Letter sent to RP

Series EE Stock Conversion, March 15, 2005

I have reviewed the SC 13G, Statement of acquisition of beneficial ownership by individuals, recently filed and need some clarification.

It shows that a total of 9,854,647 shares of common stock owned by four individuals.

Under Item 4, it also shows another breakdown of common stock and warrants which are exercisable for common stock. Under this section the combined amounts are equal to the above referenced amounts, but they include the warrants granted.

In either situation, I am confused as to how the total shares were arrived at, and were they in accordance with the Shareholder Alert dated November 19, 2004. Following is an excerpt from that document dealing with the conversion as outlined, where the minimum rate was stated as $.19.

``The stated dollar amount of Series EE Stock, is convertible into fully paid and nonassessable shares of Common Stock at a conversion price of $0.25 per share which is fixed for the first 90 days following the original issue date, and commencing 90 days following the original issue date, the conversion price shall equal the lower of (I) $0.25 and (ii) 85% of the average of the volume weighted average price per share during the ten consecutive trading days immediately preceding the conversion date. However, the conversion price shall not be below $0.19 except as may be subsequently modified as a consequence of any future issuance by the Company of common stock priced below $0.19 during the term of the Series EE Stock. The Series EE Stock shall be subject to automatic conversion on November 18, 2006 subject to certain conditions.``

If indeed they received 9,854,647 shares, then the average price was below the amount stated in the Alert, and the calculation used was not in accordance with the details outlined.

Please have someone clarify this discrepancy and provide me with the actual number of shares they received form the $1.75 million cash received by the company. Also, the exact calculation used in determining the number of shares.

Richard A. Osborne

Response from RP

Thank you for your e-mail, Richard. When registering a convertible preferred offering, the maximum number of common shares that can be converted from the preferred is registered. The maximum number of shares registered assumes the convertible preferred shares are held to term and include interest payable in common shares. If the preferred shares are converted into common shares before the expiration date of the preferred, fewer shares are issued. Please call me at your convenience if you would like to discuss this further

OZ