At a meeting which took place on December 7, 2006, our board of directors appointed Zirk Engelbrecht as Chief Executive Officer on an interim basis. Mr. Engelbrecht currently serves as Chairman of the Board of Directors. There are no compensation arrangements or employment agreements between us and Mr. Engelbrecht at this time.

In our Quarterly Report on Form 10-QSB for the period ended September 30, 2006, filed on November 16, 2006, we stated the following:

“We anticipate that the proceeds from the Secured Note Financing transaction, together with cash flows from operations will be sufficient to meet our anticipated expenditures into calendar year 2007. However, if we fail to reach our operating goals, or if we incur unanticipated expenses, we may require additional capital to support our continued operations. We would plan to raise any additional capital from the sale of debt or equity securities. There are no commitments or arrangements for other offerings in place. Furthermore, the terms and conditions of the Secured Note Financing transaction place substantial restrictions on our ability to raise additional capital. There is no assurance that we will be able to raise additional funds, and if we are unsuccessful, we will be forced to curtail operations or possibly be forced to evaluate a sale or liquidation of the Company’s assets. Even if we are successful in raising additional funds, there is no assurance regarding the terms of any additional investment. Any future financing may involve substantial dilution to existing shareholders. “

At this time, cash flows from operations have not met our goals and we anticipate that our existing cash reserves will be sufficient to fund our operations only into the first quarter of 2007. We have taken steps to reduce our ongoing operating expenses, including the reduction of non-essential payments and reducing our personnel to approximately 17 full time equivalents. We will continue to evaluate additional reductions in operating expenses. We are also evaluating options for raising additional capital through the sale of debt or equity financing. However, there are no commitments or arrangements for other offerings in place at this time. In addition, we are evaluating all alternatives at this time, including investigation of potential strategic transactions.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.