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<SEC-DOCUMENT>0000950134-06-022851.txt : 20061208
<SEC-HEADER>0000950134-06-022851.hdr.sgml : 20061208
<ACCEPTANCE-DATETIME>20061208172721
ACCESSION NUMBER:		0000950134-06-022851
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20061204
ITEM INFORMATION:		Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20061208
DATE AS OF CHANGE:		20061208

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PIZZA INN INC /MO/
		CENTRAL INDEX KEY:			0000718332
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-GROCERIES & RELATED PRODUCTS [5140]
		IRS NUMBER:				470654575
		STATE OF INCORPORATION:			MO
		FISCAL YEAR END:			0626

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12919
		FILM NUMBER:		061266625

	BUSINESS ADDRESS:	
		STREET 1:		3551 PLANO PARKWAY
		CITY:			THE COLONY
		STATE:			TX
		ZIP:			75056
		BUSINESS PHONE:		469-384-5000

	MAIL ADDRESS:	
		STREET 1:		3551 PLANO PARKWAY
		CITY:			THE COLONY
		STATE:			TX
		ZIP:			75056

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PANTERAS CORP
		DATE OF NAME CHANGE:	19901126

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CONCEPT DEVELOPMENT INC
		DATE OF NAME CHANGE:	19870212
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d41956e8vk.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML>
<HEAD>
<TITLE>e8vk</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM 8-K</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>CURRENT REPORT<BR>
Pursuant to Section&nbsp;13 or 15(d) of the<BR>
Securities Exchange Act of 1934</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Date of Report (Date of earliest event reported): December&nbsp;4, 2006</B></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Pizza Inn, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Missouri</B><BR>
(State or other jurisdiction of incorporation)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>0-12919</B><BR>
(Commission File Number)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>47-0654575</B><BR>
(IRS Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>3551 Plano Parkway, The Colony, Texas</B><BR>
(Address of principal executive offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75056</B><BR>
(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Registrant&#146;s telephone number, including area code <B>(469)&nbsp;384-5000</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Not Applicable</B><BR>
(Former name or former address, if changed since last report)</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Written communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Soliciting material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left"><FONT face="Wingdings">&#111;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pre-commencement communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))</TD>
</TR>

</TABLE>
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link2 "Item&nbsp;3.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing" -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard;
Transfer of Listing</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;9, 2006, Pizza Inn, Inc. (the &#147;Company&#148;) received a staff delinquency notice from
the Nasdaq Stock Exchange, LLP (&#147;Nasdaq&#148;) stating that, based upon information disclosed in the
Company&#146;s Form 10-Q for the period ended September&nbsp;24, 2006, the Company fails to comply with the
minimum shareholders&#146; equity, minimum market value of listed securities, and minimum net income
requirements for continued listing on The Nasdaq Capital Market, as set forth in Marketplace Rule
4310(c)(2)(B). The notice further stated that if the Company did not provide Nasdaq, on or before
November&nbsp;24, 2006, with a specific plan to achieve and maintain compliance with at least one of the
three listing requirements, or if Nasdaq determines that a plan submitted by the Company does not
adequately address the deficiencies noted, the Company&#146;s securities would thereafter be delisted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;24, 2006, the Company submitted to Nasdaq a proposed plan to regain compliance
with the minimum shareholders&#146; equity listing requirement through the realization of a gain on the
sale of the Company&#146;s corporate office and distribution facilities, which is expected to be
completed on or about December&nbsp;29, 2006. The plan further proposed that the Company anticipates
remaining in compliance with the minimum shareholders&#146; equity listing requirement in the future by
generating net income that will be accretive to shareholders&#146; equity. Such net income projections
are based upon, among other things, the realization of certain anticipated cost savings and an
anticipated decrease in legal fees as a result of the settlement of certain litigated and
arbitrated matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On December&nbsp;4, 2006, Nasdaq notified the Company that it believes that the Company has
presented a definitive plan evidencing its ability to achieve and sustain compliance with the
minimum shareholders&#146; equity listing requirement and therefore determined to grant the Company an
extension of time through January&nbsp;12, 2007, provided that on or before that date the Company must:
(i)&nbsp;complete the sale of its corporate office and distribution facilities and (ii)&nbsp;furnish to
Nasdaq a publicly available report that includes (a)&nbsp;disclosure of the November&nbsp;9, 2006 Nasdaq
deficiency letter, (b)&nbsp;a description of the completed transaction that enabled the Company to
satisfy the shareholders&#146; equity requirement, (c)&nbsp;an affirmative statement that as of the date of
the report the Company believes it has regained compliance with the shareholders&#146; equity
requirement based upon the completed transaction described, or a balance sheet no more than 60&nbsp;days
old with pro forma adjustments as necessary to evidence compliance with the shareholders&#146; equity
requirements, and (d)&nbsp;a disclosure that Nasdaq will continue to monitor the Company&#146;s ongoing
compliance with the shareholders&#146; equity requirement and, if at the time of the Company&#146;s next
periodic report the Company does not evidence compliance, that it may be subject to delisting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company anticipates the ability to satisfy the Nasdaq listing requirements and the
conditions set forth in the December&nbsp;4, 2006 Nasdaq notification by the January&nbsp;12, 2007 deadline.
However, there can be no assurance that the Company will be able to cure its noncompliance by
achieving or sustaining the shareholders&#146; equity requirements. If it is not able to do so, the
Company may not be able to maintain its Nasdaq listing.
</DIV>
<!-- link2 "Item&nbsp;9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits." -->

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" align="center"><DIV style="margin-left:0px; text-indent:-0px">99.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">NASDAQ Notice Letter, dated December&nbsp;4, 2006 (furnished herewith)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">SIGNATURES
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Pizza Inn, Inc.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">Date:  December 8, 2006&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Timothy P. Taft
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Timothy P. Taft,&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>d41956exv99w1.htm
<DESCRIPTION>NOTICE LETTER
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><IMG src="d41956nasdaq.gif" alt="(NASDAQ LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I><U>By Electronic Delivery to Clinton@newcastle-group.com</U></I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">December&nbsp;4, 2006
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Clinton J. Coleman<BR>
Interim Chief Financial Officer<BR>
Pizza Inn, Inc.<BR>
3551 Plano Parkway<BR>
The Colony, TX 75056

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left">Re:</TD>
    <TD>&nbsp;</TD>
    <TD>Pizza Inn, Inc. (the &#147;Company&#148;) Nasdaq<BR>
Symbol: PZZI</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Mr.&nbsp;Coleman:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On November&nbsp;9, 2006, Staff notified the Company that it did not comply with Nasdaq&#146;s minimum
$2,500,000 stockholders&#146; equity or $35,000,000 market value of listed securities or $500,000 net
income from continuing operations for the most recently completed fiscal year or two of the three
most recently completed fiscal years requirement set forth in Marketplace Rule&nbsp;4310(c)(2)(B) (the
&#147;Rule&#148;). Based on our further review and the materials submitted on November&nbsp;24, 2006,
Staff has determined to grant the Company an extension to regain compliance with the Rule, as
described below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">On October&nbsp;20, 2006, the Company entered into a definitive agreement to sell its office
building and distribution facility, which it anticipates closing by
December&nbsp;29, 2006.<sup>1</sup> As a
result, the Company expects to record a gain of $546,000, after which the Company will evidence
compliance with the Rule. Going forward, the Company projects that net income will be accretive to
stockholders&#146; equity. Such projections are based on realized cost savings from outsourcing its
distribution services, and the expectation that it will incur substantially less legal fees and
expenses, due to the settlement of certain litigation. The Company also stated that it does not
expect any to record any significant asset impairments in the future. Moreover, the Company may
realize significant deferred tax assets as it returns to profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Staff believes that the Company provided a definitive plan evidencing its ability to achieve
and sustain compliance with the Rule, and as such, has determined to grant an extension of time.
The terms of the extension are as follows: on or before January&nbsp;12, 2007, the Company must complete
the above referenced sale of its office building and distribution facility and opt for one of the
two following alternatives to evidence compliance with the Rule prior to its next periodic filing:
</DIV>


<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>The Company will lease back the office building and has outsourced certain distribution
operations.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">






<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Clinton J. Coleman<BR>
December&nbsp;4, 2006<BR>
Page 2

</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><U>Alternative 1</U>: The Company must furnish to the SEC and Nasdaq a publicly
available report (e.g., a Form 8-K or Form 6-K) including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A disclosure of Staff&#146;s deficiency letter and the specific
deficiency(ies) cited;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A description of the completed transaction or event that enabled the
Company to satisfy the stockholders&#146; equity requirement for continued listing;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>An affirmative statement that, as of the date of the report,
the Company believes it has regained compliance with the stockholders&#146; equity
requirement based upon the specific transaction or event referenced in Step
2; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A disclosure stating that Nasdaq will continue to monitor the
Company&#146;s ongoing compliance with the stockholders&#146; equity requirement and, if
at the time of its next periodic report the Company does not evidence
compliance, that it may be subject to delisting.</TD>
</TR>

</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%"><U>Alternative 2</U>: The Company must furnish to the SEC and Nasdaq a publicly
available report including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Steps 1 &#038; 2 set forth above;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><I>2.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A balance sheet no older than 60&nbsp;days with pro forma adjustments for
any significant transactions or event occurring on or before the report date.
The pro forma balance sheet must evidence compliance with the stockholders&#146;
equity requirement; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A disclosure that the Company believes it also
satisfies the stockholders&#146; equity requirement as of the report date and that
Nasdaq will continue to monitor the Company&#146;s ongoing compliance with the
stockholders&#146; equity requirement and, if at the time of its next periodic
report the Company does not evidence compliance, that it may be subject to
delisting.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Regardless of which alternative the Company chooses, if the Company fails to evidence
compliance upon filing its periodic report for the December&nbsp;24, 2006 with the SEC and Nasdaq the
Company may be subject to delisting. In the event the Company does not satisfy the terms, Staff
will provide written notification that its securities will be delisted. At that time, the Company
may appeal Staff&#146;s determination to a Listing Qualifications Panel.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">If you have any questions, please contact Wayne Bush, Lead Analyst, at (301)&nbsp;978-8034.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Sincerely,
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="d41956d4195602.gif" alt="(-s- Stanley Higgins)"><BR>
Stanley Higgins<BR>
Associate Director<BR>
Nasdaq Listing Qualifications

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
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