PROSPECTUS SUPPLEMENT Filed Pursuant to Rules 424(b)(3) and 424(c)
(to prospectus dated August 7, 2007) Registration No. 333-130900
[GRAPHIC OMITTED] ELECTRONIC SENSOR TECHNOLOGY
ELECTRONIC SENSOR TECHNOLOGY, INC.
27,538,695 SHARES OF COMMON STOCK
This document supplements the prospectus dated August 7, 2007 relating to
the registration of our common stock under our Registration Statement on Form
SB-2 (Registration No. 333-130900). This prospectus supplement is incorporated
by reference into the prospectus.
This prospectus supplement modifies and supersedes the first sentence under
the heading "Description of Securities" in the prospectus dated August 7, 2007
to replace "54,173,745" with "54,955,687".
The remainder of the information in this prospectus supplement replaces and
supersedes the information set forth under the headings "Selling Security
Holders" and "Security Ownership of Certain Beneficial Owners and Management" in
the prospectus dated August 7, 2007.
INVESTING IN OUR COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 2 FOR A DISCUSSION OF CERTAIN RISKS THAT YOU SHOULD CONSIDER BEFORE
INVESTING IN 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.
This prospectus is dated August 20, 2007
SELLING SECURITY HOLDERS
Each of the selling security holders obtained beneficial ownership of the
common stock being registered for resale pursuant to this registration statement
in one of the following transactions, as set forth below.
o On February 1, 2005, in a private offering, Electronic Sensor
Technology issued 3,985,000 shares of common stock of Electronic
Sensor Technology and three-year warrants to purchase 3,985,000
shares of our common stock at an exercise price of $1.00 per
share (units consisting of one share of common stock and one
warrant were sold for $1.00 per unit). The following selling
security holders obtained beneficial ownership of our common
stock through this private offering: Mark S. Barbara, Bixbie
Financial Corp., John J. and Alicia C. Caufield, Chase
Investments, Inc., Crown Capital Partners SA, Richard Forte,
Jeffrey R. Haines, Highgate House Funds, Ltd., Nathaniel Kramer,
Memphis Group, Inc., Jeremy Shaffer Roenick, Gene Salkind, M.D.,
Brian Patrick Shanahan and Paul Tompkins.
o Electronic Sensor Technology issued 130,000 shares of common
stock to CEOcast, Inc. on December 5, 2005, in a private
offering, in exchange for investor relations services valued at
approximately $105,882. CEOcast provides us with investor
relations services valued at approximately $17,500 per month. We
have entered into three short-term consulting agreements with
CEOcast on each of January 17, 2005, July 17, 2005 and October
17, 2005, pursuant to which we agreed to compensate CEOcast with
$7,500 per month, paid in cash, and CEOcast is compensated for
the remainder of the value of its services with our common stock.
The 130,000 shares of common stock issued to CEOcast represented
the compensation in our shares due to CEOcast under the three
consulting agreements. The number of shares issued to CEOcast was
calculated by determining for each of the nine months of the
contract between us and CEOcast that number of shares that could
be purchased per month at a 15% discount with $10,000.
o On December 5, 2005, in a private offering, Electronic Sensor
Technology issued to HomelandSecurityStocks, a division of
Protect-A-Life, Inc., a warrant to purchase 350,000 shares of
common stock at an exercise price of $2.40 per share.
HomelandSecurityStocks formerly provided us with investor
relations services. The warrant was issued pursuant to a
Settlement Agreement entered into on October 11, 2005 among
HomelandSecurityStocks, Protect-A-Life and Electronic Sensor
Technology. The Settlement Agreement settled a dispute between
HomelandSecurityStocks and Electronic Sensor Technology resulting
from the termination by Electronic Sensor Technology of a
consulting agreement dated February 7, 2005, between
HomelandSecurityStocks and Electronic Sensor Technology. Pursuant
to the consulting agreement, we had engaged
HomelandSecurityStocks to provide us with investor relations and
public relations services from February 9, 2005 through February
9, 2006 for a fee of $12,000 per month and warrants to purchase
500,000 shares of common stock at an exercise price of $2.40 per
share, to vest as follows: (i) warrants to purchase 200,000
shares on February 9, 2005, (ii) warrants to purchase 75,000
shares on May 9, 2005, (iii) warrants to purchase 75,000 shares
on August 9, 2005, (iv) warrants to purchase 75,000 shares on
November 9, 2005 and (v) warrants to purchase 75,000 shares on
February 8, 2006. Electronic Sensor Technology terminated the
consulting agreement in July 2005.
o In a private offering on December 7, 2005, we issued to Islandia,
L.P. and Midsummer Investment Ltd. an aggregate principal amount
of $7,000,000 of 8% unsecured convertible debentures due December
7, 2009 that were convertible into 15,404,930 shares of our
common stock. At issuance, the debentures were convertible into
common stock at a conversion price of $0.4544 per share. This
price was calculated based upon 105% of the volume weighted
average price over the 20 trading days preceding the date of
issuance of the debentures. Such conversion price was
subsequently reduced to $0.4000, pursuant to the Forbearance and
Amendment Agreement entered into among Electronic Sensor
Technology, Midsummer and Islandia on September 7, 2006, which
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consequently increased the shares of common stock issuable upon
conversion of the debentures to 17,500,000. Under certain
circumstances, we have the right, at our option to pay interest
on the debentures with shares of common stock. In connection with
the private offering, we agreed to register 130% of the common
stock into which the debentures are convertible plus 130% of the
common stock that we may use to pay interest on the debentures.
On this registration statement, we are registering 110% of such
shares, or 23,148,482 shares, to facilitate secondary trading by
the holders of the debentures.
o In a private offering on December 7, 2005, we issued to
Montgomery 2006-1 Partnership, a subsidiary of Montgomery & Co.,
LLC, a five-year warrant to purchase 485,213 shares of common
stock at an exercise price of $0.4761 per share. This price was
calculated based upon 110% of the volume weighted average price
over the 20 trading days preceding the date of issuance of the
warrant. Montgomery & Co., LLC provided us with financial
advisory services in connection with the issuance of the 8%
unsecured convertible debentures issued on December 7, 2005 and
various other securities, for which it received $490,000 in
addition to the warrant.
The table below sets forth the following information, as of the date that
we received such information from the selling security holder (this information
was received by Electronic Sensor Technology between December 6, 2005 and the
date of this prospectus):
o the name of each beneficial owner of the common stock registered
pursuant to this registration statement;
o the number of shares of common stock that each selling security
holder beneficially owns as of such date;
o the number of shares of common stock that may, assuming the
exercise in full of all of the warrants described above and the
conversion in full of all of the debentures described above, be
offered for sale by each selling security holder from time to
time pursuant to this prospectus;
o the number of shares of common stock to be beneficially owned by
each selling security holder assuming the exercise in full of all
of the warrants described above and the conversion in full of all
of the debentures described above, and the sale of all of the
shares of common stock offered hereby;
o the percentage of common stock to be beneficially owned by each
selling security holder after completion of the offering, based
upon the number of shares of common stock to be beneficially
owned by such selling security holder (taking into account the
assumptions set forth above), divided by 54,955,687, which
represents the total number of shares of common stock issued and
outstanding as of the date of this prospectus, plus, for such
selling security holder, the number of shares of common stock to
be beneficially owned by such selling security holder; and
o by footnote, any position or office held or other material
relationship with Electronic Sensor Technology or any of its
predecessors or affiliates within the past three years, other
than that of being a shareholder, and details regarding the
transaction in which each selling security holder acquired
beneficial ownership of its common stock.
Of the selling security holders, we understand that Montgomery & Co. LLC,
the parent of Montgomery 2006-1 Partnership, is registered as a broker-dealer
with the NASD, California, Connecticut, Florida, Massachusetts, Nevada, New York
and Washington. Otherwise, to our knowledge, none of the selling security
holders is a broker-dealer or an affiliate of a broker-dealer.
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NUMBER OF SHARES
SHARES OF OF COMMON STOCK SHARES OF COMMON STOCK
COMMON STOCK TO BE OFFERED FOR BENEFICIALLY OWNED AFTER
BENEFICIALLY THE SELLING COMPLETION OF THE OFFERING
OWNED PRIOR SECURITY HOLDER'S -----------------------------
NAME OF SELLING SECURITY HOLDER TO THE OFFERING ACCOUNT NUMBER PERCENTAGE
----------------------------------------- --------------- ------------------ ------------ --------------
Mark S. Barbara (1) 50,000 50,000 0 *
Bixbie Financial Corp. (2) 250,000 250,000 0 *
John J. and Alicia C. Caufield (3) 130,000 100,000 30,000 *
CEOcast, Inc. (4) 130,000 130,000 0 *
Chase Investments, Inc. (5) 50,000 50,000 0 *
Crown Capital Partners SA (6) 1,000,000 1,000,000 0 *
Richard Forte (7) 50,000 50,000 0 *
Jeffrey R. Haines 50,000 50,000 0 *
Highgate House Funds, Ltd. (8) 1,000,000 1,000,000 0 *
HomelandSecurityStocks.com, a division of
Protect-A-Life, Inc. (9) 350,000 350,000 0 *
Islandia, L.P. (10) 10,861,520 8,267,315 2,594,205 3.96
Nathaniel Kramer (11) 50,000 50,000 0 *
Memphis Group Inc. (12) 500,000 500,000 0 *
Midsummer Investment Ltd. (13) 19,550,736 14,881,167 4,669,569 6.31
Montgomery 2006-1 Partnership (14) 485,213 485,213 0 *
Jeremy Shaffer Roenick (15) 50,000 50,000 0 *
Gene Salkind, M.D. (16) 200,000 200,000 0 *
Brian Patrick Shanahan 212,500 50,000 162,500 *
Paul Tompkins 25,000 25,000 0 *
* Less than 1%.
(1) Mr. Barbara's shares include 25,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
(2) Alan Meiteen is a beneficial owner of Bixbie Financial Corp.'s shares by
virtue of his position as sole control person of Bixbie Financial Corp.
(3) The Caufields' shares include 50,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
(4) Rachel Glicksman and Kenneth D. Sgro are beneficial owners of CEOcast's
shares by virtue of their positions as principal shareholders of CEOcast,
Inc.
(5) Richard Chase is a beneficial owner of Chase Investment, Inc.'s shares by
virtue of his position as sole control person of Chase Investments, Inc.
(6) Crown Capital Partners SA's shares include 500,000 shares of common stock
underlying a warrant exercisable within 60 days of the date of this
prospectus. John Graham Douglas is a beneficial owner of Crown Capital
Partners' shares by virtue of his position as sole control person of Crown
Capital Partners SA.
(7) Mr. Forte's shares include 25,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
(8) Highgate House Funds, Ltd.'s shares include 500,000 shares of common stock
underlying a warrant exercisable within 60 days of the date of this
prospectus. Mark Angelo is a beneficial owner of Highgate House Funds'
shares by virtue of his position as Portfolio Manager of Highgate House
Funds, Ltd.
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(9) HomelandSecurityStocks.com's shares include 350,000 shares of common stock
underlying a warrant exercisable within 60 days of the date of this
prospectus. Leon Hamerling and J. Robert Paul are both beneficial owners of
HomelandSecurityStocks' shares by virtue of their collective ownership of
100% of the outstanding shares of Protect-A-Life.
(10) Islandia, L.P.'s shares include 110% of 6,250,000 shares of common stock
underlying a debenture convertible within 60 days of the date of this
prospectus and shares of common stock that may be used to pay interest on
such debenture. The general partner of Islandia is John Lang, Inc., a New
York Sub-S corporation formed to manage investments. John Lang, Inc. has
sole dispositive power and sole voting power over all matters not related
to director elections. The individuals that exercise shared dispositive and
voting power for John Lang, Inc. are Richard Berner, President of John
Lang, Inc. and Edgar Berner and Thomas Berner, both Vice-Presidents of John
Lang, Inc. By virtue of these relationships John Lang, Inc., Richard
Berner, Edgar Berner and Thomas Berner may be deemed to have indirect
beneficial ownership of the shares of common stock beneficially owned by
Islandia; however, John Lang, Inc. Richard Berner, Edgar Berner and Thomas
Berner disclaim beneficial ownership of the shares of common stock
beneficially owned by Islandia.
(11) Mr. Kramer's shares include 25,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
(12) Memphis Group, Inc.'s shares include 250,000 shares of common stock
underlying a warrant exercisable within 60 days of the date of this
prospectus. Jeffrey Shear is a beneficial owner of Memphis Group's shares
by virtue of his position as sole control person of Memphis Group, Inc.
(13) Midsummer Investment Ltd.'s shares include 110% of 11,250,000 shares of
common stock underlying a debenture convertible within 60 days of the date
of this prospectus and shares of common stock that may be used to pay
interest on such debenture. Midsummer Capital, LLC, a New York limited
liability company, serves as investment advisor to Midsummer Investment
Ltd., a Bermuda company. By reason of such relationships, Midsummer Capital
may be deemed to share dispositive power over the shares of common stock
beneficially owned by Midsummer Investment. Midsummer Capital disclaims
beneficial ownership of such shares of common stock. Michel A. Amsalem and
Scott D. Kaufman are members of Midsummer Capital. By reason of such
relationships, Mr. Amsalem and Mr. Kaufman may be deemed to share
dispositive power over the shares of common stock stated as beneficially
owned by Midsummer Investment. Mr. Amsalem and Mr. Kaufman disclaim
beneficial ownership of such shares of common stock.
(14) Montgomery 2006-1 Partnership's shares include 485,213 shares of common
stock underlying a warrant exercisable within 60 days of the date of this
prospectus. Montgomery & Co., LLC and Montgomery and Associates are
beneficial owners of Montgomery 2006-1 Partnership's shares by virtue of
Montgomery & Co., LLC's position as a controlling entity of Montgomery
2006-1 Partnership and Montgomery & Associates's position as a controlling
entity of Montgomery & Co., LLC. George Montgomery, Michael Montgomery and
Brian Bean are beneficial owners of Montgomery 2006-1 Partnership's shares
by virtue of their positions as control persons of Montgomery & Co. Jamie
Montgomery is a beneficial owner of Montgomery 2006-1 Partnership's shares
by virtue of his positions as both a control person of Montgomery & Co. and
sole control person of Montgomery & Associates.
(15) Mr. Roenick's shares include 25,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
(16) Dr. Salkind's shares include 100,000 shares of common stock underlying a
warrant exercisable within 60 days of the date of this prospectus.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of the date of this
prospectus, concerning our issued and outstanding stock beneficially owned (i)
by each director and each named executive officer of Electronic Sensor
Technology, (ii) by all directors and executive officers of Electronic Sensor
Technology as a group and (iii) by each shareholder known by Electronic Sensor
Technology to be the beneficial owner of more than 5% of the outstanding common
stock. The information regarding beneficial owners of 5% or more of our common
stock was gathered by us from the filings made by such owners with the SEC or
from other sources. Shares that may be acquired within 60 days are treated as
outstanding for purposes of determining the amount and percentage beneficially
owned.
AMOUNT AND NATURE OF
NAME AND ADDRESS(1) BENEFICIAL OWNERSHIP PERCENTAGE OF
TITLE OF CLASS OF BENEFICIAL OWNER (SHARES OF STOCK) CLASS(2)
-------------- --------------------------------- -------------------- -------------
Common stock Barry Howe+* 100,000(3) 0.18%
Common stock Philip Yee+ 30,000(4) 0.05%
Common stock Gary Watson+ 262,500(5) 0.48%
Common stock James Frey* 375,000(6) 0.68%
Common stock Teong Lim*++ 5,287,908(7) 9.53%
Common stock Francis Chang*++ 3,998,160(8) 7.22%
Common stock Mike Krishnan* 100,000(9) 0.18%
Common stock James Wilburn* 100,000(10) 0.18%
Common stock Michel Amsalem* 0(11) 0.00%
Common stock Lewis Larson* 50,000(12) 0.09%
Common stock Land & General Berhad++ 9,948,801(13) 18.00%
Common stock L&G Resources (1994), Inc.++ 9,948,801(13) 18.00%
Common stock 3 Springs, LLC++ 3,853,160 7.01%
Common stock TC Lim, LLC++ 5,167,908 9.40%
Common stock Edward Staples++ 3,407,525(14) 6.16%
Common stock Midsummer Investment Ltd.++ 19,550,736(15) 26.42%
Common stock Islandia L.P.++ 10,861,520(16) 16.57%
Common sotck All directors and named executive
officers as a group 10,303,568(17) 18.10%
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* Director
+ Named executive officer
++ 5% or more beneficial owner
(1) The address of each director, named executive officer, 3 Springs, LLC and TC
Lim, LLC is c/o Electronic Sensor Technology, Inc., 1077 Business Center Circle,
Newbury Park, California 91320. The address of Midsummer Investment Ltd. and
Islandia L.P. is 295 Madison Avenue, 38th Floor, New York, New York 10017. The
address of each of L&G Resources (1994), Inc. and Land & General Berhad is 7
Persiaran Dagang, Bandar Sri Damansara, Kuala Lumpur, Malaysia 52200. The
address of Edward Staples is 739 Parmenter Court, Thousand Oaks, California
91362.
(2) These percentages are calculated based upon the total amount of outstanding
shares of common stock beneficially owned by each person or group, including
shares of common stock that person or group has the right to acquire within 60
days pursuant to options, warrants, conversion privileges or other rights,
divided by 54,955,687, which represents the total number of shares of common
stock issued and outstanding as of the date of this prospectus, plus, for each
person or group, any shares of common stock that person or group has the right
to acquire within 60 days pursuant to options, warrants, conversion privileges
or other rights.
(3) Includes 100,000 shares of common stock underlying an option exercisable
within 60 days of the date of this prospectus.
(4) Includes 30,000 shares of common stock underlying an option exercisable
within 60 days of the date of this prospectus.
(5) Includes 262,500 shares of common stock underlying options exercisable
within 60 days of the date of this prospectus.
(6) Includes 375,000 shares of common stock underlying options exercisable
within 60 days of the date of this prospectus.
(7) Includes 120,000 shares of common stock underlying options exercisable
within 60 days of the date of this prospectus, and 438,796 shares of common
stock underlying warrants exercisable within 60 days of the date of this
prospectus and 4,729,112 shares of common stock held by TC Lim, LLC and
beneficially owned by Dr. Lim by virtue of his position as sole member of TC
Lim, LLC.
(8) Includes 145,000 shares of common stock underlying options exercisable
within 60 days of the date of this prospectus, and 257,247 shares of common
stock underlying warrants exercisable within 60 days of the date of this
prospectus and 3,595,913 shares of common stock held by 3 Springs, LLC and
beneficially owned by Mr. Chang by virtue of his position as sole member of 3
Springs, LLC.
(9) Includes 100,000 shares of common stock underlying an option exercisable
within 60 days of the date of this prospectus. Mr. Krishnan is the Managing
Director of Land & General Berhad and President of L&G Resources (1994), Inc., a
wholly owned subsidiary of Land & General Berhad. By virtue of his position, Mr.
Krishnan may be deemed to share dispositive power over the common stock
beneficially owned by Land & General Berhad and L&G Resources (1994), Inc. Mr.
Krishnan is one of six directors on the Board of Directors of Land & General
Berhad and the Board of Directors of Land & General Berhad makes the ultimate
voting and investment decisions with respect to the common stock. Mr. Krishnan
disclaims beneficial ownership of such shares of common stock.
(10) Includes 100,000 shares of common stock underlying an option exercisable
within 60 days of the date of this prospectus.
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(11) Mr. Amsalem is a member of Midsummer Capital, LLC, a New York limited
liability company, which serves as investment advisor to Midsummer Investment
Ltd., a Bermuda company. By virtue of his position, Mr. Amsalem may be deemed to
share dispositive power over the common stock beneficially owned by Midsummer
Investment Ltd. Midsummer Capital disclaims beneficial ownership of such shares
of common stock and Mr. Amsalem disclaims beneficial ownership of such shares of
common stock.
(12) Includes 50,000 shares of common stock underlying an option exercisable
within 60 days of the date of this prospectus.
(13) Includes 9,632,534 shares of common stock and 316,267 shares of common
stock underlying a warrant exercisable within 60 days of the date of this
prospectus held by L&G Resources (1994), Inc., a wholly-owned subsidiary of Land
& General Berhad, of which Land & General Berhad is a beneficial owner. Mike
Krishnan is President of L&G Resources (1994), Inc. and Managing Director of
Land & General Berhad. By reason of such relationships, Mr. Krishnan may be
deemed to share dispositive power over the shares of common stock beneficially
owned by L&G Resources (1994), Inc. Mr. Krishnan expressly disclaims beneficial
ownership as Mr. Krishnan is one of six directors on the Board of Directors of
Land & General Berhad and the Board of Directors of Land & General Berhad makes
the ultimate voting and investment decisions with respect to the common stock.
(14) Includes 343,689 shares of common stock underlying warrants exercisable
within 60 days of the date of this prospectus. Dr. Staples no longer appears on
our list of record holders of outstanding common stock; however, based upon an
independent report, as of August 10, 2007, Dr. Staples owned 3,063,836 shares of
common stock through a broker in street name. Dr. Staples has not yet filed an
amendment to the Schedule 13D filed with the SEC on January 8, 2007 which
indicated that he is the beneficial owner of 3,768,836 shares of common stock.
(15) Includes 11,250,000 shares of common stock underlying a debenture
convertible within 60 days of the date of this prospectus, 7,798,059 shares of
common stock underlying a warrant exercisable within 60 days of the date of this
prospectus and 502,677 shares of common stock issued as interest on the
debenture. The conversion of the debenture and exercise of the warrant is
contractually capped such that such conversion or exercise, as applicable, shall
not cause Midsummer's beneficial ownership to exceed 4.99%, unless waived by
Midsummer, and in no event to exceed 9.99% (without giving effect to shares of
common stock underlying any unconverted portion of the debenture or unexercised
portion of the warrant). Midsummer Capital, LLC, a New York limited liability
company, serves as investment advisor to Midsummer Investment Ltd., a Bermuda
company. By reason of such relationships, Midsummer Capital may be deemed to
share dispositive power over the shares of common stock beneficially owned by
Midsummer Investment. Midsummer Capital disclaims beneficial ownership of such
shares of common stock. Michel A. Amsalem and Scott D. Kaufman are members of
Midsummer Capital. By reason of such relationships, Mr. Amsalem and Mr. Kaufman
may be deemed to share dispositive power over the shares of common stock stated
as beneficially owned by Midsummer Investment. Mr. Amsalem and Mr. Kaufman
disclaim beneficial ownership of such shares of common stock.
(16) Includes 6,250,000 shares of common stock underlying a debenture
convertible within 60 days of the date of this prospectus, 4,332,255 shares of
common stock underlying a warrant exercisable within 60 days of the date of this
prospectus and 279,265 shares of common stock issued as interest on the
debenture. The conversion of the debenture and exercise of the warrant is
contractually capped such that such conversion or exercise, as applicable, shall
not cause Islandia's beneficial ownership to exceed 4.99%, unless waived by
Islandia, and in no event to exceed 9.99% (without giving effect to shares of
common stock underlying any unconverted portion of the debenture or unexercised
portion of the warrant). The general partner of Islandia is John Lang, Inc., a
New York Sub-S corporation formed to manage investments. John Lang, Inc. has
sole dispositive power and sole voting power over all matters not related to
director elections. The individuals that exercise shared dispositive and voting
power for John Lang, Inc. are Richard Berner, President of John Lang, Inc. and
Edgar Berner and Thomas Berner, both Vice-Presidents of John Lang, Inc. By
virtue of these relationships John Lang, Inc., Richard Berner, Edgar Berner and
Thomas Berner may be deemed to have indirect beneficial ownership of the shares
of common stock beneficially owned by Islandia; however, John Lang, Inc. Richard
Berner, Edgar Berner and Thomas Berner disclaim beneficial ownership of the
shares of common stock beneficially owned by Islandia.
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(17) Includes 1,282,500 shares of common stock underlying options exercisable
within 60 days of the date of this prospectus and 696,043 shares of common stock
underlying warrants exercisable within 60 days of the date of this prospectus,
as well as 3,595,913 shares of common stock held by 3 Springs, LLC and 4,729,112
shares of common stock held by TC Lim, LLC.
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