TELOS CORP — Major Shareholding Notification 2005

May 6, 2005

SC 13D/A 1 file001.htm SCHEDULE 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 4) Telos Corporation ----------------- (Name of Issuer) 12% Cumulative Exchangeable Redeemable Preferred Stock, Par Value $0.01 Per Share ------------------------------------------------------- (Title of Class of Securities) 87969B200 --------- (CUSIP Number of Class of Securities) Wynnefield Partners Small Cap Value, L.P. 450 Seventh Avenue, Suite 509 New York, New York 10123 Attention: Mr. Nelson Obus -------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: Jeffrey S. Tullman, Esq. Kane Kessler, P.C. 1350 Avenue of the Americas, 26th Floor New York, New York 10019 (212) 541-6222 May 3, 2005 ----------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a Statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ] (continued on following pages) (Page 1 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP No. 87969B200 13D/A Page 2 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Wynnefield Partners Small Cap Value, L.P. S.S. OR I.R.S. IDENTIFICATION No. OF ABOVE PERSON: 13-3688497 ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 131,800 shares (See Item 5) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 131,800 shares (See Item 5) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 131,800 (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.1% (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON PN ---------------------------------------------------------------------------------------------------------------------- (Page 2 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP NO. 87969B200 13D/A Page 3 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Wynnefield Small Cap Value Offshore Fund, Ltd. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Not Applicable ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) | | ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2 (d) OR 2 (e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 85,400 shares (See Item 5) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 85,400 shares (See Item 5) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,400 shares (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.7% (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO ---------------------------------------------------------------------------------------------------------------------- (Page 3 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP NO. 87969B200 13D/A Page 4 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Wynnefield Partners Small Cap Value, L.P. I S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 13-3953291 ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 142,800 shares (See Item 5) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 142,800 shares (See Item 5) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 142,800 shares (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.5% (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON PN ---------------------------------------------------------------------------------------------------------------------- (Page 4 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP No. 87969B200 13D/A Page 5 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Channel Partnership II, L.P. S.S. OR I.R.S. IDENTIFICATION No. OF ABOVE PERSON: 22-3215653 ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS WC (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 13,500 shares (See Item 5) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 13,500 shares (See Item 5) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 13,500 shares (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.4% (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON PN ---------------------------------------------------------------------------------------------------------------------- (Page 5 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP No. 87969B200 13D/A Page 6 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Nelson Obus S.S. OR I.R.S. IDENTIFICATION No. OF ABOVE PERSON: ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES OF AMERICA ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 13,500 shares (See Item 5) (1) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY 360,000 (See Item 5) (1) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 13,500 shares (See Item 5) (1) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER 360,000 (See Item 5) (1) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 373,500 shares (See Item 5)(1) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.7% (See Item 5)(1) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN ---------------------------------------------------------------------------------------------------------------------- (1) Mr. Obus may be deemed to have an indirect beneficial ownership in such shares through his positions as a co-managing member of Wynnefield Capital Management, LLC, a principal executive officer of Wynnefield Capital, Inc., and general partner of Channel Partnership II, L.P. Wynnefield Capital Management, LLC holds an indirect beneficial ownership interest in 274,600 shares which are directly owned by Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I. Wynnefield Capital, Inc. holds an indirect beneficial ownership interest in 85,400 shares which are directly beneficially owned by Wynnefield Small Cap Value Offshore Fund, Ltd. Channel Partnership II, L.P. directly owns 13,500 shares. As Mr. Joshua H. Landes is a co-managing member of Wynnefield Capital Management, LLC and an executive officer of Wynnefield Capital, Inc., Mr. Obus shares voting and dispositive power with Mr. Landes with regard to any shares beneficially owned by Wynnefield Capital Management, LLC and Wynnefield Capital, Inc. ---------------------------------------------------------------------------------------------------------------------- (Page 6 of 11 Pages) -------------------------------------------------------------------------------- CUSIP No. 87969B200 13D/A Page 7 of 11 Pages -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Joshua H. Landes S.S. OR I.R.S. IDENTIFICATION No. OF ABOVE PERSON: -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] -------------------------------------------------------------------------------- 3. SEC USE ONLY -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF (SEE ITEM 3) -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES OF AMERICA -------------------------------------------------------------------------------- NUMBER OF 7. SOLE VOTING POWER SHARES -0- (See Item 5) (1) BENEFICIALLY --------------------------------------------- OWNED BY 8. SHARED VOTING POWER EACH REPORTING 360,000 (See Item 5) (1) PERSON --------------------------------------------- WITH 9. SOLE DISPOSITIVE POWER -0- (See Item 5)(1) --------------------------------------------- 10. SHARED DISPOSITIVE POWER 360,000 (See Item 5) (1) -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 360,000 shares (See Item 5)(1) -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.3% (See Item 5)(1) -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN -------------------------------------------------------------------------------- (1) Mr. Landes may be deemed to have an indirect beneficial ownership in such shares through his positions as a managing member of Wynnefield Capital Management, LLC and an executive officer of Wynnefield Capital, Inc. Wynnefield Capital Management, LLC holds an indirect beneficial ownership interest in 274,600 shares which are directly owned by Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I. Wynnefield Capital, Inc. holds an indirect beneficial ownership interest in 85,400 shares which are directly beneficially owned by Wynnefield Small Cap Value Offshore Fund, Ltd. As Mr. Obus is a co-managing member of Wynnefield Capital Management, LLC and a principal executive officer of Wynnefield Capital, Inc., Mr. Landes shares voting and dispositive power with Mr. Obus with regard to any shares beneficially owned by Wynnefield Capital Management, LLC and Wynnefield Capital, Inc. (Page 7 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP NO. 87969B200 13D/A Page 8 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Wynnefield Capital Management, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 13-4018186 ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION NEW YORK ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 274,600 shares (See Item 5) (1) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 274,600 shares (See Item 5) (1) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 274,600 shares (See Item 5) (1) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.6% (See Item 5) (1) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON OO (Limited Liability Company) ---------------------------------------------------------------------------------------------------------------------- (1) Wynnefield Capital Management, LLC, as the general partner of Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I, holds an indirect beneficial interest in these shares which are directly beneficially owned by Wynnefield Partners Small Cap Value, L.P. and Wynnefield Partners Small Cap Value, L.P. I. ---------------------------------------------------------------------------------------------------------------------- (Page 8 of 11 Pages) ---------------------------------------------------------------------------------------------------------------------- CUSIP NO. 87969B200 13D/A Page 9 of 11 Pages ---------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON: Wynnefield Capital, Inc. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: N/A ---------------------------------------------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] ---------------------------------------------------------------------------------------------------------------------- 3. SEC USE ONLY ---------------------------------------------------------------------------------------------------------------------- 4. SOURCE OF FUNDS AF (SEE ITEM 3) ---------------------------------------------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] ---------------------------------------------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION CAYMAN ISLANDS ---------------------------------------------------------------------------------------------------------------------- 7. SOLE VOTING POWER 85,400 shares (See Item 5)(1) NUMBER OF ----------------------------------------------------------------------------- SHARES 8. SHARED VOTING POWER BENEFICIALLY -0- (See Item 5) OWNED BY ----------------------------------------------------------------------------- EACH REPORTING 9. SOLE DISPOSITIVE POWER PERSON 85,400 shares (See Item 5)(1) WITH ----------------------------------------------------------------------------- 10. SHARED DISPOSITIVE POWER -0- (See Item 5) ---------------------------------------------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 85,400 shares (See Item 5)(1) ---------------------------------------------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] ---------------------------------------------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 2.7% (See Item 5)(1) ---------------------------------------------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON CO ---------------------------------------------------------------------------------------------------------------------- (1) Wynnefield Capital, Inc. as the sole investment manager of Wynnefield Small Cap Value Offshore Fund, Ltd., holds an indirect beneficial interest in these shares which are directly beneficially owned by Wynnefield Small Cap Value Offshore Fund, Ltd. ---------------------------------------------------------------------------------------------------------------------- (Page 9 of 11 Pages) This Amendment No. 4 (the "Amendment") amends the Statement of Beneficial Ownership on Schedule 13D, filed with the Securities and Exchange Commission (the "Commission") on April 1, 2005 (the "Amended and Restated Schedule 13D"), which amended and restated the previous Statements of Beneficial Ownership on Schedule 13D filed by Wynnefield Partners Small Cap Value, L.P. (the "Partnership"), Wynnefield Small Cap Value Offshore Fund, Ltd. (the "Fund"), Wynnefield Partners Small Cap Value, L.P. I (the "Partnership-I") and Channel Partnership II, L.P. ("Channel" and, collectively with the Partnership, the Fund, the Partnership-I and Channel, the "Original Reporting Persons"), with respect to the shares of 12% Cumulative Exchangeable Redeemable Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of Telos Corporation, a Maryland corporation with its principal executive offices located at 19886 Ashburn Road, Ashburn, Virginia 20147-2358 (the "Issuer"). In addition to the Original Reporting Persons, this Amendment is filed by and on behalf of Wynnefield Capital Management, LLC ("WCM"), Wynnefield Capital, Inc., Nelson Obus ("Mr. Obus") and Joshua H. Landes. The information contained in this Amendment is as of the date hereof, unless otherwise expressly provided herein. ITEM 4. PURPOSE OF TRANSACTION. Item 4. Purpose of Transaction appearing in the Amended and Restated Schedule 13D is supplemented by adding the following disclosure to the end of such item: On May 3, 2005, Mr. Obus of WCM sent a letter to the Committee of Independent Directors of the Board of Directors of the Issuer jointly with other holders of the Preferred Stock. A copy of the letter is filed as Exhibit 99.1 hereto and is incorporated herein by reference. The letter urges the Committee of Independent Directors to consider a strategic transaction such as, but not limited to, a public equity offering or a merger transaction so that the Issuer may recognize its unrealized enterprise value and raise sufficient legally available funds to fulfill its contractual obligations to redeem the Preferred Stock on November 21, 2005. The signatories to the letter included four other holders of the Preferred Stock. The signatories to the letter expressly state that they are not acting together for purposes of acquiring, holding, voting or disposing of any equity security of the Issuer, and they expressly deny that they constitute a group within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following exhibit is filed as part of this Amendment: Exhibit 99.1 Letter dated May 3, 2005 to the Committee of Independent Directors of the Board of Directors of the Issuer (Page 10 of 11 Pages) SIGNATURE After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this Amendment is true, complete and correct. Dated: May 6, 2005 WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. By: Wynnefield Capital Management, LLC, its General Partner By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I By: Wynnefield Capital Management, LLC, its General Partner By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD. By: Wynnefield Capital, Inc., its Investment Manager By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, President WYNNEFIELD CAPITAL MANAGEMENT, LLC By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD CAPITAL, INC. By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, President CHANNEL PARTNERSHIP II, L.P. By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, General Partner /s/ Nelson Obus ---------------------------------------------- Nelson Obus, Individually /s/ Joshua H. Landes ---------------------------------------------- Joshua H. Landes, Individually (Page 11 of 11 Pages) EXHIBIT INDEX Exhibit 99.1 Letter dated May 3, 2005 to the Committee of Independent Directors of the Board of Directors of the Issuer