The accompanying consolidated financial statements for the year ended December 31, 2011, have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As described in Note 2, in February 2012, stockholders representing approximately 54% of the outstanding shares of the Company requested a special stockholders' meeting to consider the following matters:

If these stockholders were successful in electing their own slate of directors, it would result in a change in the majority of the Company's Board. Under the terms of the Company's credit facility with Bank of America, N.A. and KeyBank National Association (the "lenders) (Note 8), a change in the majority of the Board would constitute a change in control and an event of default, which would allow the lenders to cause the debt to be immediately due and payable. Given the Company's cash balance at December 31, 2011 of approximately $0.8 million and estimated 2012 liquidity, the Company would be unable to repay the $24.0 million in debt if it became due in May 2012.

Management has attempted to negotiate with these stockholders to reach an agreement prior to the Company's annual meeting and/or the special meeting demanded by the Kleinheinz Dissident Group, which are currently scheduled to be held in May 2012.

If a change in control were to occur as a result of the above action, the Company's Credit Facility with Bank of America would allow the lenders to make the debt immediately due and payable. This would require the Company to reclassify its debt as a current liability unless a waiver of such covenant violation was obtained. In addition the Company would be required to reassess the recoverability of certain assets, such as intangible assets and deferred tax assets, as well as reassess the appropriate classification and disclosures for other financial statement items. Furthermore, a change in control would cause certain restricted stock grants to vest immediately, which would result in significant compensation expense.

The possibility of a change in the majority representation of the Board, and consequent event of default under the credit facility, which would allow the lenders to cause the debt of $24.0 million to become immediately due and payable, raises substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments, if any, that might result from the outcome of this uncertainty.