If we cannot maintain our government permits or cannot obtain any required permits, we may not be able to continue or expand our operations.

            Our business is subject to extensive, evolving, and increasingly stringent federal, state, and local environmental laws and regulations. Such federal, state, and local environmental laws and regulations govern our activities regarding the treatment, storage, recycling, disposal, and transportation of hazardous and non-hazardous waste and low-level radioactive waste. We must obtain and maintain permits, licenses and/or approvals to conduct such activities in compliance with such laws and regulations. Failure to obtain and maintain such permits, licenses and/or approvals would have a material adverse effect onimpact our operations and financial condition. There can be no assurance that we will be able to maintain our currently held permits, licenses, and/or approvals or obtain any additional permits, licenses and/or approvals which may be required as we expand our operations.

Our liquidity and profitability affects our ability to comply with governmental regulations.

           Because the environmental industry continues to develop rapidly, we cannot predict the extent to which our operations may be affected by future enforcement policies as applied to existing laws, by changes to current environmental laws and regulations, or by the enactment of new environmental laws and regulations. Any predictions regarding possible

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 liability under such laws are complicated further by current environmental laws which provide that we could be liable, jointly and severally, for certain activities of third parties over whom we have limited or no control. The standards imposed by federal, state, and local permitting laws require us to incur certain levels of capital expenditures to maintain compliance with such standards.

           Our inability to become profitable on a long-term basis could have a negative impact on our ability to remain in compliance with various federal, state, and local environmental regulations. Violation of such federal, state, and local regulations could result in the loss of one or more of our permits or subject uswhich we are required to substantial fines, penalties, or other liabilities that could have a material adverse impact onin order to operate our business.

As our operations expand, we may be subject to increased litigation.

          Our operations are regulated by numerous laws regarding procedures for waste treatment, storage, recycling, transportation, and disposal activities, all of which may provide the basis for litigation against us. In recent years, the waste treatment industry has experienced a significant increase in so-called "toxic-tort" litigation as those injured by contamination seek to recover for personal injuries or property damage. We believe that as our operations and activities expand, there will be a similar increase in the potential for litigation alleging that we are responsible for contamination or pollution caused by our normal operations, negligence or other misconduct, or for accidents which occur in the course of our business activities. Such litigation, if significant and not adequately insured against, could have a material adverse effect upon our operations and financial condition. Protracted litigation would likely cause us to spend significant amounts of our time, effort, and money. This could prevent our management from focusing on our operation and expansion, thereby resulting in a material adverse effect upon us.

facilities.

Our operations will suffer if we are unable to manage our rapid growth.

          We are currently experiencing a period of rapid growth through internal expansion and strategic acquisitions. This growth has placed, and could continue to place, a significant strain on our management, personnel, and other resources. Our ability to grow effectively will require us to effectively manage our collaborative arrangements and to continue to improve our operational, management, and financial systems and controls, and to successfully train, motivate, and manage our employees. Management's

materially adversely affected.

          Our credit facility provides

seasonal slowdown in operations from poor weather conditions, overall reduced activities during these periods resulting from holiday periods, and finalization of government budgets during the fourth quarter of each year. During our second and third fiscal quarters there has historically been an increase in revenues and operating profits. If we do not continue to have increased revenues and profitability during the second and third fiscal quarters, this will have a material adverse effect on our results of operations and liquidity.

          The terms of the Series 17 Preferred allow us to pay dividends on the outstanding Series 17 Preferred in cash or common stock. We currently intend to pay the dividends accruing on the Series 17 Preferred in common stock if, and when, declared and paid by our Board of Directors. This prospectus includes up to 250,000 shares of common stock which may be issued as dividends on the Series 17 Preferred. The actual number of shares of common stock issuable in payment of such accrued dividends may be more or less depending upon, among other things, the length of time the Series 17 Preferred is outstanding and the price of the common stock at the time of payment of dividends. Our credit facilityCredit Facility prohibits us from paying cash dividends on our common stock.

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Wemarket price of our common stock will continue to fluctuate. This may be unablemake it difficult for you to utilize loss carryforwardsresell the common stock when you want or at prices you find attractive.

           Wepublic market, or the perception that such sales could occur, could adversely affect prevailing trading prices of our common stock, and impair our ability to raise capital through future offerings of equity.  No prediction can be made as to the effect, if any, that future issuances or sales of shares of common stock or the availability of shares of common stock for future issuance, will have approximately $13.8 million in net operating loss carryforwards which will expire from 2004 to 2020 if not used againston the trading price of our common stock.  Such future federal income tax liabilities. Our net loss carryforwards are subject to various limitations and have not been approved by the Internal Revenue Service. We anticipate the net loss carryforwards will be used toissuances could also significantly reduce the federal income tax payments which we would otherwise be required to make with respect to income, if any, generated in future years.

percentage ownership and dilute the ownership value of our existing common stockholders.

          The issued

We currently do not have a sufficient number of shares of common stock available for issuance if all of our outstanding options and warrants are exercised and our outstanding preferred stock is converted. Consequently, if our stockholders do not approve an increase in the number ofto purchase 3,558,347 shares of our authorized common stock, we could be in default under our various obligations to issue common stock.

          Our Restated CertificateCommon Stock) shares of Incorporation,Common Stock and 2,000,000 shares of Preferred Stock as amended (the "Certificate"), presently authorizes 52 millionof  March 31, 2009 (which includes 600,000 shares of our capital stock, consisting of 50 million shares of common stock and 2 million shares of preferred stock. As of September 21, 2001, 33,763,177 shares of common stock were issued and outstanding, leaving 16,236,823 authorized shares (including 988,000 treasury shares) availablePreferred Stock reserved for future issuance. However, if all of our currently exercisable warrants and options are exercised andissuance under our preferred stock is converted, we would be obligated to issue 19,260,418share rights plan).  These unissued shares of common stock, which is 3,023,595 shares more than would be available for issuance. To provide us with additional shares of authorized common stock, our Board will recommend that our stockholders approve an amendment to the Certificate to increase our authorized shares of common stock from 50 million to 75 million. Our Board expects that this proposal will be presented to our stockholders at a special meeting to be held before year's end. See "RECENT DEVELOPMENTS - Private Placement: Unit Warrants and Placement Agent Warrants."

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          If the stockholders do not approve the amendment increasing the number of authorized shares of common stock, we may be unable to fulfill all of our potential obligations to issue shares of common stock. If we are unable to fulfill these obligations, it is possible that certain actions could be taken against us for losses and damages, which could have a material adverse effect on us.

If our stockholders approve an increase in the number of shares of our common stock, such increase could be used by management to discourage corporate takeovers and could prevent stockholders from realizing a premium on their investment.

          The Board will recommend that our stockholders approve at a special meeting to be held prior to year's end an increase in its number of authorized shares of common stock from 50 million to 75 million. In addition to the need for additional shares to fulfill our current potential obligations to issue common stock, as discussed above, increasing the number of authorized shares of common stock is also necessary to provide us with the ability to issue common stock from time to time as needed for proper corporate purposes, such as:

*    raising capital funds through private or public offerings;

          *    acquiring other companies;

*    declaring stock splits or stock dividends; and

*    issuing common stock under warrants, preferred stock, or other rights which may be granted by us from 
               time to time in the future.

           Such additional authorization of shares of common stock could be used by incumbent management to make it more difficult, and thereby discourage an attempt to acquire control of us, even thoughus.

           The Note Warrants are exercisable at any time, from time to time, beginning July 31, 2001, until July 31, 2008 at an exercise priceoccur of $1.50 per share(a) 10 days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) have acquired beneficial ownership of 20% or more of our outstanding common stock. The Note Warrants may also be exercised at the option of the holderstock (except pursuant to a cashlessPermitted Offer, as defined below, or persons excluded from being an Acquiring Person under the Rights Agreement) or (b) 10 business days (or such later date as may be determined by action of the Board of Directors prior to such time as any person becomes an Acquiring Person) following the commencement of, or announcement of an intention (which intention to commence remains in effect for 5 business days after such announcement) to make a tender offer or exchange offer, the consummation of which would result in a person or group becoming an Acquiring Person of 20% or more of our common stock (the earlier of such dates being called the “Distribution Date”), the Rights will be evidenced with respect to any of the common stock certificates outstanding and no separate Rights Certificates will be distributed.

           If,event that at any time after July 31, 2001,(a) we issue or sell additional shares of common stock (including certain option and convertible securities under which common stock may be issued) without consideration or forare acquired in a consideration per share less than the market price of the common stock on the date of, and immediately prior to, such issue or sale, the exercise price of the Note Warrants will be reduced to a price determined by multiplying the exercise price by a fraction:

          Upon an adjustment in the exercise price of the Note Warrants, the number of shares issuable upon exercise of the Note Warrants will be adjusted by multiplying the number of shares of common stock which would otherwise be issuable upon such exercise by a fraction:

           *    the numerator of which is $1.50; and

           *    the denominator of which is the exercise price, as may be adjusted under the terms of the Note Warrants.

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          If after July 31, 2001, we declare a dividendmerger or other distribution on our common stockbusiness combination transaction in which we are not the survivor, (b) a merger or other than a dividend payable in common stock or options for common stock or a regular periodic dividend payable in cash and declared out of earned surplus of the Company, the exercise price in effect prior to the record date for such dividend will be reduced to a price determined by multiplying the exercise price by a fraction (a) the numerator of which will be the current market price on such record date less the value of the dividend or distribution applicable to one share of common stock; and (b) the denominator of which shall be the current market price.

          The Note Warrants' anti-dilution terms further provide that, if after July 31, 2001, we:

          *    consolidatebusiness combination with or merge into another person without being the continuing or surviving corporation; or

          *    consolidate or merge with another personus in which we are the continuing or surviving corporation but 
                our common stock or other securities are exchanged for other securities of another person; or

          *    we transfersurvivor and, in connection with such transaction, all or substantially all of our properties; or

          *    we effect a capital reorganization or reclassification of our common stock or other securities which are 
                not subject to the anti-dilution provisions discussed above,

then the holders of the Note Warrants will be entitled to receive the amount of cash, securities or other property, which the holder would have been entitled to receive if holder had exercised the Note Warrants immediately prior to the transaction. An exception to the above sentence is if a purchase, tender, or exchange offer has been accepted by our stockholders and

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following such purchase, tender, or exchange offer, the maker thereof, together with its affiliates own more than 50% of our outstanding common stock, then holders of the Note Warrants have the option to receive the amount of cash, securities, or other property to which the holder would have been entitled, if the holder of the Note Warrants had exercised the Note Warrants prior to the expiration of such purchase, tender or exchange offer and accepted such offer, and all of the common stock held by such holder had purchased pursuant to such purchase, tender or exchange offer.

          The Subordinated Notes and Note Warrants were sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended (the "Act"), and/or Rule 506 of Regulation D promulgated under the Act, and, therefore, were not registered under the Act. The holders of the Note Warrants have the right to demand registrationpart of the shares of common stock issuable undershall be changed for stock or other securities of any other person (or us) or (c) more than 50% of our assets or earning power is sold or transferred, then each holder of a Right (except Rights which have been voided as set forth below) shall thereafter have the Note Warrants on two occasions and also have certain piggyback registration rights.

           In connection with the saleright (the “Flip-Over Right”) to receive, upon exercise, common stock of the Subordinated Notes, we entered into an Option Agreement, dated July 31, 2001, with AMI and BEC (the "Option Agreement"). Pursuantacquiring company having a value equal to two times the Option Agreement, we granted each purchaserPurchase Price of the Subordinated Notes an irrevocable option requiring usRight. The Flip-Over Right is not applicable to purchase any or alltransactions described in (a) and (b) of the Note Warrants or the shares ofthis paragraph if (i) such transaction is consummated with a person who acquired common stock issuable underpursuant to a Permitted Offer; (ii) the Note Warrants then held by the purchaser (the "Put Option"). The Put Option may be exercised at any time commencing July 31, 2004, and ending July 31, 2008. In addition, each purchaser granted us an irrevocable option to purchase all of the Note Warrants or the shares issued under the Note Warrants which are then held by the purchaser (the "Call Option"). The Call Option may be exercised at any time commencing July 31, 2005, and ending July 31, 2008. The purchase price under the Put Option and the Call Option is based on the quotient obtained by dividing (a) the sum of six times our consolidated EBITDA for the period of the 12 most recent consecutive months minus Net Debt plus the Warrant Proceeds by (b) our Diluted Shares (as the terms EBITDA, Net Debt, Warrant Proceeds, and Diluted Shares are defined in the Option Agreement).

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Private Placement: Unit Warrants and Placement Agent Warrants

           On July 30, 2001, we completed a private placement offering of units (the "Private Placement") to accredited investors. Each unit is comprised of one share of our common stock and one warrant to purchase one share of common stock (a "Unit Warrant"). The purchase price for each unit was $1.75, and the exercise price of each Unit Warrant is $1.75, subject to adjustment under certain conditions. We accepted subscriptions for 4,397,566 of the maximum 4,400,000 units offered, for an aggregate purchase price of $7,695,740.

           Under the terms of the Private Placement, we had the right to appoint one or more placement agents (each, a "Placement Agent") to place the units as our agent and to assist in completing the Private Placement. We paid each Placement Agent a private placement fee equal to 7.5% of the aggregate purchase price for units placed by that particular Placement Agent. We also issued to each Placement Agent warrants to purchase up to the number of shares of common stock equal to 7% of the aggregate purchase price for units placed by that particular Placement Agent, divided by $1.75 (the "Placement Agent Warrants"). The Placement Agent Warrants are for a term of five years and have an exercise price of $1.75 per share. As a result, we paid the Placement Agents $232,031 in total fees and issued to them Placement Agent Warrants for the purchase of up to an aggregate of 123,750 shares of common stock.

          The Private Placement was sold only to accredited investors as that term is defined under Regulation D of the Act. One of the investors in the Private Placement was Capital Bank, which subscribed for 842,995 units under the Private Placement. Capital Bank may be considered a beneficial owner of more than 10% of our issued and outstanding common stock. Capital Bank directly owns, as agent for its investors, 9,972,914 shares of common stock, or 29.5% of our outstanding common stock as of September 21, 2001, and holds warrants and convertible preferred stock entitling it to purchase or receive up to an additional 6,975,317 shares of common stock. See "POTENTIAL CHANGE IN CONTROL" for a discussion of Capital Bank's ownership of our securities as agent for its various investors.

           Under the original terms of the Private Placement, we offered to sell a maximum of 5,000,000 units. After the Private Placement commenced, however, the maximum number of units offered was reduced to 4,400,000 in order to comply with Rule 4350(i)(1)(D) of the rules of the National Association of Securities Dealers, Inc. Our common stock is listed for trading on the Nasdaq and the Boston Stock Exchange ("BSE"). Although the BSE approved the listing of the shares of common stock to be issued in connection with the Private Placement and upon the exercise of the Unit Warrants and the Placement Agent Warrants, the Nasdaq advised the Company that the Private Placement could violate Rule 4350(i)(1)(D) governing the listing of additional securities on the Nasdaq as originally structured.

           Rule 4350(i)(1)(D) provides that a corporation may not, through a private offering such as the Private Placement, issue a number of shares of common stock equal to or greater than 20% of the corporation's outstanding common stock at a price less than the greater of book or market value of the common stock without first obtaining shareholder approval. At the time of the discussion with Nasdaq, we had approximately 22.5 million shares of common stock outstanding, and the Private Placement of up to 5 million units would result in up to 10 million shares being issued if the Unit Warrants were exercised, representing more than 30% of our then issued and outstanding common stock. For purposes of determining whether the Private Placement complies with Rule 4350 (i)(1)(D), the Nasdaq asserted that we must determine market value as of the date that each subscription agreement for units is executed by the investor and becomes binding and not April 6, 2001, the date the Private Placement commenced. Because the price of the common stock as reported on the Nasdaq rose from $1.6875 per share on the date the Private Placement commenced to $2.27 on the date the Private Placement terminated, numerous subscription agreements were executed at a time when the market value per share of common stock was greater than the $1.75 purchase price per unit. The Nasdaq claimed that the subscription agreements executed on a date when the market price was greater than the $1.75 unit purchase price represented sales atoffered in such transaction is not less than the greater of book or market value of the common stock, thereby violating Rule 4350(i)(1)(D).

           In order to comply with Rule 4350(i)(1)(D), we agreed with Nasdaq to restructure the Private Placement so that (a) the maximum number of units offered was reduced from 5 million to 4.4 million, and (b) the Unit Warrants and the Placement

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Agent Warrants could not be exercisable until our stockholders approved the issuance of the shares of common stock upon the exercise of the Unit Warrants and the Placement Agent Warrants. Prior to the closing of the Private Placement, the Placement Agents and the initial investors who subscribed for units agreed to amend the terms of the Unit Warrants and the Placement Agent Warrants pursuant to our agreement with the Nasdaq. As a result of these modifications, only 4,397,566 shares of common stock, representing approximately 19.5% of the issued and outstanding shares of common stock as of the commencement of the Private Placement, have been issued under the Private Placement without stockholder approval.

           We anticipate mailing to our stockholders during the fourth quarter of 2001 our proxy statement soliciting proxies for the special meeting of stockholders to be held prior to year end (the "Special Meeting"). At the Special Meeting, the stockholders entitled to vote will be asked to approve the issuance of the shares of common stock issuable upon the exercise of the Unit Warrants and the Placement Agent Warrants and increase the authorized number of shares of our common stock from 50 million to 75 million. Capital Bank has advised us that it will recommend to its investors that they allow Capital Bank to vote the shares of common stock held of record by Capital Bank for the approval of these proposals. The Unit Warrants and the Placement Agent Warrants do not provide a penalty if we are unable to obtain such stockholder approval. If we do not obtain such stockholder approval, we will not be obligated to issue shares pursuant to the exercise of the Unit Warrants or the Placement Agent Warrants. If the proposal is approved by the stockholders and if all Unit Warrants and Placement Agent Warrants are exercised, we would receive approximately $7,912,000 in proceeds from such exercises. If the proposal is not approved, we will withdraw the shares of common stock issuable under the Unit Warrants and the Placement Agent Warrants from the registration statement containing this prospectus.

           Each Unit Warrant and Placement Agent Warrant entitles the holder to purchase oneprice per share of common stock at an exercise price of $1.75 per share, subjectpaid to the adjustments in certain cases described below. Each Unit Warrant and Placement Agent Warrant may be exercised at any time after stockholder approval of the issuanceall holders of common stock upon such exercise and priorpurchased pursuant to the expirationPermitted Offer, and (iii) the form of consideration offered in such transaction is the fifth anniversarysame as the form of consideration paid pursuant to the date of issuance of the Unit Warrants and Placement Agent Warrants.

Permitted Offer.

         *     consolidate with, or merge into, another corporation (other than a consolidation or merger which does not 
                 resultthe common stock occurring, in any reclassificationsuch case, prior to the Distribution Date.

         Pursuant tostock, our Board of Directors may exchange the terms of the Private Placement, we are required to file a registration statement under the Act for the resale of the common stock issued in the Private Placement Offering and the common stock issuable upon the exercise of the Unit Warrants and the Placement Agent Warrants.

Series 17 Preferred

           We entered into a Conversion and Exchange Agreement with Capital Bank, dated May 25, 2001, but effective as of April 6, 2001, whereby Capital Bank converted a portion of our then-outstanding preferred stockRights (other than Rights owned of record by Capital Bank, as agent for certain of its accredited investors, for shares of our common stock and exchanged the remaining preferred stock held by Capital Bank for shares of our newly designated Series 17 Preferred. The issuance of the Series 17 Preferred under the terms of the Conversion and Exchange Agreement was made in a private placement under Section 4(2) and/or Regulation D of the Act.

           Prior to the consummation of the Conversion and Exchange Agreement, Capital Bank owned of record, as its agent for certain of its accredited investors, 1,769 shares of our Series 14 Class N Convertible Preferred Stock (the "Series 14

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Preferred")such Acquiring Person which have become void), 616 shares of our Series 15 Class O Convertible Preferred Stock (the "Series 15 Preferred"), and 1,797 shares of our Series 16 Class P Convertible Preferred Stock (the "Series 16 Preferred"). Capital Bank converted 1,314 shares of Series 14 Preferred and 416 shares of Series 15 Preferred into an aggregate of 1,153,333 shares of our common stock. Capital Bank then exchanged the remaining shares of Series 14 Preferred, Series 15 Preferred, and Series 16 Preferred for a total of 2,500 shares of the Series 17 Preferred. As a result of the consummation of the Conversion and Exchange Agreement, no shares of Series 14 Preferred, Series 15 Preferred, or Series 16 Preferred remain outstanding.

           The terms of the Series 17 Preferred include the following:

           *     The Series 17 Preferred has a "stated value" of $1,000 per share. We may, at our sole option, redeem, 
in whole or in part, at any time, and from time to time, the then-outstanding Series 17 Preferred at the 
                   following cash redemption prices if redeemed during the following periods: (a)within 12 months from 
                   June 1, 2001 - $1,100 per share, and (b) after June 1, 2002 - $1,200 per share. Upon any noticean exchange ratio of
                   redemption, Capital Bank will have five business days to exercise its conversion rights regarding the 
                   redeemed shares.

           *     Capital Bank is entitled to receive if, when, and as declared by our Board of Directors out of funds legally
                  available, cumulative dividends at an annual dividend rate of 5% of the Liquidation Value for each share 
                  of the Series 17 Preferred then issued and outstanding as of the acceptable declaration of such dividend, 
                   payable semiannually within ten business days after each subsequent June 30^th and December 31^st. 
                   Dividends shall be payable in cash or shares of our common stock, at the Company's option. The 
                   Liquidation Value is $1,000 per share, subject to adjustment.

           If we merge or consolidate with another entity and we are not the survivor, or if we sell or convey all or substantially all of our property, then the holder of each share of Series 17 Preferred will have the right to convert its shares into the kind and amount of shares or other property receivable upon such consolidation or merger as if the Series 17 Preferred had been converted immediately prior to the consolidation, merger, sale or transfer.

           If we declare or pay any dividend or effect a subdivision of our common stock into a greater number of shares, or if the outstanding shares of common stock are combined or consolidated into a lesser number of shares, then the conversion price in effect immediately prior to the happening of such event will be proportionately increased or decreased.

          If we effect a capital reorganization or reclassification of our common stock or other securities which are not subject to the anti-dilution provisions discussed above, then the conversion price will be proportionately adjusted so that the Series 17 Preferred will be convertible into a number of shares of common stock of such other class or classes of stock equivalent to the number of shares of common stock that would have been subject to receipt by the holder upon conversion of preferred stock immediately before that change.

         If we sell any shares of common stock for a price less than the conversion price immediately in effect prior to such sale or any rights, warrants, or other securities entitling the holders thereof to convert such securities into common stock at a price per share less than the conversion price in effect on the date of such sale, then the conversion price will be adjusted as of the date of such sale to the amount per share received and to be received by us in connection with the sale, conversion and exercise. The holders of the Series 17 Preferred may waive their rights to any such adjustment. In addition, no adjustment is required in the case of stock options issued to employees.

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Exchange Agreement and Exchange Warrants

         On July 9, 2001, we entered into an agreement (the "Exchange Agreement") with Capital Bank to issue to Capital Bank, as agent for certain of its accredited investors, 1,893,505 shares of common stock and a warrant to purchase up to 1,839,405 shares of common stock at an exercise price of $1.75 per share (the "Exchange Warrant") in satisfaction of all amounts due or to become due under the Loan Agreement, dated August 29, 2000, between us and Capital Bank (the "$3 Million Loan") and a related Unsecured Promissory Note issued by us in favor of Capital Bank in the original principal amount of $3,000,000 (the "$3 Million Note"), including our obligations to issue to Capital Bank shares of common stock if the $3 Million Note was not paid by certain due dates. The $3 Million Note was due on July 1, 2001.

         Upon the closing of the Exchange Agreement effective July 9, 2001, we paid to Capital Bank a closing fee of $325,000, payable in $75,000 cash and by issuing to Capital Bank 105,932 shares of common stock, such number of shares being equal to the quotient of $250,000 divided by the last closing bid price of the common stock as quoted on the Nasdaq on June 26, 2001. In addition, for consulting services in connection with the Exchange Agreement, we issued to Herbert Strauss a five-year warrant for the purchase of up to 625,000 shares of common stock at a purchase price of $1.75 per share (the "Capital Exchange Warrant"). The terms of the Exchange Warrant and the Capital Exchange Warrant are substantively similar.

         The Exchange Warrant is exercisable at any time, from time to time, on or after July 9, 2001, and prior to July 9, 2006. If we propose to sell substantially all of our assets or merge or consolidate, or effect a merger or consolidation in which we are not the survivor, and the consideration to be received by us or our shareholders consists solely of cash, then the Exchange Warrant will terminate unless exercised by the effective date of the sale or merger transaction. If the consideration to be received by us or our shareholders consists, in whole or in part, of consideration other than cash, the holder of the Exchange Warrant will have the right thereafter to purchase the kind and amount of the shares and other securities and property which would have been owned or entitled to be received after such sale or merger transaction had the Exchange Warrant been exercised immediately prior to such transaction.

          The exercise price and the number of shares of common stock issuable upon exercise of the Exchange Warrant are subject to adjustment, from time to time, if we:

           *     combine our outstanding shares of common stock into a smaller number of shares of common stock, or

           *     issue any shares of our capital stock in reclassification of our common stock for the number of shares of 
                  common stock issuable upon exercise of the Exchange Warrant.

Upon any such transaction, the Exchange Warrant will be adjusted so that the holder of the Exchange Warrant will be entitled to receive the kind and number of shares of common stock or of our other securities which the holder would have owned or been entitled to receive had the Exchange Warrant been exercised in advance of such transaction.

          The holder of the Exchange Warrant will be entitled to purchase the number of shares of common stock or other securities, resulting from such adjustment at an exercise price perone share of common stock, or other security determined by:

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           *    multiplying the exercise price in effect immediately prior to such adjustment by the numberone-one hundredth of sharesa Preferred Share (or of
                 common stock purchasable pursuant to the Exchange Warrant immediately prior to such adjustment, 
                 divided by,

           *    the numbera share of shares of common stocka class or other securities resulting from such adjustment.

          The issuanceseries of the commonour preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment). Upon our  Board of Directors ordering the Exchange Warrant andexchange, the Capital Exchange Warrant under the terms of the Exchange Agreement was made pursuant to Section 4(2) and/or Rule 506 under Regulation D promulgated under the Act. Capital Bank has advised us that it is precluded by Austrian law from disclosing the identities of its investors, but that all of its investors are accredited investors under Rule 501 of Regulation D promulgated under the Act. In addition, Capital Bank has advised the Company that none of its investors beneficially own more than 4.9% of common stock. See "POTENTIAL CHANGE OF CONTROL" for a discussion of Capital Bank's holdings of our securities.

BHC Warrants

            On January 31, 2001, we entered into a definitive loan agreement with BHC Interim Funding, L.P. ("BHC"), pursuant to which BHC loaned us $6 million (the "BHC Loan"). The BHC Loan was payable on March 31, 2002, with interest payable monthly on the outstanding principal balance of the BHC Loan at the annual rate of $13.75%. We repaid the BHC Loan in full on July 31, 2001. Pursuant to the terms of the BHC Loan, we issued to BHC certain warrants (the "BHC Warrants") for the purchase of up to 817,142 shares of common stock at an initial exercise price of $1.4578 per share.

            The BHC Warrants allow the holderright to exercise the BHC Warrant without payingRight shall terminate and the exercise price in cash. Upon a cashless exercise, the holder willonly right thereafter shall be to receive the numbershares in accordance with the exchange.

             *one one-hundredth of a Preferred Share, which may, at the numberelection of shares as to which the BHC Warrants are being exercised, minus

             *Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash will be made based on the numbermarket price of shares having an aggregate fair market value equalthe Preferred Shares on the last trading day prior to the productdate of (a)exercise.

            The exercise price and the number of shares of common stock issuable upon exerciseearlier of the BHC Warrants are subject to adjustment, from time to time, uponDistribution Date or Final Expiration Date, our Board of Directors may redeem the occurrence of any of the following events. If we issue shares of common stock forRights in whole, but not in part, at a price of $0.001 per share less than the exercise priceRight (the “Redemption Price”), adjusted to reflect any stock split, stock dividend or similar transaction, and payable, at our option, either in effect before such issuance, the exercise price will be reduced to a price determined by multiplying the exercise price by a fraction having:

            *    the numerator equal to the total number of common stock shares outstanding plus the number of shares 
                  of common stock which the aggregate consideration received by us would purchase at such exercise 
                  price; and

            *    the denominator equal to the total number of shares of common stock outstanding immediately after such
                  issuance.

These adjustments will not be made as a result of the grant or exercise of rights or options under our existing stock purchase and stock option plans or under our warrants which were outstanding on January 1, 2001.

            If we issue options or rights to subscribe forcash, shares of common stock, or any securities convertible intoother form of consideration deemed appropriate by our  Board. The redemption of the rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holder of Rights will be to receive the Redemption Price.

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BHC Warrants will be proportionately decreased, or increased, as appropriate. If the exercise price is adjusted, the number of shares of common stock issuable upon the exercise of the BHC Warrant will be equal to:

           *    the product of: (a) the number of shares of common stock issuable upon the exercise of the BHC Warrant
                 immediately prior to such adjustment, and (b) the exercise price immediately prior to such adjustment, 
                 divided by

          *     the exercise price immediately after such adjustment.

           The exercise price and the number of shares of common stock issuable upon exercise of the BHC Warrants are subject to adjustment, from time to time, if we:

           *    reorganize or reclassify the outstanding shares of common stock;

           *    merge or consolidate with another corporation; or

           *    sell, lease or convey all, or substantially all, of our property, assets, business and goodwill to another entity.

Upon any such transaction, the BHC Warrant will be adjusted so that the holder of the BHC Warrant will be entitled to receive the kind and number of shares of common stock or of our other securities which the holder would have owned or been entitled to receive had the BHC Warrant been exercised in advance of such transaction.

           If we make a distribution of assets or securities to our stockholders, prior to the expiration of the BHC Warrant and prior to the exercise of the BHC Warrant, the holder of the BHC Warrant will be entitled, upon the exercise, to receive, in addition to the common stock it is entitled to receive, the same kind and amount of assets or securities as would have been distributed to it in a distribution had it been the holder of record of shares of common stock receivable upon exercise of the BHC Warrant on the record date for determination of those entitled to receive the distribution.

           If we dissolve, liquidate, or wind up our affairs at any time prior to the expiration or exercise of the BHC Warrant, the holder of the BHC Warrant will be entitled to receive, in lieu of our common stock, the same kind and amount of assets as would have been issued, distributed or paid to it upon the exercise of the BHC Warrant on the record date for the determination of those entitled to receive any such liquidating distribution.

          The holder of the BHC Warrants may, at any time and from time to time during the term of the BHC Warrants, request the registration of the BHC Warrant and common stock issuable upon the exercise of the BHC Warrants. In addition, the holder of the BHC Warrants is entitled, subject to certain conditions, to include the BHC Warrant and common stock issuable upon the exercise of the BHC Warrant in a registration statement covering other securities which the Registrant proposes to register.

Appointment of New Director

           On September 20, 2001, our Board appointed Mr. Jack Lahav as a member of the Board. Mr. Lahav is a private investor specializing in launching and growing businesses. Mr. Lahav is the founder and president of Remarkable Products, Inc. He also co-founded Lamar Signal Processing, Inc., a telecommunications company. Mr. Lahav currently serves as president of Advanced Technologies, Inc., a robotics company, and director of Vocaltech Communications, Inc. Mr. Lahav acquired 571,429 shares of common stock and warrants to purchase up to 571,429 shares of common stock in the Private Placement. These 1,142,858 shares are being offered under the prospectus. See "SELLING STOCKHOLDERS."  Mr. Lahav is 53 years old and resides at 18 Chelsea Drive, Livingston, New  Jersey  07039.

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           As of September 21, 2001, Capital Bank owned of record, as agent for certain accredited investors, 9,972,914 shares of common stock representing 29.5% of our issued and outstanding common stock. Capital Bank also has Company, including, without limitation, the right to acquire an additional 6,975,317 shares of common stock, comprised of (a) 842,995 shares issuable upon exercisevote or to receive dividends.

          If Capital Bank were to acquire the shares of common stock as described in the previous paragraph, Capital Bank would be our largest single shareholder, and we may not be able to avoid an actual change in control if Capital Bank seeks such a change in control. Moreover, if such conversion and exercise results in Capital Bank acquiring more than 50% of our then-outstanding common stock, we would not be able to avoid a change in control.

          If Capital Bank acquires the shares of common stock described in the previous paragraph, Capital Bank may be able to cause a change in at least 50% of the members of our Board of Directors. Such a change in Board membership could be an event of default under our $22 million credit facility (the "Credit Facility") and our $5.6 million outstanding Subordinated Notes. If Capital Bank were to acquire such shares and cause Dr. Louis Centofantipurport to be removed from our Boardcomplete and is qualified in its entirety by reference to the Rights Agreement.

          Capital Bank may have become a beneficial owner (as that term is defined under Rule 13d-3 as promulgated under the Exchange Act of 1934, as amended (the "Exchange Act")) of more than 10% of our common stock on February 9, 1996, as a result of its acquisition of 1,100 shares of Series 1 Class A Convertible Preferred Stock ("Series 1 Preferred") that were convertible into a maximum of 1,282,798 shares of common stock commencing 45 days after issuance of the Series 1 Preferred. If Capital Bank became a beneficial owner of more than 10% of our common stock on February 9, 1996, and was required to file reports under Section 16(a), Capital Bank has not filed with the Securities and Exchange Commission and the Company, among other reports, any Forms 3, 4 or 5 for years 1996 through the date of this registration statement, although it has entered into numerous transactions regarding the Company's equity securities.

           Capital Bank has advised us that it is a banking institution regulated by the banking regulations of Austria which holds shares of our common stock on behalf of numerous investors. Capital Bank asserts that it is precluded by Austrian law from disclosing the identities of its investors, but that all of its investors are accredited investors under Rule 501 of Regulation D promulgated under the Act. In addition, Capital Bank has advised us that none of its investors beneficially own more than 4.9% of our common stock. Capital Bank has further informed us that its clients (and not Capital Bank) maintain full voting and dispositive power over such shares. Consequently, Capital Bank has advised us that it believes it is not the beneficial owner, as such term is defined in Rule 13d-3, of the shares of our common stock registered in the name of Capital Bank because it has neither voting nor investment power, as such terms are defined in Rule 13d-3, over such shares. Capital Bank has informed us that it does not believe that it is required to file reports under Section 16(a) or to file either Schedule 13D or Schedule 13G in connection with the shares of our common stock registered in the name of Capital Bank.

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            We will not receive any part of the proceeds of the sale of Shares. We will receive approximately $21,789,000 if the Selling Stockholders exercise, for cash, all of the warrants covering Shares included in this prospectus. Any proceeds received by us from the exercise of such warrants, less our share of the estimated expenses of the cost of this offering, will be used by us for general corporate purposes.

            We have agreed to pay all costs and fees relating to the registration of the common stock coveredsecurities offered by this prospectus, except for any discounts, concessions, or commissions payable to underwriters, dealers, or agents incident to the offering of the Shares covered by this prospectus, or any legal fees incurred by any Selling Stockholders relating to this offering.

prospectus.

           *     1,666,667 shares issuable upon the conversion of our Series 17 Preferred;

           *      250,000 shares issued or issuable in payment of accrued dividends on the Series 17 Preferred;

           *      1,281,731 shares issuable upon the exercise of the Note Warrants;

           *      1,999,437 shares issued pursuant to the Exchange Agreement;

           *      1,839,405 shares issuable upon the exercise of the Exchange Warrant;

           *      625,000 shares issuable upon the exercise of the Capital Exchange Warrant;

           *      4,397,566 shares issued pursuant to our Private Placement;

           *      4,397,566 shares issuable upon the exercise of the Unit Warrants;

           *      123,750 shares issuable upon the exercise of the Placement Agent Warrants;

           *      817,142 shares issuable upon the exercise of the BHC Warrants;

           *      1,020,000 shares issuable upon the exercise of the Capital Warrants (described below);

           *     610,000 shares issuable upon the exercise of the National Warrants (described below); and

           *      2,591,458 shares issuable upon the exercise of the Consultant Warrants (described below).

All of the foregoing shares of common stock and warrants are previously described under "RECENT DEVELOPMENTS," except the Capital Warrants, the National Warrants, and the Consultant Warrants, which are described below.

Capital Warrants

           In connection with the $3 Million Loan and a separate loan from Capital Bank to us for $750,000, dated July 12, 2000 (the "$750,000 Loan"), we issued to Capital Bank three-year warrants for the right to purchase an aggregate 300,000 shares of our common stock. Pursuant to an amendment to both the $3 million Loan and the $750,000 Loan, we issued additional three year warrants for the right to purchase up to an aggregate 720,000 shares of common stock. These warrants include the following (collectively, the "Capital Warrants"):

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           *    a warrant, dated August 29, 2000, for the purchase of up to 150,000 shares at an exercise price of 
                  $1.50;

           *    a warrant, dated October 30, 2000, for the purchase of up to 150,000 shares at an exercise price 
                 of $1.625;

           *    a warrant, dated November 29, 2000, for the purchase of up to 300,000 shares at an exercise price 
                 of $1.875;

           *    a warrant, dated December 29, 2000, for the purchase of up to 105,000 shares at an exercise price of 
                 $1.4219;

          *     a warrant, dated February 28,2001, for the purchase of up to 105,000 shares at an exercise price of 
                 $1.9375; and

          *     a warrant, dated March 30, 2001, for the purchase of up to 105,000 shares at an exercise price of 
                 $1.8125.

          The terms of the Capital Warrants provide that the holder may exercise a Capital Warrant without paying the exercise price in cash. Upon a cashless exercise, the holder will receive the number of shares equal to the product of (a) the number of warrant shares as to which the warrant is being exercised, multiplied by (b) a fraction, the numerator of which is the market price of our common stock minus the exercise price, and the denominator is the market price.

          If we declare and pay a dividend in common stock or if the outstanding shares of common stock are subdivided, combined or consolidated then the number of shares issuable upon the exercise of the Capital Warrant or the exercise price will be proportionately increased or decreased, as appropriate.  Further, if we merge or consolidate with another entity and were are not the surviving entity, or if we sell or convey all or substantially all of our property, the holder of a Capital Warrant may receive, upon its exercise, the kind and number of shares of common stock or of our other securities which the holder would have owned or been entitled to receive had the Capital Warrant been exercised in advance of such transaction.

Consulting and Advisory Agreement: National Warrants

           On December 5, 2000, we entered into a financial advisory and consulting agreement (the "Advisory and Consulting Agreement") with National Securities Corporation ("National"). Pursuant to the terms of the Advisory and Consulting Agreement, National performed various financial advisory services for the Company, including disseminating information to the investment community at large; advising the Company about its financial structure as it relates to the public market for its securities; and advising us as to the timing and structure of any future public or private offerings of equity securities. Pursuant to the terms of the Advisory and Consulting Agreement, we issued to National two warrants (collectively, the "National Warrants"), consisting of (a) a warrant, dated June 1, 2001, for the purchase of up to 250,000 shares of common stock and exercisable for a period of five years at an exercise price of $1.50 per share, and (b) a warrant, dated June 1, 2001, for the purchase of up to 360,000 shares of common stock and exercisable for a period of five years at an exercise price of $1.75 per share.

          The terms of the National Warrants provide that the holder has certain piggyback registration rights and that the holder may exercise a National Warrant without paying the exercise price in cash. Upon a cashless exercise, the holder will receive the number of shares equal to the product of (a) the number of shares of common stock as to which the National

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Warrant is being exercised, multiplied by (b) a fraction, the numerator of which is the market price of our common stock minus the exercise price, and the denominator is the market price.

          If we declare and pay a dividend in common stock into a greater number of shares, or if the outstanding shares of common stock are subdivided, combined or consolidated, then the number of shares issuable upon the exercise of the National Warrant or the exercise price will be proportionately increased or decreased, as appropriate.

          If we merge or consolidate with another entity and we are not the surviving entity, or if we sell or convey all or substantially all of our property, the holder of a National Warrant may receive, upon its exercise, the kind and number of shares of common stock or of our other securities which the holder would have owned or been entitled to receive had the National Warrant been exercised in advance of such transaction.

Consultant Warrants

         We have issued an aggregate of 2,591,458 warrants to purchase common stock (collectively, the "Consultant Warrants") in connection with retaining and compensating Larkspur Capital Corporation ("Larkspur"), Ryan, Beck & Co., LLC ("Ryan, Beck"), and Strategic Growth International, Inc. ("Strategic") for consulting and advisory services rendered to us. These consulting services related to the negotiation and completion of our $22 million credit facility, the BHC Loan, and the Purchase Agreement covering our Subordinated Notes.  A portion of the Consultant Warrants issued to Larkspur and Ryan Beck were assigned by Larkspur and Ryan Beck to certain officers and/or managing partners of Larkspur and Ryan Beck or trusts controlled by such officer or managing partner.  Except as noted below, each of these warrants are for a term of five years with an exercise price of $1.44 per share.

         In connection with retaining the services of Larkspur, Ryan, Beck, and Strategic, we issued warrants to purchase an aggregate of 630,000 shares of common stock, consisting of (a) warrants issued to each of Larkspur and Ryan, Beck, dated January 25, 2000, for the purchase of up to 75,000 shares and (b) warrants issued to Strategic, dated April 1, 2001, for the purchase of up to 480,000 shares. The warrants granted to Strategic have an exercise price of $1.20 per share as to 240,000 shares and $1.40 per share as to 240,000 shares.

         In connection with the negotiation and completion of our $22 million credit facility, we issued warrants for the purchase of an aggregate of 1,283,332 shares of common stock, consisting of (a) warrants issued to each of Larkspur and Ryan, Beck, dated December 22, 2000, for the purchase of up to 534,722 shares, and (b) warrants issued to Strategic, dated December 22, 2000, for the purchase of up to 213,888 shares.

         In connection with the negotiation and completion of the BHC Loan, we issued warrants for the purchase of an aggregate of 349,999 shares of common stock, consisting of (a) warrants issued to each of Larkspur and Ryan, Beck, dated January 31, 2001, for the purchase of up to 85,069 shares, (b) warrants issued to Strategic dated February 1, 2001, for the purchase of up to 34,028 shares, (c) warrants issued to each of Larkspur and Ryan, Beck, dated March 9, 2001, for the purchase of up to 60,764 shares, and (d) warrants issued to Strategic, dated March 9, 2001, for the purchase of up to 24,305 shares.

         In connection with the negotiation and completion of the Purchase Agreement and our Subordinated Notes, we issued warrants for the purchases of up to an aggregate of 328,127 shares of common stock consisting of (a) warrants issued to each of Larkspur and Ryan Beck, dated July 31, 2001, for the purchase of up to 136,720 shares, and (b) warrants issued to Strategic, dated July 31, 2001, for the purchase of up to 54,687 shares.

          The terms of the Consultant Warrants provide that the holder may exercise a Consultant Warrant without paying the exercise price in cash. Upon a cashless exercise, the holder will receive the number of shares equal to the product of (a) the number of warrant shares as to which the warrant is being exercised, multiplied by (b) a fraction, the numerator of which is the market price of our common stock minus the exercise price, and the denominator is the market price.

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         The exercise price or number of shares issuable upon exercise of the Consultant Warrants may be proportionately increased or decreased, as appropriate, if we subdivide or combine our common stock, or pay a dividend in common stock.  When the exercise price is adjusted, the number of shares issuable upon exercise will also be adjusted multiplying a number equal to the exercise price in effect immediately prior to such adjustment by the number of shares issuable upon exercise of the Consultant Warrants immediately prior to such adjustment and dividing the product by the adjusted exercise price.

           The following table sets forth as to each Selling Stockholder: (a) the name of each Selling Stockholder, (b) the amount of shares beneficially owned as of the date of this prospectus, (c) the number of shares of common stock owned by each Selling Stockholder which are included under this prospectus, (d) the number of shares beneficially owned after the offering, assuming that all shares of common stock being offered hereby are sold and that such are outstanding, and (e) the percentage of common stock beneficially owned after completion of the offering. Unless otherwise noted, each Selling Stockholder has sole voting and investment power over the shares of common stock listed as beneficially owned by the Selling Stockholder.

           The common stock being offered includes shares of common stock which may be acquired upon: (a) the exercise of outstanding warrants, whether such are currently exercisable, and/or (b) conversion of outstanding shares of preferred stock, whether or not such are currently convertible.

           The percentage of common stock beneficially owned after completion of this offering assumes: (a) all shares of common stock covered by this prospectus are sold, (b) the Selling Stockholder does not acquire beneficial ownership of additional shares of common stock after the date of this prospectus, and (c) we do not issue any additional shares of common stock after the date of this prospectus, except the shares of common stock which a person has the right to acquire upon the exercise of warrants and conversion of preferred stock outstanding as of the date of this prospectus, but such shares are not determined to be outstanding for the purpose of computing the percentage ownership of any other person. The amounts indicated are based on outstanding common stock of 33,763,177 shares as of September 21, 2001.

___________________

*    Less than 1%.

⁺     Assumes that our stockholders approve the issuance of shares of common stock upon the exercise of the Unit
       Warrants and the Placement Agent Warrants. See "RECENT DEVELOPMENTS - Private Placement: Unit 
       Warrants and Placement Agent Warrants."

⁽¹⁾   Includes 712,073 shares issuable upon the exercise of warrants.

⁽²⁾   Includes 143,000 shares issuable upon the exercise of Unit Warrants.

⁽³⁾   Includes 817,142 shares issuable upon the exercise of warrants.

⁽⁴⁾   Includes 569,658 shares issuable upon the exercise of warrants.

⁽⁵⁾   Includes (a) 9,972,914 shares that Capital Bank owns of record; (b) 1,666,667 shares issuable upon conversion 
       of  2,500 shares of Series 17 Preferred; (c) 842,995 shares issuable upon exercise of the Unit Warrants; 
       (d) 4,465,655 shares issuable upon exercise of other warrants held by Capital Bank; and (e) 250,000 shares 
       that Capital Bank may receive in payment of accrued dividends on the Series 17 Preferred (of which 12,501 
       shares have been previously issued). Our Registration Statement on Form S-3, No. 333-14513, effective 
       October 21, 1996, and our Registration Statement on Form S-3, No. 333-87437, effective September 20, 
       1999, currently cover the reoffer and resale of up to 8,724,231of the 17,185,730 shares noted as beneficially 
       owned by Capital Bank. Capital Bank has informed us that it is a banking institution regulated by the 
       banking regulations of Austria which holds our securities on behalf of numerous clients, and that the 
       clients (and not Capital Bank) maintain full voting and dispositive power over such shares. Consequently, 
       Capital Bank advised us that it believes it is not the beneficial owner, as such term is defined in Rule 13d-3 
       under the Exchange Act, of our securities registered in the name of Capital Bank because it has neither 
       voting nor investment power, as such terms are defined in Rule 13d-3, over such securities. As a result, 
       Capital Bank may share voting and investment power with its investors. Capital Bank has informed us 
       that it does not believe that it is required to file reports under Section 16(a),  Schedule 13D, or Schedule 
       13G in connection with the shares of our common stock registered in the name of Capital Bank.  See 
       "POTENTIAL CHANGE IN CONTROL" for a discussion of Capital Bank's holdings of our securities.

⁽⁶⁾    Includes 85,715 shares issuable upon the exercise of Unit Warrants.

⁽⁷⁾    Includes 85,715 shares issuable upon the exercise of Unit Warrants.

⁽⁸⁾    Includes 200,000 shares issuable upon the exercise of Unit Warrants.

⁽⁹⁾    Includes 282,146 shares issuable upon the exercise of warrants.

⁽¹⁰⁾  Includes 57,143 shares issuable upon the exercise of Unit Warrants.

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⁽¹¹⁾  Includes 250,000 shares issuable upon the exercise of Unit Warrants and 100,000 owned of record by 
         D.W. Investments, Inc. of which Mr. Ellis is the sole stockholder.

⁽¹²⁾  Includes 571,428 shares issuable upon the exercise of Unit Warrants.

⁽¹³⁾  Includes 28,571 shares issuable upon the exercise of Unit Warrants.

⁽¹⁴⁾  Includes 3,000 shares issuable upon the exercise of warrants.

⁽¹⁵⁾  Includes 3,000 shares issuable upon the exercise of warrants.

⁽¹⁶⁾  Includes 276,146 shares issuable upon the exercise of warrants.

⁽¹⁷⁾  Includes 285,715 shares issuable upon the exercise of Unit Warrants.

⁽¹⁸⁾  Includes 15,750 shares issuable upon the exercise of Placement Agent Warrants.

⁽¹⁹⁾  Includes 245,375 shares issuable upon the exercise of warrants.

⁽²⁰⁾  Includes 40,000 shares issuable upon the exercise of Unit Warrants.

⁽²¹⁾  Includes 60,000 shares issuable upon the exercise of Unit Warrants.

⁽²²⁾  Includes 571,429 shares issuable upon the exercise of Unit Warrants. Mr. Lahav was appointed as a member 
        of the Board on September 20, 2001. See "RECENT DEVELOPMENTS - Appointment of New Director."

⁽²³⁾  Includes 28,571 shares issuable upon the exercise of Unit Warrants.

⁽²⁴⁾  Includes 28,571 shares issuable upon the exercise of Unit Warrants.

⁽²⁵⁾  Includes 34,000 shares issuable upon the exercise of Placement Agent Warrants.

⁽²⁶⁾  Includes 42,857 shares issuable upon the exercise of Unit Warrants.

⁽²⁷⁾ Includes 228,571 shares issuable upon the exercise of Unit Warrants.

⁽²⁸⁾  Includes 282,146 shares issuable upon the exercise of warrants.

⁽²⁹⁾  Includes 115,000 shares issuable upon the exercise of Unit Warrants.

⁽³⁰⁾  Includes 45,837 shares issuable upon the exercise of warrants.

⁽³¹⁾  Includes 650,000 shares issuable upon the exercise of Unit Warrants.

⁽³²⁾  Includes 42,857 shares issuable upon the exercise of Unit Warrants.

⁽³³⁾  Includes 143,000 shares issuable upon the exercise of Unit Warrants.

⁽³⁴⁾  Includes 57,143 shares issuable upon the exercise of Unit Warrants.

⁽³⁵⁾  Includes 225,000 shares issuable upon the exercise of Unit Warrants.

⁽³⁶⁾  Includes 245,375 shares issuable upon the exercise of warrants.

⁽³⁷⁾  Includes 28,571 shares issuable upon the exercise of Unit Warrants.

⁽³⁸⁾  Includes 401,525 shares issuable upon the exercise of warrants and 34,000 shares issuable upon the exercise 
         of Placement Agent Warrants.

⁽³⁹⁾  Includes 85,714 shares issuable upon the exercise of warrants.

⁽⁴⁰⁾  Includes 806,908 shares issuable upon the exercise of warrants.

⁽⁴¹⁾  Includes 625,000 shares issuable upon the exercise of warrants.

⁽⁴²⁾  Includes 150,000 shares issuable upon the exercise of warrants.

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           The Shares may be offered and sold from time to time by the Selling Stockholders, or by pledges, donees, transferees or other successors in interest. The Selling Stockholders will act independently of us in making decisions with respect to the timing, market, or otherwise at prices related to the then current market price or in negotiated transactions. The Shares may be sold by the Selling Stockholders in one or more transactions on the Nasdaq and the BSE or otherwise at market prices then prevailing or in privately negotiated transactions. The Shares may be sold by one or more of the following:

          *    ordinary brokerage transactions and transactions in which the broker solicits purchasers;

          *    purchases and resale by a broker-dealer for its account pursuant to this prospectus; and

          *    a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent but may position 
                and resell a portion of the block as principal to facilitate the transaction.

           We have not been advised by the Selling Stockholders that they have, as of the date hereof, made any arrangements relating to the distribution of the Shares covered by this prospectus, except that certain of the Selling Stockholders are broker-dealers. See "SELLING STOCKHOLDERS." In effecting sales, broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers to participate, and, in such case, broker-dealers will receive commissions or discounts from the Selling Stockholders in amounts to be negotiated immediately prior to sale.

           In offering the Shares, the Selling Stockholders and any broker-dealers and any other participating broker-dealers who execute sales for the Selling Stockholders may be deemed to be "underwriters" within the meaning of the Act in connection with such sales. Accordingly, any profits realized by the Selling Stockholders and the compensation of such broker-dealer may be deemed to be underwriting discounts and commissions. Any Shares covered by this prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this prospectus.

           Certain legal matters in connection with the Common Stock offered hereby will be passed upon for the Company by Conner & Winters, A Professional Corporation, Oklahoma City, Oklahoma ("Conner & Winters"). Irwin H. Steinhorn, a stockholder of Conner & Winters, has an individual retirement account which owns 385 shares of common stock.

           The financial statements and schedulefinancial statement schedules as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2008, incorporated by reference in this prospectusRegistration Statement have been audited byso incorporated in reliance on the reports of BDO Seidman, LLP, an independent certifiedregistered public accountants toaccounting firm (the report on the extent and foreffectiveness of internal control over financial reporting expresses an adverse opinion on the periods set forth in their reporteffectiveness of the Company’s internal control over financial reporting as of December 31, 2008), incorporated herein by reference, and are included herein in reliance upon such report given uponon the authority of said firm as experts in auditing and accounting.

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