In accordance with Section 1.4 of the Purchase Agreement, the Company must deliver to PESI at least five business days prior to Closing the Estimated Closing Balance Sheet, which the Company currently estimates will reflect an Estimated Net Working Capital Amount of approximately $4,961,977. This Estimated Net Working Capital Amount would result in an Estimated Net Working Capital Deficiency of approximately $5,038,023 to be deducted from the Cash Consideration and the Purchase Price. The Estimated Net Working Capital Deficiency could change from the Company’s current estimate, which would result in a larger or lesser amount to be deducted from the Cash Consideration payable to the Company at the Closing and a commensurate change in the Purchase Price. The calculation of the Estimated Net Working Capital Deficiency includes deductions of receivables outstanding longer than 120 days, PESI’s review and identification of receivables it considers to be at risk and the parties’ mutual agreement as to which receivables of SEHC and its subsidiaries are at risk of collection when calculating SEHC’s Current Assets for such purposes in accordance with Section 1.4(b) of the Purchase Agreement. Section 1.5(a) provides that PESI shall prepare and deliver to the Company a Closing Statement reflecting the Net Working Capital Amount of SEHC as of the Closing, or the Closing Net Working Capital Amount, within 75 days after the Closing. Section 1.5(b) provides that the Company may dispute the Closing Net Working Capital Amount and the Closing Statement within 45 days after the Company’s receipt of the Closing Statement. The parties have agreed that the Closing Statement will be prepared and delivered at the Closing and the parties have therefore agreed to review and finalize the Closing Net Working Capital Amount, as reflected on the Closing Statement, contemporaneously with the Closing. If the Final Net Working Capital Deficiency is the same as the Estimated Net Working Capital Deficiency, and the Estimated Net Working Capital Deficiency has not changed from the Company’s estimate set forth above, an aggregate of $5,038,023 will be deducted at Closing from the Cash Consideration payable to the Company and the Purchase Price. As described above, however, the deficiency could increase or decrease pursuant to the terms of the Purchase Agreement, which would result in a larger or lesser amount being deducted from the Cash Consideration payable to the Company at Closing and a commensurate change in the Purchase Price.

In addition, the parties have agreed, pursuant to Section 3 of the Note, that PESI will prepay $500,000 of the principal amount payable under the Note to the Company within ten days after the Closing.

Finally, PESI has agreed to a conditional waiver of a potential breach of the representations and warranties made by the Company and SEHC in the Purchase Agreement arising out of certain issues regarding the performance of one of SEHC’s subsidiaries under a Material Contract with a Material Customer (as each such term is defined in the Purchase Agreement) that the parties believe may cause such Material Customer to modify its relationship with SEHC and/or such subsidiary or its usage of the services of SEHC or such subsidiary, such that the Material Contract at issue may not be renewed at the time of its potential renewal, or that if it is renewed, it will not be renewed on substantially the same terms (the “Contingent Claim”). The parties have therefore agreed that if such Material Contract has not been renewed at the time of its potential renewal on terms substantially similar to the current terms, this Contingent Claim would result in Losses (as defined in the Purchase Agreement) incurred by PESI in the sum of $1,500,000 for which PESI would be entitled to indemnification pursuant to Section 8.1 of the Purchase Agreement and distribution from the Escrow Account. Such distribution would be made automatically and without any further action on the part of the Company.

In addition, in connection with the Current Report on Form 8-K filed with the SEC on October 20, 2011, the Company clarifies that Christopher P. Leichtweis who resigned as President and a director of the Company effective October 14, 2011, continues in his positions as Chief Executive Officer and founder of SEHC.

As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on September 21, 2011, the Company is currently in default under the terms of the Forbearance Agreement, dated July 29, 2011 and as amended on September 7, 2011 (as amended, the “Forbearance Agreement”), entered into by and among the Company, YA, as lender, Homeland Security Advisory Services, Inc., Celerity Systems, Inc. and Nexus Technologies Group, Inc. (now known as NTG Management Corp.). As of September 15, 2011, the Company became subject to foreclosure by YA without notice. YA may immediately commence enforcing its rights and remedies pursuant to the Forbearance Agreement, the agreements relating to the Debt and under applicable law. However, YA has not yet notified the Company of its intention to foreclose on the assets of the Company, all of which are pledged as collateral for the Debt.

If the Company does not consummate the Sale, we expect that YA would foreclose on the Company’s assets. However, if the Sale is consummated as described in the Supplement and the net proceeds of such Sale are used to pay down the Debt, as required by the Forbearance Agreement, YA has informed us that it will not foreclose on the Company’s assets and will agree to new repayment terms with respect to the remaining portion of the Debt. The decrease in the Purchase Price, as described in the Supplement, will result in a lesser amount of the Debt being paid off by the Company.