<SUBMISSION>
<ACCESSION-NUMBER>0000950123-10-110803
<TYPE>SC 13E3/A
<PUBLIC-DOCUMENT-COUNT>1
<FILING-DATE>20101203
<DATE-OF-FILING-DATE-CHANGE>20101203
<SUBJECT-COMPANY>
<COMPANY-DATA>
<CONFORMED-NAME>BELL INDUSTRIES INC /NEW/
<CIK>0000945489
<ASSIGNED-SIC>5065
<IRS-NUMBER>952039211
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13E3/A
<ACT>34
<FILE-NUMBER>005-52973
<FILM-NUMBER>101231397
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>8888 KEYSTONE CROSSING SUITE 1700
<CITY>INDIANAPOLIS
<STATE>IN
<ZIP>46240
<PHONE>317-704-6000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>8888 KEYSTONE CROSSING SUITE 1700
<CITY>INDIANAPOLIS
<STATE>IN
<ZIP>46240
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CALIFORNIA BELL INDUSTRIES INC
<DATE-CHANGED>19950519
</FORMER-COMPANY>
</SUBJECT-COMPANY>
<FILED-BY>
<COMPANY-DATA>
<CONFORMED-NAME>BELL INDUSTRIES INC /NEW/
<CIK>0000945489
<ASSIGNED-SIC>5065
<IRS-NUMBER>952039211
<STATE-OF-INCORPORATION>CA
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>SC 13E3/A
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>8888 KEYSTONE CROSSING SUITE 1700
<CITY>INDIANAPOLIS
<STATE>IN
<ZIP>46240
<PHONE>317-704-6000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>8888 KEYSTONE CROSSING SUITE 1700
<CITY>INDIANAPOLIS
<STATE>IN
<ZIP>46240
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CALIFORNIA BELL INDUSTRIES INC
<DATE-CHANGED>19950519
</FORMER-COMPANY>
</FILED-BY>
<DOCUMENT>
<TYPE>SC 13E3/A
<SEQUENCE>1
<FILENAME>c09290sc13e3za.htm
<DESCRIPTION>SCHEDULE 13E-3/A
<TEXT>
<HTML>
<HEAD>
<TITLE>Schedule 13E-3/A</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif; margin-left: .25in; width: 7.50in">

<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: 10pt"><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: 10pt"><B>Schedule&nbsp;13E-3/A</B>
</DIV>




<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center" style="font-size: 12pt; margin-top: 10pt"><B>Rule&nbsp;13e-3 Transaction Statement<BR>
Under Section&nbsp;13(e) of the Securities Exchange Act of 1934<BR>
(Amendment No. 2)</b>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="center" style="font-size: 24pt; margin-top: 10pt"><B>BELL INDUSTRIES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Name of the Issuer)</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>BELL INDUSTRIES, INC.</B><BR>
(Name of Person(s) Filing Statement)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Common Stock<BR>
(Title of Class of Securities)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">078 107 109<BR>
(CUSIP Number of Class of Securities)
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 10pt">Clinton J. Coleman<BR>
8888 Keystone Crossing<BR>
Suite&nbsp;1700<BR>
Indianapolis, Indiana 46240-7657<BR>
(317)&nbsp;704-6000<BR>
(Name, address and telephone number of person authorized to receive notices and communications<BR>
on behalf of the person(s) filing statement)
</DIV>


<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">This statement is filed in connection with (check the appropriate box):
</DIV>

<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%"><FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD>The filing of solicitation materials or an information statement
subject to Regulation&nbsp;14A, Regulation&nbsp;14C, or Rule&nbsp;13e-3(c) under the
Securities Exchange Act of 1934.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>The filing of a registration statement under the Securities Act of 1933.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>A tender offer.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>None of the above.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Check the following box if the soliciting materials or information statement referred to in
checking box (a)&nbsp;are preliminary copies: <FONT face="Wingdings">&#254;</FONT>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Check the following box if the filing is a final amendment reporting the results of the
transaction: <FONT face="Wingdings">&#111;</FONT>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CALCULATION OF FILING FEE</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="1%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="6" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 10pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center">Transaction Value</TD>
    <TD style="border-right: 1px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount of filing fee</TD>
    <TD width="1%">&nbsp;</TD>
</TR>


<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>

<TD align="center" style="border-top: 1px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">$50,000*</DIV></TD>
    <TD style="border-right: 1px solid #000000; border-top: 1px solid #000000">&nbsp;</TD>
    <TD style="border-top: 1px solid #000000">&nbsp;</TD>

<TD align="center" valign="bottom" style="border-top: 1px solid #000000">$3.56**</TD>
    <TD width="1%" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="6" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body --></TABLE>
</DIV>



<DIV style="margin-top: 10pt">
<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">*</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Estimated maximum price to be paid in lieu of fractional shares of common stock to persons
who would hold less than one whole share of common stock of record after the proposed reverse
stock split.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">**</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Determined pursuant to Rule&nbsp;0-11(b)(1) as $50,000 multiplied by 0.0000713.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>





<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><FONT face="Wingdings">&#254;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Check the box if any part of the fee is offset as provided by Rule&nbsp;0-11(a)(2) and identify
the filing with which the offsetting fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its filing.</TD>
</TR>


</TABLE>
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Amount
Previously Paid: $3.56
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Form or Registration No.: Schedule 13E-3
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Filing Party: Bell Industries, Inc.
</DIV>

<DIV align="justify" style="font-size: 10pt; margin-top: 10pt">Date Filed: October 1, 2010
</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;

<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; margin-left: .25in; width: 7.50in">

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


<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This Rule&nbsp;13e-3 Transaction Statement, together with the exhibits hereto (the &#147;Transaction
Statement&#148;), is being filed with the Securities and Exchange Commission (the &#147;SEC&#148;) by Bell Industries, Inc., a
California corporation (the &#147;Company&#148;).
This Transaction Statement amends and restates in its entirety the
Schedule 13E-3 filed with the SEC on November 4, 2010.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>



<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 10pt">On the date hereof, the Company filed with the Securities and Exchange Commission
a revised preliminary
proxy statement (the &#147;Proxy Statement&#148;) under Regulation&nbsp;14A of the Securities Exchange Act of
1934, as amended (the &#147;Exchange Act&#148;), relating to the annual meeting of the Company&#146;s shareholders
to be held on January&nbsp;28, 2011 (the &#147;Annual Meeting&#148;) to consider and act upon several proposals,
including a proposal to approve
the reincorporation of the Company from California to Delaware and a proposal to approve
an amendment to the Company&#146;s Certificate of Incorporation to
effect a one-for-20 reverse split of the Company&#146;s common stock, with cash being paid to
shareholders in lieu of fractional shares. If the reverse split is approved by the Company&#146;s
shareholders, then once the amendment to the Certificate of Incorporation is filed with the
Secretary of State of the State of Delaware, the Company expects that it will no longer have 300
shareholders of record and will terminate its registration under the Exchange Act.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Pursuant to General Instruction G to Schedule&nbsp;13E-3, the information in the Proxy Statement,
including all appendices thereto, is expressly incorporated by reference herein in its entirety,
and responses to each item herein are qualified in their entirety by the information contained in
the Proxy Statement. The cross references below are being supplied to show the location in the
Proxy Statement of the information required to be included in response to the items of Schedule
13E-3. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms
in the Proxy Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">As of the date hereof, the Proxy Statement is in preliminary form and is subject to completion or
amendment. This Schedule&nbsp;13E-3 will be further amended to reflect such completion or amendment of
the Proxy Statement.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 10pt">This Schedule&nbsp;13E-3 (and the documents that have been incorporated herein by reference)
include certain
forward-looking statements
regarding, among other things, the Company&#146;s plans,
strategies and prospects, both business and financial. Although the Company believes that its
plans, intentions and expectations reflected in or suggested by these forward-looking statements
are reasonable, it cannot assure you that it will achieve or realize these plans, intentions or
expectations. Forward-looking statements are inherently subject to risks, uncertainties, and
assumptions. Many of the forward-looking statements contained in this Schedule&nbsp;13E-3 (and the
documents that have been incorporated herein by reference) may be identified by the use of
forward-looking words such as &#147;believe,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;should,&#148; &#147;planned,&#148; &#147;will,&#148;
&#147;may,&#148; and &#147;estimated,&#148; among others. Factors that could cause actual results to differ materially
from those anticipated by such forward-looking statements include, but are not limited to, the
matters under Item&nbsp;1A. &#147;Risk Factors&#148; in the Company&#146;s Annual Report on Form 10-K for the year
ended December&nbsp;31, 2009 and in other reports or documents that it files from time to time with the
Securities and Exchange Commission. All forward-looking statements attributable to the Company or
a person acting on its behalf are expressly qualified in their entirety by this cautionary
statement. To the extent that there is any material change in the information discussed in this
Schedule&nbsp;13E-3 (and the documents that have been incorporated herein by reference), the Company
will promptly disclose the change if required by applicable rules and regulations of the Securities
and Exchange Commission.
The safe harbor provisions under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Exchange Act do not apply to any forward-looking statements the Company makes in connection with the reverse split.
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>TRANSACTION STATEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;1. Summary Term Sheet.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">The information set forth in the section of the Proxy Statement entitled &#147;Summary Term Sheet&#148; is
incorporated herein by reference.
</DIV>
<P align="center" style="font-size: 10pt">&nbsp;

<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; margin-left: .25in; width: 7.50in">

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;2. Subject Company Information.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Name and Address.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The name of the subject company is Bell Industries, Inc. Bell
Industries, Inc. is a California corporation with its principal place
of business located at 8888 Keystone Crossing, Suite&nbsp;1700,
Indianapolis, Indiana 46240. Bell Industries, Inc.&#146;s telephone number
is 317-704-6000. As set forth in the section of the Proxy Statement
entitled &#147;Proposal No.&nbsp;4 Reincorporation of the Company from
California to Delaware,&#148; the Company&#146;s shareholders are being asked to
consider a proposal to reincorporate the Company from California to
Delaware at the Annual Meeting. If that proposal is approved by the
shareholders, the name of the Company will continue to be Bell
Industries, Inc. and its principal place of business will not change,
but its state of incorporation will be Delaware.</TD>
</TR>



<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Securities.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>
<DIV align="left"><FONT size="1">

</FONT></DIV>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The subject class of equity securities is the Company&#146;s common stock.
There were 433,416 shares of common stock outstanding on
November&nbsp;12,
2010.
</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>
<DIV align="left"><FONT size="1">

</FONT>&nbsp;</div>
</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;
</TD>
</TR>




<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trading Market and Price.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Market and Market Price of Our Common Stock&#148; is incorporated
herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Dividends.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Market and Market Price of Our Common Stock&#148; is incorporated
herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prior Public Offerings.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has not made an underwritten public offering of its securities during the past three years.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Prior Stock Purchases.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has not purchased any of its securities during the past two years.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;3. Identity and Background of Filing Person.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Name and Address.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company is the filing person and the subject company. The Company&#146;s name, address and
telephone number are as provided in Item 2(a) above. See subsection (c)&nbsp;below in this Item
3 for information regarding the Company&#146;s directors and executive officers.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business and Background of Entities.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Business and Background of Natural Persons.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Proposal No.&nbsp;1 Election of Directors&#151;Information Regarding
Nominees for Director,&#148; &#147;Management,&#148; and &#147;Beneficial Ownership of
Securities and Security Ownership of Management&#148; is incorporated
herein by reference.</TD>
</TR>


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

<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; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt"><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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Neither the Company, nor, to its knowledge, any of its directors or
executive officers during the past five years have been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors) or have been a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree, or final order
enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws, or a finding of any violation of
federal or state securities laws.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;4. Terms of the Transaction.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Material Terms.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet,&#148;
&#147;Proposal No. 4 Reincorporation of the Company from California to Delaware,&#148; and
&#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split&#148; &#147;&#151;Special
Factors of the Reverse Split&#148; and &#147;&#151;Amendment to Certificate of
Incorporation to Effect Reverse Split&#148; is incorporated herein by
reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Different Terms.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Special Factors of the Reverse
Split&#151;Fairness of the Reverse Split to Unaffiliated Shareholders&#148; is
incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Appraisal Rights.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet,&#148;
&#147;Proposal No. 4 Reincorporation of the Company from California
to Delaware &#151; Reincorporation of the Company from California to
Delaware &#151; Significant Differences Between the Corporation Laws of California and Delaware &#151; Appraisal Rights,&#148;
and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Amendment to Certificate of Incorporation to Effect Reverse
Split&#151;No Appraisal Rights&#148; is incorporated herein by reference.</TD>
</TR>
<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Provisions for Unaffiliated Security Holders.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has not made any provision to grant its unaffiliated
shareholders access to the corporate files of the Company or to obtain
counsel or appraisal services for such unaffiliated shareholders at
the expense of the Company.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Eligibility for Listing or Trading.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;5. Past Contacts, Transactions, Negotiations and Agreements.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Transactions.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Certain Relationships and Related Transactions&#148; is
incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Significant Corporate Events.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Certain Relationships and Related Transactions,&#148; &#147;Proposal
No.&nbsp;4 Reincorporation of the Company from California to Delaware,&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to Effect
1-for-20 Reverse Split&#151;Special Factors of the Reverse Split&#151;Reasons
for the Reverse Split&#148; is incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Negotiations or Contacts.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Certain Relationships and Related Transactions&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to Effect
1-for-20 Reverse Split&#151;Special Factors of the Reverse Split&#151;Reasons
for the Reverse Split&#148; and &#147;&#151;Special Factors of the Reverse
Split&#151;Fairness of the Reverse Split to Unaffiliated Shareholders&#148; is
incorporated herein by reference.</TD>
</TR>


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

<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; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt"><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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Agreements Involving the Subject Company&#146;s Securities.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Certain Relationships and Related Transactions,&#148; &#147;Proposal
No.&nbsp;5 Amendment to Certificate of Incorporation to Effect 1-for-20
Reverse Split&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split&#148; and &#147;Beneficial Ownership of Securities and Security
Ownership of Management&#148; is incorporated herein by reference.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;6. Purpose of the Transaction and Plans or Proposals.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Use of Securities Acquired.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Amendment to Certificate of
Incorporation to Effect Reverse Split&#151;Accounting Consequences of the
Reverse Split&#148; is incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Plans.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet,&#148; &#147;Proposal No.&nbsp;3 Amendment to Bylaws
Regarding Size of Board,&#148; &#147;Proposal No.&nbsp;4 Reincorporation of the
Company from California to Delaware,&#148; and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Purposes and Alternatives of the Reverse
Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split&#148; and &#147;&#151;Amendment to Certificate of Incorporation to
Effect Reverse Split&#148; is incorporated herein by reference.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;7. Purposes, Alternatives, Reasons and Effects.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Purposes.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet&#148;,
&#147;Special Factors&#148;
 and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Purposes and Alternatives of the Reverse
Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split&#148; and &#147;&#151;Amendment to Certificate of Incorporation to
Effect Reverse Split&#148; is incorporated herein by reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Alternatives.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Special Factors&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Questions and Answers Concerning the
Reverse Split&#148; and &#147;&#151;Special Factors of the Reverse Split&#151;Purposes
and Alternatives of the Reverse Split&#148; is incorporated herein by
reference.</TD>
</TR>



<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reasons.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet&#148;,
&#147;Special Factors&#148;
and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Purposes and Alternatives of the Reverse
Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Fairness of
the Reverse Split to Unaffiliated Shareholders,&#148; and &#147;&#151;Amendment to
Certificate of Incorporation to Effect Reverse Split&#148; is incorporated
herein by reference.</TD>
</TR>


</TABLE>
</DIV>


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

<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; margin-left: .25in; width: 7.50in">

<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Effects.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>



<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet&#148;,
&#147;Special Factors&#148;
and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Purposes and Alternatives of the Reverse
Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Effects of
the Reverse Split on our Affiliates,&#148; &#147;&#151;Special Factors of the
Reverse Split&#151;Effects of the Reverse Split on our Other
Shareholders,&#148; and &#147;&#151;Amendment to Certificate of Incorporation to
Effect Reverse Split&#148; is incorporated herein by reference.</TD>
</TR>


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;8. Fairness of the Transaction.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Fairness.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet&#148;,
&#147;Special Factors&#148;
 and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Questions and Answers Concerning the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Purposes and Alternatives of the Reverse
Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for the
Reverse Split,&#148; and &#147;&#151;Special Factors of the Reverse Split&#151;Fairness
of the Reverse Split to Unaffiliated Shareholders&#148; is incorporated
herein by reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Factors Considered in Determining Fairness.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Special Factors&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Special Factors of the Reverse
Split&#151;Purposes and Alternatives of the Reverse Split,&#148; &#147;&#151;Special
Factors of the Reverse Split&#151;Reasons for the Reverse Split,&#148; and
&#147;&#151;Special Factors of the Reverse Split&#151;Fairness of the Reverse Split
to Unaffiliated Shareholders&#148; is incorporated herein by reference.</TD>
</TR>



<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approval of Security Holders.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Special Factors&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Questions and Answers Concerning the
Reverse Split&#148; and &#147;&#151;Special Factors of the Reverse Split&#151;Fairness
of the Reverse Split to Unaffiliated Shareholders&#148; is incorporated
herein by reference.</TD>
</TR>



<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Unaffiliated Representative.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Special Factors&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Questions and Answers Concerning the
Reverse Split&#148; and &#147;&#151;Special Factors of the Reverse Split&#151;Fairness
of the Reverse Split to Unaffiliated Shareholders&#148; is incorporated
herein by reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Approval of Directors.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Special Factors&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Questions and Answers Concerning the
Reverse Split,&#148; &#147;&#151;Special Factors of the Reverse Split&#151;Reasons for
the Reverse Split,&#148; and &#147;&#151;Special Factors of the Reverse
Split&#151;Fairness of the Reverse Split to Unaffiliated Shareholders&#148; is
incorporated herein by reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Other Offers.</TD>
</TR>
<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable</TD>
</TR>


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

<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; margin-left: .25in; width: 7.50in">

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


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;9. Reports, Opinions, Appraisals and Negotiations.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Report, Opinion or Appraisal:</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preparer and Summary of the Report, Opinion or Appraisal.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Availability of Documents.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;10. Sources and Amounts of Funds or Other Consideration.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Source of Funds.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet&#148; and &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Amendment to Certificate of Incorporation to Effect Reverse
Split&#151;Expenses&#148; is incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Conditions.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Expenses.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Summary Term Sheet,&#148; &#147;Proposal No.&nbsp;5 Amendment to
Certificate of Incorporation to Effect 1-for-20 Reverse
Split&#151;Amendment to Certificate of Incorporation to Effect Reverse
Split&#151;Expenses,&#148; and &#147;Other Matters&#151;Expenses of Proxy Solicitation&#148;
is incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Borrowed Funds.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;11. Interest in Securities of the Subject Company.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Securities ownership.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement entitled &#147;Summary Term
Sheet,&#148; &#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to Effect 1-for-20
Reverse Split&#151;Special Factors of the Reverse Split&#151;Effects of the Reverse Split on our
Affiliates,&#148; and &#147;Beneficial Ownership of Securities and Security Ownership of
Management&#148; is incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Securities transactions.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>None.</TD>
</TR>


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

<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; margin-left: .25in; width: 7.50in">

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


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;12. The Solicitation or Recommendation.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Intent to Tender or Vote in a Going-Private Transaction.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled
&#147;Proposal No. 4 Reincorporation of the Company from California to Delaware &#151; Reincorporation of the Company from California
to Delaware &#151;
Intent to Vote&#148; and &#147;&#151;Recommendation of the Board,&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Amendment to Certificate of
Incorporation to Effect Reverse Split&#151;Intent to Vote,&#148; and
&#147;&#151;Recommendation of the Board&#148; is incorporated herein by reference.</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">e.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Recommendations of Others.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the sections of the Proxy Statement
entitled &#147;Proposal No. 4 Reincorporation of the Company from California to Delaware &#151; Reincorporation of the Company from California
to Delaware &#151;
Recommendation of the Board,&#148; and
&#147;Proposal No.&nbsp;5 Amendment to Certificate of Incorporation to
Effect 1-for-20 Reverse Split&#151;Amendment to Certificate of
Incorporation to Effect Reverse Split&#151;Recommendation of the Board&#148; is
incorporated herein by reference.</TD>
</TR>



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;13. Financial Statements.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Financial Statements.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement entitled &#147;Financial
Information&#148; is incorporated herein by reference.</TD>
</TR>

<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>



<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The following financial statements of the Company are incorporated by reference from the
Company&#146;s Form 10-K for the year ended December&nbsp;31, 2009
and Form 10-Q for the quarter ended September&nbsp;30, 2010:</TD>
</TR>


<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The audited financial statements for the years ended December&nbsp;31, 2009 and 2008</TD>
</TR>


<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The unaudited financial statements for the three and nine
months ended September&nbsp;30, 2010</TD>
</TR>


<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pro forma information.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;14. Persons/Assets, Retained, Employed, Compensated or Used.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Solicitations or Recommendations.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Other Matters&#151;Expenses of Proxy Solicitation&#148; is
incorporated herein by reference.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Employees and Corporate Assets.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The information set forth in the section of the Proxy Statement
entitled &#147;Other Matters&#151;Expenses of Proxy Solicitation&#148; is
incorporated herein by reference.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;15. Additional Information.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Additional Information.
</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All of the information set forth in the Proxy Statement and each
appendix attached thereto is incorporated herein by reference.</TD>
</TR>

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

<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; margin-left: .25in; width: 7.50in">

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


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt"><B>Item&nbsp;16. Exhibits.</B>
</DIV>


<DIV style="margin-top: 10pt">
<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="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">a.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Preliminary Proxy Statement of the Company, Notice of the Annual
Meeting of Shareholders and Related Information (the Company hereby
incorporates by reference the revised preliminary proxy statement which was
filed with the Securities and Exchange Commission contemporaneously
with this Schedule&nbsp;13E-3/A)</TD>
</TR>


<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">b.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">c.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Second Amended and Restated Convertible Promissory Note issued by the
Company and Bell Industries Inc. (a Minnesota corporation), originally
issued on January&nbsp;31, 2007 and amended and restated on March&nbsp;12, 2007
and as further amended and restated on June&nbsp;13, 2008 (incorporated by
reference to Exhibit&nbsp;4.1 of the Company&#146;s Current Report on Form 8-K
dated June&nbsp;13, 2008)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.2</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Amendment Number One to the Second Amended and Restated Convertible
Promissory Note, dated March&nbsp;25, 2009, between the Company and
Newcastle Partners, L.P. (incorporated by reference to Exhibit&nbsp;10.q.
of the Company&#146;s Annual Report on Form 10-K dated December&nbsp;31, 2008)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.3</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Amendment Number Two to the Second Amended and Restated Convertible
Promissory Note, dated February&nbsp;11, 2010, between the Company and BI
Holdings, L.P., the successor payee to Newcastle Partners, L.P.
(incorporated by reference to Exhibit&nbsp;10.2 of the Company&#146;s Current
Report on Form 8-K dated February&nbsp;18, 2010)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.4</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Registration Rights Agreement, dated as of January&nbsp;31, 2007, between
the Company and Newcastle Partners, L.P. (incorporated by reference to
Exhibit&nbsp;4.3 of the Company&#146;s Current Report on Form 8-K dated January
31, 2007)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.5</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Security Agreement, dated as of March&nbsp;12, 2007, between the Company
and Newcastle Partners, L.P. (incorporated by reference to Exhibit
10.1 of the Company&#146;s Current Report on Form 8-K dated March&nbsp;12, 2007)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.6</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Purchase Agreement, dated as of January&nbsp;31, 2007, between the Company
and Newcastle Partners, L.P. (incorporated by reference to Exhibit&nbsp;4.1
of the Company&#146;s Current Report on Form 8-K dated January&nbsp;31, 2007)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">d.7</TD>
    <TD width="1%">&nbsp;</TD>
    <TD> Waiver and Amendment Agreement, dated June&nbsp;13, 2008, between the
Company and Newcastle Partners, L.P. (incorporated by reference to
Exhibit&nbsp;10.3 of the Company&#146;s Current Report on Form 8-K dated June
13, 2008)</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">f.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

<TR style="font-size: 8pt">
    <TD>&nbsp;</TD>
</TR> <TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">g.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Not applicable.</TD>
</TR>

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

<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; margin-left: .25in; width: 7.50in">

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


</TABLE>
</DIV>

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


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">After due inquiry and to the best of my knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
</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="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>
<TR valign="bottom">
    <TD valign="top">December&nbsp;3, 2010</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">BELL INDUSTRIES, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV align="left"><FONT size="1">

</FONT></DIV></TD></TR>

<TR valign="bottom" style="padding-top: 1px"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Clinton J. Coleman
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Name: Clinton J. Coleman
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Its: Chief Executive Officer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body --></TABLE>
</DIV>



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

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