Item 1.01.

Entry into a Material Definitive Agreement.

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reduce our authorized capitalization from 175,000,000 shares to 145,000,000 shares;

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reduce the number of authorized shares of preferred stock from 60,000,000 shares to 30,000,000 shares;

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change the name of “Series CalCap Preferred Stock” to “Series A Preferred Stock”;

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eliminate the “Series KIP Preferred Stock”;

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provide the holders of Series A Preferred Stock with three votes for each share of common stock that the Series A Preferred Stock held by them is convertible into on all matters submitted to our stockholders for a vote; and

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provide the holders of Series A Preferred Stock with the right, so long as at least 10,000,000 shares of Series A Preferred Stock remain outstanding, to appoint a majority of the members of our board of directors;

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agreed to issue to CalCap, at the time of Conversion, a five year warrant to purchase 4,300,000 shares of Series A Preferred Stock at an exercise price of $0.25 per share, a five year warrant to purchase 4,000,000 shares of Series A Preferred Stock at an exercise price of $0.40 per share and a five year warrant to purchase 2,000,000 shares of Series A Preferred Stock at an exercise price of $0.60 per share (collectively, the “Warrants”);

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amended that certain Registration Rights Agreement, dated as of February 5, 2010, between us and CalCap in order to classify the shares of common stock issuable upon the conversion of the shares of Series A Preferred Stock that are issuable upon the exercise of the Warrants as registrable securities under such agreement, thereby entitling such shares to all of the registration rights set forth in such agreement;