On
January 26, 2007, we entered into an amended and restated Agreement and
Plan of Merger with
Hythiam, Inc. and HCCC Acquisition Corporation, a newly formed wholly owned subsidiary of Hythiam.
The amended agreement, a copy of which is attached as
Exhibit 2.1 and incorporated herein by
reference, (a) supersedes the conditional merger agreement we entered into with Hythiam on
January
18, 2007 as disclosed in our current report on Form 8-K filed that date, (b) amends section
5(c)(ii) to provide for a proxy statement and a special meeting of our stockholders to vote on
whether to approve the merger, (c) adds a new section 2(d)(vi) providing for the treatment of our
stock options and warrants, (d) deletes former sections 6(a)(x) and 6(b)(viii) and eliminates the
requirement for any further board ratification of the agreement or the merger, and (e) makes other
conforming changes.
The merger
agreement provides that 1.0 share of Hythiam common stock will
be issued in exchange for each 12.0 shares of our common stock.
The ratio is fixed and will not fluctuate based on either
company’s future trading price.