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Item 4 of Schedule 13D is amended by adding the following:

As previously reported by the Company, immediately prior to the Record date set for the Stockholders' Annual Meeting, and without notice to the stockholders until after the Record Date, the Company engaged in two transactions which materially increased the number of shares which could be voted by Company insiders at the 2016 Annual Meeting. In order to fully investigate their unusual transactions, on August 5, 2016, RIVC sent a letter (the "Demand Letter") to the Issuer demanding the inspection of certain books and records of the Issuer pursuant to Section 220 of the Delaware General Corporation Law.

The Demand Letter sets forth RIVC's belief that recent share issuances by the Issuer to certain officers, directors and affiliates of the Issuer's senior lender represent an attempt to further entrench the existing members of the Issuer's board of directors and may constitute a breach of the directors' fiduciary duties under Delaware law absent a "compelling justification" for an apparent manipulation of the stockholder franchise. The Demand Letter refers to the Issuer's recent reporting of its issuance of over 4.2 million shares of Common Stock, or approximately 11.2% of the total then-outstanding shares of Common Stock, to insider officers and directors of the Issuer Lalit Dhadphale, Youssef Bennani, Joseph Savarino, Ned Siegel, and Dan Seliga (collectively, "Directors and Officers") pursuant to a coordinated and concurrent exercise by each Director and Officer of outstanding warrants and options, which resulted in an increase of over 2.2 million shares held by the Directors and Officers.

 

The Demand Letter also describes a second unusual transaction which had the purpose and/or effect of board entrenchment by placing new shares and additional voting power in the hands of a company insider. The Demand Letter describes how the Issuer has previously settled out trade payables for less than full value, and recognized resulting gain in its financial statements and that RIVC is investigating whether through this highly unusual transaction, completely uncoupled from any concurrent balance sheet recapitalization, Dellave Holdings, LLC ("Dellave"), an entity controlled by existing stockholder Tim Reilly, who is also a principal of the Issuer's senior lender Melrose Capital Partners, was granted the opportunity to personally profit at the Issuer's and stockholders' expense by having shares issued to it at full value of the trade payables, yet retaining the benefit of any discounted settlement of the trade payables. The Demand Letter further notes that from the relevant agreement attached to the Form 8-K filed by the Issuer on August 3, 2016, it appears the Issuer has admitted its current liabilities exceed its assets, and RIVC also is investigating whether such transaction impermissibly favors one creditor over other Issuer constituents, including stockholders. RIVC also is investigating whether in addition to having the purpose and/or effect of board entrenchment and manipulation at the shareholders voting rights, the transaction constitutes corporate waste, an impermissible conflict of interest, and/or a breach by all or some of the directors of their fiduciary duty owed to the Issuer and its stockholders. RIVC intends to use the information obtained from this Demand to determine whether to: (1) pursue a direct or stockholder's derivative action in light of the above transactions, (2) pursue an action for disgorgement, (3) seek redress from the Issuer for any harm caused to the Issuer's stockholders.

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.