

(4) If the holders of shares of common stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the holders of Warrants are to be given the same choice as to the Alternate Consideration it receives upon any exercise of a Warrant following such Fundamental Transaction.

ANALYSIS OF PAYMENTS IN RELATION TO NET OFFERING PROCEEDS AND COMBINED TOTAL PROFITS

Set forth below is disclosure of the following:

o the gross proceeds paid or payable to us in the July Private Placement;

o all payments that have been made or that may be required to be made by us to the Selling Stockholders;

o the resulting net proceeds to us;

o the combined total possible profit to be realized by the Selling Stockholders and the Excluded Purchasers as a result of any conversion discounts regarding the securities underlying the Series C Preferred Stock and the Warrants and any other warrants, options, notes, or other securities of ours that are held by the Selling Stockholders or any affiliates of the Selling Stockholders; and

o the percentage of the total amount of all possible payments by us and the total possible discount to the market price of the shares underlying the Series C Preferred Stock and Warrants divided by the net proceeds to us from the sale of the Series C Preferred Stock and the Warrants, as well as the amounts of that resulting percentage averaged over the term of the warrants.

 COMBINED TOTAL
 POSSIBLE PROFIT
 REALIZABLE FROM
 CONVERSION POTENTIAL PAYMENTS
 DISCOUNTS IN PAYMENTS OR TO BE MADE BY US
 CONNECTION WITH POTENTIAL PLUS COMBINED TOTAL
 THE JULY PAYMENTS TO BE POSSIBLE PROFIT
 PRIVATE MADE BY US PLUS REALIZABLE FROM
 PLACEMENT AND COMBINED TOTAL CONVERSION
 ANY OTHER POSSIBLE PROFIT DISCOUNTS DIVIDED
 SECURITIES OF REALIZABLE FROM BY OUR NET
 PAYMENTS OR OURS HELD BY CONVERSION PROCEEDS(%)
 POTENTIAL NET PROCEEDS THE SELLING DISCOUNTS DIVIDED AVERAGED OVER
 GROSS PAYMENTS TO BE TO THE STOCKHOLDERS OR BY OUR NET 5-YEAR TERM OF
 PROCEEDS MADE BY US COMPANY THEIR AFFILIATES PROCEEDS(%) WARRANTS
 -------- -------------- ------------ ---------------- ----------------- ------------------

SELLING
STOCKHOLDERS $2,598,204(1) $(430,560)(2) $2,167,644 $(247,489.56) (31.28)% (6.26)%

EXCLUDED
PURCHASERS $4,535,393(3) $(719,440)(4) $3,815,953 $(540,493.18)(5) (33.02)% (6.6)%

PLACEMENT AGENT $0 $(368,000) $(368,000) N/A N/A N/A

TOTAL $7,133,597 $(1,518,000) $5,615,597 $(787,982.74) (41.06)% (8.21)%
-----

(1) Representing the proceeds payable to us by the Selling Stockholders in connection with the July Private Placement assuming the exercise in full of the Warrants held by the Selling Stockholders.

(2) Representing dividends payable to the Selling Stockholders on the Series C Preferred Stock purchased in the July Private Placement during the first year following sale, plus potential partial liquidated damages payable to the Selling Stockholders.

(3) Representing proceeds payable to us by the Excluded Purchasers in connection with the July Private Placement assuming the exercise in full of the Warrants acquired by the Excluded Purchasers.

(4) Representing dividends payable to the Excluded Purchasers on the Series C Preferred Stock purchased in the July Private Placement during the first year following sale, plus potential partial liquidated damages payable to the Excluded Purchasers based on the Series C Preferred Stock purchased in the July Private Placement.

(5) Representing the total discount to the market price realized by the Excluded Purchasers in the July Private Placement plus the total discount to the market price realized by the Excluded Purchasers in the April Private Placement; this calculation does not include warrants issued to any Excluded Purchasers or their affiliates for placement agent services in connection with the Series B Preferred Stock private placement transaction that closed on March 15, 2006 (the "SERIES B PRIVATE PLACEMENT"). Based on information provided to us by or on behalf of the Excluded Purchasers, none of the Excluded Purchasers or their affiliates purchased shares of our Series B Preferred Stock in the Series B Private Placement.

SECURITIES OUTSTANDING PRIOR TO OFFERINGS

In connection with the Series B Private Placement, Midsummer Investment, Ltd. purchased from us 2,826 shares of Series B Preferred Stock, convertible into 1,256,000 shares of common stock, at a conversion rate of 1 share of Series B Preferred Stock for 444.4444 shares of common stock. We issued a total of 10,000 shares of Series B Preferred Stock in connection with the Series B Private Placement. Immediately prior to the Series B Private Placement, no shares of Series B Preferred Stock were outstanding and 19,090,159 shares of common stock were outstanding. The closing market price per share of our common stock on the date of closing of the Series B Private Placement, as listed on Yahoo! Finance, was $2.15. The closing market price per share of the common stock as of December 17, 2007, as listed on Yahoo! Finance, was $1.75.

There were no other prior securities transactions between us (or any of our predecessors) and the Selling Stockholders (or any affiliates of the Selling Stockholders, or any person with whom any Selling Stockholder has a contractual relationship regarding the transaction (or any predecessors of those persons)).

SHARES REGISTERED ON BEHALF OF THE SELLING STOCKHOLDERS; SALES; PRIOR HOLDINGS

Set forth below in tabular form is an analysis of the following:

o the number of shares of common stock outstanding prior to the July Private Placement that are held by persons other than the Selling Stockholders, our affiliates, and affiliates of the Selling Stockholders;

o the number of shares of common stock registered for resale by the Selling Stockholders or affiliates of the Selling Stockholders in prior registration statements;

o the number of shares of common stock registered for resale by the Selling Stockholders or affiliates of the Selling Stockholders that continue to be held by the Selling Stockholders or affiliates of the Selling Stockholders;

o the number of shares of common stock that have been sold in registered resale transactions by the Selling Stockholders or affiliates of the Selling Stockholders; and

o the number of shares of common stock registered for resale on behalf of the Selling Stockholders or affiliates of the Selling Stockholders in the current

transaction.

For purposes of this table, the calculation of the number of outstanding shares of common stock does not include any securities underlying any outstanding convertible securities, options, or warrants.

 SHARES OF
 SHARES OF COMMON STOCK
 COMMON STOCK REGISTERED FOR
 REGISTERED FOR RESALE BY
 RESALE BY SELLING SHARES OF COMMON
 SELLING STOCKHOLDERS PREVIOUSLY STOCK OUTSTANDING
 STOCKHOLDERS THAT CONTINUE REGISTERED PRIOR TO THE JULY
 OR AFFILIATES TO BE HELD BY SHARES SOLD IN PRIVATE PLACEMENT(2)
 OF SELLING THE SELLING REGISTERED HELD BY PERSONS
 STOCKHOLDERS STOCKHOLDERS OR RESALE SHARES OF COMMON OTHER THAN THE
 IN PRIOR AFFILIATES OF TRANSACTIONS STOCK REGISTERED SELLING STOCKHOLDERS
SELLING REGISTRATION SELLING BY SELLING FOR RESALE IN (OR THEIR AFFILIATES)
STOCKHOLDER(1) STATEMENTS STOCKHOLDERS STOCKHOLDERS CURRENT TRANSACTION OR OUR AFFILIATES
-------------- -------------- ---------------- -------------- ------------------- ---------------------

Consonance Capital
Master Account L.P. 0 0 0 724,717 --

Midsummer
Investment, Ltd. 2,690,484 2,690,484 0 831,098 --

TOTAL 2,690,484 2,690,484 0 1,555,815 17,903,959
-----

(1) For purposes of this table, the term "Selling Stockholder" includes affiliates of the Selling Stockholders.

(2) There were a total of 21,299,667 shares of our common stock outstanding on July 17, 2007, just prior to the closing of the July Private Placement.

FINANCIAL ABILITY TO MAKE PAYMENTS AND DIVIDENDS

We intend to make, and have reasonable basis to believe that we have the financial ability to make, all payments and dividends on the overlying securities.

SHORT SALES BY SELLING STOCKHOLDERS

The following statements are based on information provided to us by, or on behalf of, the Selling Stockholders.

Midsummer Investment, Ltd. in the ordinary course of its business may inter into short sales. However, no such short sales are entered into by Midsummer Investment, Ltd. while in possession of any material, nonpublic information. Midsummer Investment, Ltd. acknowledges the position of the Staff of the SEC set forth in Item A.65 of the SEC Telephone Interpretations Manual.

RELATIONSHIPS BETWEEN US AND THE SELLING STOCKHOLDERS

No Selling Stockholder has had, within the past three years, any position, office, or material relationship or arrangements with us or any of our predecessors or affiliates, except as provided in this prospectus, and all such arrangements between or among us, or any of our predecessors or affiliates, and any of the Selling Stockholders are included as exhibits to the registration statement of which this prospectus forms a part.

So long as Midsummer Investment Ltd. and Bushido Capital Master Fund, LP (collectively, the "PRINCIPAL SERIES B INVESTORS") continue to hold at least 25% of our then outstanding shares of the Series B Preferred Stock, in the event that we intend to take an action, pursuant to certain sections of the Series B Certificate of Designations, as amended, which would require the affirmative vote or written consent of the holders of at least 70% of the then outstanding shares of the Series B Preferred Stock or Series C Preferred Stock, then we shall not take such action unless both Principal Series B Investors vote in favor of, or consent to, such action.

DETERMINATION OF TO BE SHARES REGISTERED

We determined the number of shares of common stock that we seek to register for resale in the registration statement, of which this prospectus forms a part, by taking the sum of the following:

o the number of shares of common stock underlying the Series C Preferred Stock purchased by the Selling Stockholders in the July Private Placement;

o the number of shares of common stock underlying the Warrants issued in the July Private Placement; and

o the aggregate number of shares of common stock issuable in satisfaction of dividend obligations on the shares of Series C Preferred Stock purchased by the Selling Stockholders in the July Private Placement (the "DIVIDEND SHARES").

In deciding the number of Dividend Shares to register, we first determined that, pursuant to the Certificate of Designations, the VWAP portion of the dividend formula at such time amounted to 2.185. Accordingly, we calculated the number of Dividend Shares to register with respect to each Selling Stockholder by taking the sum of:

o for the initial partial year, commencing on July 17, 2007, and ending April 24, 2008, 0.77 times the product of the aggregated stated value of the shares of Series C Preferred Stock purchased and a fraction, of which the numerator is .08, the rate at which dividends accrue during that period, and the denominator is 2.185, rounding down to the nearest number;

o for the subsequent full year, the product of the aggregated stated value of the shares of Series C Preferred Stock purchased and a fraction, of which

the numerator is .08, the rate at which dividends accrue during that period, and the denominator is 2.185, rounding down to the nearest number; and

o for the subsequent three full years, three times the product of the aggregated stated value of the shares of Series C Preferred Stock purchased and a fraction, of which the numerator is .15, the rate at which dividends accrue during that period, and the denominator is 2.185, rounding down to the nearest number.