SWWI Simon Worldwide Inc (GM)

Explanatory Note to Use of Proceeds Table

If the rights offering is consummated, but the participation rate in the offering is less than 75% of the total offering amount, then it is likely that, without additional financing, we will not have sufficient funds to make our final $3.5 million scheduled capital contribution to Three Lions, pay for our offering expenses and have sufficient funds remaining to fund our near-term operating expenses. In such event, we will seek to secure alternative financing on acceptable terms, but if we are unable to do so, we anticipate that we will elect not to make our final $3.5 million capital contribution and instead, in accordance with the provisions of the Three Lions LLC Agreement, OA3 will be obligated to make such capital contribution and our economic interest in Three Lions will be diluted proportionately as discussed in more detail below under Recent Developments – Three Lions Investment . We also may seek to renegotiate the terms or timing of our final capital contribution to Three Lions, such as by splitting the final capital contribution with OA3 or to provide us with more time to make such contribution, but there can be no assurance that we would succeed in doing so or that the other members of Three Lions would agree to such a renegotiation.

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BUSINESS

Simon Worldwide, Inc.

We are a Delaware corporation founded in 1976 and, prior to August 2001, we had been operating as a multi-national full-service promotional marketing company, specializing in the design and development of high-impact promotional products and sales promotions. The major client of the Company had been McDonald’s Corporation, for which our Simon Marketing subsidiary designed and implemented marketing promotions, which included premiums, games, sweepstakes, events, contests, coupon offers, sports marketing, licensing, and promotional retail items. Net sales to McDonald’s and Philip Morris, another significant former client, accounted for 78% and 8%, respectively, of total net sales in 2001.

On August 21, 2001, we were notified by McDonald’s that it was terminating its approximately 25-year relationship with Simon Marketing as a result of the arrest of Jerome P. Jacobson, a former employee of Simon Marketing who subsequently pled guilty to embezzling winning game pieces from McDonald’s promotional games administered by Simon Marketing. None of our other employees was found to have any knowledge of or complicity in his illegal scheme. Simon Marketing was identified in the criminal indictment of Mr. Jacobson, along with McDonald’s, as an innocent victim of Mr. Jacobson’s fraudulent scheme. Further, on August 23, 2001, we were notified that our second largest customer, Philip Morris, was also ending its approximately nine-year relationship with us. As a result of the above events, we no longer have an ongoing promotions business.

Following the loss of our two major clients, we concentrated our efforts on reducing costs and settling numerous claims, contractual obligations, and pending litigation. By April 2002, we had effectively eliminated a majority of our ongoing promotions business operations and were in the process of disposing of our assets and settling our liabilities related to the promotions business and defending and pursuing litigation with respect thereto. In essence, we discontinued our promotions business and changed the nature of our operation to focus on pending litigation and winding down our contracted obligations. As a result of these efforts, we were able to resolve a significant number of outstanding liabilities that existed in August 2001 or arose subsequent to that date. As of December 31, 2012, we had reduced our workforce to 4 employees (2 of whom are full-time employees) from 136 employees as of December 31, 2001.

In October 2010, we settled the remaining liability in our discontinued promotions business which was a post-employment obligation. With no revenues from operations, we closely monitor and control our expenditures within a reasonably predictable range. By utilizing cash which had been received pursuant to the settlement of our litigation with McDonald’s in 2004, $2.1 million received from Yucaipa AEC Associates, LLC in July 2008 and March 2009, and $1.75 million received in August 2008 in settlement of our lawsuit against PricewaterhouseCoopers LLC, management believes we have sufficient capital resources and liquidity to continue to operate for at least one year.

We are currently managed by a Chief Executive Officer (Greg Mays), a Chief Financial Officer and Controller (Anthony Espiritu), and a Secretary and Acting General Counsel (Terrence Wallock). The Board of Directors has considered various alternative courses of action for our company, including possibly acquiring or combining with one or more operating businesses. The Board of Directors has reviewed and analyzed a number of proposed transactions.

On June 11, 2008, we entered into an Exchange and Recapitalization Agreement, or Recapitalization Agreement, with Overseas Toys, the then holder of all our outstanding shares of preferred stock, pursuant to which all the outstanding preferred stock would be converted into shares of common stock representing 70% of the shares of common stock outstanding immediately following the conversion. Subsequently, Overseas Toys’ holding of common stock increased to 82.5% due to: i) the reduction in outstanding shares of common stock in connection with our April 26, 2010, purchase of 3,589,201 shares from Everest Special Situations Fund L.P. and ii) the December 10, 2010, purchase of 3,822,912 shares by Overseas Toys in connection with its tender offer to purchase shares of our common stock it did not already own (further described below). The Recapitalization

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Agreement was negotiated on our behalf by a special committee of disinterested directors which, based in part upon the opinion of the Special Committee’s financial advisor, determined that the transaction was fair to the holders of common stock from a financial point of view. At a special meeting held on September 18, 2008, our stockholders approved amendments to our certificate of incorporation proposed in order to effect a recapitalization of the Company pursuant to the terms of the Recapitalization Agreement.

Under the Recapitalization Agreement, we issued 37,940,756 shares of common stock with a fair value of $15.2 million in exchange for 34,717 shares of preferred stock (representing all outstanding preferred shares) with a carrying value of $34.7 million and related accrued dividends of approximately $147,000. We recorded $19.7 million to retained earnings in September 2008 representing the excess of carrying value of the preferred stock received over the fair market value of the common shares issued as such difference essentially represented a return to us.

In 2010, Overseas Toys completed a tender offer for all of our common shares that it did not already own. As a result of the 2010 tender offer, our officers were not required to dissolve and liquidate Simon Worldwide as would have been required under the Recapitalization Agreement if such tender offer had not been consummated.

As discussed in more detail below under Recent Developments , our current business plans and activities are focused on actively managing our investment in and the operations of our majority-owned subsidiary, Three Lions Entertainment, LLC, or Three Lions, by way of our participation on Three Lions’ Executive Board, which is responsible for managing and directing the business and affairs of Three Lions, as well as our provision of administrative and accounting support services to Three Lions and another company controlled by Yucaipa. We do not currently plan to enter into or invest in any other activities or businesses other than Three Lions. We intend to use the proceeds of the rights offering and our available cash to make our final scheduled $3.5 million capital contributions to Three Lions, to pay the costs and expenses of the rights offering (which we currently estimate will total approximately $660,683), and to apply any remaining proceeds to help fund our working capital requirements, including employee salaries, office rent, insurance premiums, legal and accounting fees and expenses, and other costs associated with our public reporting obligations.

At June 30, 2013, we had consolidated total assets of $ 6.3 million, total current liabilities of $0.1 million, and total shareholders’ equity of $ 6.2 million. The Company had a net deferred tax asset totaling $32.0 million at June 30, 2013, primarily as a result of prior net operating losses which are available to the Company to offset future taxable income, if any. The Company, however, has considered current results of operations and concluded that it was more likely than not that the deferred tax assets would not be realizable. As a result, the Company had determined in accordance with generally accepted accounting principles that a valuation allowance of the entire net amount of the deferred tax assets was required at June 30, 2013. The Company completed a review of any potential limitation on the use of its net operating losses under Section 382 of the Internal Revenue Code on August 9, 2008, and an update to this review on June 7, 2013. Based on such reviews, the Company does not believe Section 382 of the Internal Revenue Code will adversely impact its ability to use its current net operating losses to offset future taxable income, if any, including any income from Three Lions.

Cash used in operating activities was $1.5 million and $1.9 million for the years ended December 31, 2012 and 2011, respectively. Net cash used in operating activities during the six months ended June 30, 2013, totaled $0.7 million primarily due to a loss from continuing operations of $1.4 million and an increase in restricted cash of $0.2 million, which were partially offset by the Company’s investment loss in Three Lions of $0.9 million. Net cash used in operating activities during the six months ended June 30, 2012, totaled $0.8 million primarily due to a loss from continuing operations of $0.8 million. Net cash used in investing activities during the six months ended June 30, 2013, totaled $5.0 million due to the Company’s payments for acquiring membership units in Three Lions. There were no investing activities during the six months ended June 30, 2012.

We incurred losses in 2012 and continue to incur losses in 2013 for the general and administrative expenses incurred to manage our affairs.

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Recent Developments

Three Lions Investment

On March 22, 2013, we announced in a current report on Form 8-K that we, together with Richard Beckman, Joel Katz and OA3, LLC, had entered into the limited liability company agreement, or LLC Agreement, of Three Lions, on March 18, 2013. Pursuant to the LLC Agreement, we made an initial capital contribution of $3,150,000 to acquire 600,000 investor membership units, or investor units, representing 60% of the voting power of Three Lions, subject to certain major decisions that require the unanimous approval of either the members of Three Lions or its Executive Board as described in more detail below. The other two initial members of Three Lions, Richard Beckman and Joel Katz, were granted a total of 35,294 investor units in respect of their combined initial capital contributions of $185,294, and a total of 364,706 common units in respect of their establishment of and contributions of property to Three Lions, which investor units and common units represent 40% of the voting power of Three Lions, subject to such unanimous approval provisions.

The 600,000 investor units we acquired in respect of our initial capital contribution currently represent a 60% interest in the economic returns of Three Lions, including the right to receive along with the other holders of investor units, in preference over holders of common units, certain priority distributions of 100% of available proceeds of any sale or liquidation transactions and not less than 75% of available cash from operations, in each case as determined by the Executive Board, until such time as the respective capital contributions made by us and the other members holding investor units have been recouped in full, at which time the holders of common units would be entitled to receive certain catch-up distributions thereafter until aggregate distributions made match the respective pro rata 63.5%/36.5% percentage interest split between the investor units and the common units. An employee incentive equity pool of non-voting units representing approximately 10% of the fully diluted economic interests of Three Lions has also been established in the LLC Agreement, however none of these non-voting units are currently outstanding. Any issuance of such incentive units or other economic participation rights to Three Lions employees could result in a proportionate dilutive reduction in our 60% interest in the economic returns of Three Lions of up to 6% in the aggregate, after the return of our aggregate capital contributions to Three Lions.

Pursuant to the LLC Agreement, we made a second capital contribution to Three Lions in the amount of $ 1,850,000, and Messrs. Beckman and Katz made additional capital contributions to Three Lions totaling $108,824, in April 2013. We have the option, but are not required, to make a third and final capital contribution to Three Lions of $ 3,500,000, and Messrs. Beckman and Katz are required to make final capital contributions to Three Lions totaling $205,882. We intend to make this $3,500,000 capital contribution to Three Lions following the closing of the rights offering provided that it successfully closes. If we do not make this third capital contribution, OA3, an affiliate of our controlling shareholder Overseas Toys, is obligated to make a capital contribution of $3,500,000 to Three Lions. OA3 is also obligated under the LLC Agreement to make available to Three Lions, upon the request of its chief executive officer, a revolving loan facility in a principal amount not to exceed $6,000,000 on the terms set forth in the LLC Agreement.

If OA3 makes such contribution, it will acquire a proportionate interest in Three Lions of approximately 247,000 investor units and our interest in Three Lions will be reduced by an equivalent number of investor units as are issued to OA3. Notwithstanding any such reduction in investor units held by us, the LLC Agreement provides that for so long as we and OA3 collectively hold at least 51% of the voting membership units in Three Lions (or 510,000 investor units), we alone will control at least 51% of the voting power of the members of Three Lions, subject to certain major decisions that require the unanimous approval of either the members of Three Lions or its Executive Board. Additionally, the LLC Agreement provides that we have the right to appoint three of the five members of the Executive Board of Three Lions. For so long as we and OA3 collectively hold not less than 75% of the membership units collectively held by us and OA3 following the third capital contribution described above, and we hold not less than 75% of the membership units we held following such third capital contribution, we alone shall continue to be entitled to appoint and remove three of the five members of the Executive Board of Three Lions.

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The LLC Agreement provides that the management of Three Lions is vested in the Executive Board, which has the power and authority to manage and direct the business and affairs of Three Lions and full, exclusive and complete control and responsibility for its business activities. The Executive Board acts pursuant to a majority vote of its members, except with respect to certain specified decisions in the LLC Agreement requiring special approval by either all members of the Executive Board or by all members of Three Lions holding investor units or common units. The matters requiring such special approval are:

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The day-to-day management of Three Lions is vested in such executive officers as are designated by the Executive Board from time to time, in each case and at all times under the supervision of the Executive Board. The executive officers have the general powers and duties of management usually vested in the office chief executive officer and chief operating officer of a corporation, and will report to the Executive Board and have such other powers and duties as may be prescribed by the Executive Board or the LLC Agreement. No executive officer may be removed without the prior written consent of the Executive Board. Mr. Beckman serves as the chief executive officer of Three Lions with primary responsibility for day-to-day operations, is the primary liaison to the Executive Board and is responsible for keeping the Executive Board informed as to Three Lions’ status and endeavors including in particular its financial condition and results.

The foregoing description of the LLC Agreement is a summary of all material provisions of the LLC Agreement and is qualified by reference to the text of the LLC Agreement, which has been filed with the SEC and is incorporated by reference as Exhibit 10.33 to the registration statement of which this prospectus is a part.

Prior to the negotiation of the Company’s acquisition of an equity interest in Three Lions, none of the Company, Overseas Toys, OA3 or Ronald Burkle had any pre-existing material relationship with Three Lions, Mr. Beckman or Mr. Katz. On April 12, 2013, following the execution of the LLC Agreement, the Company issued a letter of credit in the amount of $0.2 million and with an expiration date of April 15, 2014, to guarantee payments on an office lease obtained by Three Lions. To our knowledge, the only pre-existing material relationship between Messrs. Beckman and Katz prior to their formation of Three Lions is that Mr. Beckman is a long-standing client of Mr. Katz, who is an entertainment law attorney. OA3 is the managing member of the general partner of Overseas Toys, our controlling shareholder, and Ronald Burkle is the managing member of OA3.

Three Lions’ Business

Three Lions intends to originate, produce and monetize annual television programming for broadcast on network television, exhibition on basic cable and premium subscription services and associated multi-media events, with a particular emphasis on branded entertainment and special events. Branded entertainment is an entertainment-based vehicle that is funded by advertisers and is complementary to a brands marketing strategy.

Three Lions’ strategy is to not rely solely on TV license fees that typically drive the TV production business. Three Lions expects to derive revenue from sponsorships and marketing partnerships related to its programming that are executed across multiple platforms including television, online, events and print. Sponsorship revenues will be paid in accordance with negotiated contracts, with the identities of partners and the terms of sponsorship changing from time to time.

Three Lions initially intends to produce or co-produce revivals of the Fashion Rocks and Movies Rock events which were produced from 2004 to 2008, and Three Lions has secured subsequent to formation of Three Lions certain intellectual property licenses for the “ Fashion Rocks ” and “ Movies Rock ” marks to enable it to produce such events. Three Lions productions will generally be standalone events, and a network may license a specified number of rebroadcasts on the network in the U.S. during a license period. Three Lions is currently in negotiations with a network to enter into a broadcast agreement for its first two television productions using the

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Fashion Rocks and Movies Rock brands, and with an executive producer to enter into a production agreement for such productions, which Three Lions plans to produce in 2014. Remaining distribution rights, including international and/or off-network syndication rights, are generally anticipated to be retained by Three Lions or, in the case of co-productions, shared with the co-producer for U.S. or international markets.

The network license fee for a special event, when applicable, is normally lower than the costs of producing the event; however, Three Lions’ objective is to recoup its costs and earn a profit through sponsorship revenue and international and domestic syndication. Three Lions is currently in the process of negotiating potential sponsorship agreements with several major companies. Three Lions may also distribute syndicated and other programming internationally or enter into agreements for digital streaming of its programming in the U.S. and certain other countries. Three Lions has not yet entered into any of the aforementioned broadcast, production, distribution, sponsorship or digital streaming agreements, or into any of the venue, print partnership or host city agreements that are also under consideration by Three Lions with respect to its planned productions, and there can be no assurance that Three Lions will succeed in its efforts to enter into such agreements.

As of August 19, 2013, Three Lions has thirteen employees, all of whom are full-time employees. In May 2013, Three Lions entered into a lease agreement for approximately 4,000 square feet of office space located at 150 East 52nd Street, Suite 32002, New York, NY 10022. The lease has a term of 5 years and 4 months and a total lease payment obligation of $1.3 million over the course of such term.

At present, Three Lions’ material assets consist of its licenses to the Fashion Rocks and Movies Rock marks and the approximately $3.15 million in cash held by it as of June 30, 2013. Three Lions holds exclusive, royalty-based licenses to use these marks to develop, produce, conduct, broadcast, distribute, promote and otherwise exploit (i) title relevant shows and events which may be broadcast worldwide via television, internet, mobile, digital, or other channels of media or means of communications and (ii) related content or entertainment product and ancillary rights associated therewith. These licenses obligate Three Lions to make royalty payments to the respective licensors based on a percentage (in the low single digits) of the gross receipts and/or gross revenues received by Three Lions in connection with each of these shows and events, which have not yet occurred but which Three Lions expects to commence conducting in 2014. The licenses also obligate Three Lions to make advance payments against these royalty payments for each show or event produced by Three Lions under the licenses, of which a total of $375,000 has been paid to date and a total of $850,000 in milestone advances remain owed for the first Fashion Rocks and Movies Rock shows that Three Lions intends to conduct in 2014, which remaining amount will be paid in partial installments in the months preceding and within two months following the occurrence of these initial two shows. All future Fashion Rocks and Movies Rock shows and events produced by Three Lions require the payment of commensurately determined advance and royalty payments on a per show/event basis. The Fashion Rocks license has an initial 10 year term that is renewable for successive 10 year terms at Three Lions’ option as long as Three Lions is not in breach of the terms of the license and continues to broadcast an approximately annually reoccurring and qualifying similar show during the term. The Movies Rock license has a perpetual term subject to Three Lions’ compliance with the terms and conditions of the license, including that it broadcast its initial show under the license no later than February 28, 2015, thereafter broadcast successive shows under the license within 2 years following the initial broadcast of the immediately preceding show, and make all required payments to the licensor.

Three Lions’ cash on hand is comprised of the approximately $5.29 million in capital contributions made by its members to date, less transaction costs, operating expenses and trademark license royalty advances. Three Lions’ material liabilities consist of the trademark license royalty payments, lease payment obligations and employee overhead costs. Three Lions is currently in the process of negotiating a revolving credit facility of approximately $6 million with a third party lender, but there can be no assurance that Three Lions will be able to secure such a facility.

Competition

Television production and digital and print media are highly competitive businesses. Overall competitive factors in these industries include programming, digital and print content, quality and distribution as well as the

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demographic appeal of the programming and content. Competition for television, online and print distribution, advertising and sponsorship dollars is based primarily on audience size, demographic composition and viewer and online user response to sponsors’ and advertisers’ products and services. Television programming and other content produced by Three Lions will compete directly for viewers, distribution, advertising and sponsorship dollars with other special event and pop culture programming and online content, as well as with general programming and all other competing forms of media.

We believe that Three Lions represents the future of branded entertainment. Based on a distinctive global business model that transcends the classic distributor-funded norm, we anticipate that Three Lions will not only create original world-class branded entertainment events and content platforms, it will also develop and execute sophisticated cross-platform marketing opportunities with highly compelling integrations and activations, at scale. Three Lions plans to apply valuable expertise in the media space necessary to optimize revenues around both original and existing media assets, and to offer cross-platform advertising opportunities within those assets and a full roster of advertising services, including sophisticated integrations and activations.

Three Lions expects to differentiate itself in the market as follows:

We are not currently aware of any identifiable direct competitors to Three Lions within its unique branded entertainment space. Specifically with respect to the television production component of Three Lions’ business, there are competitors who are generally more established in this space than Three Lions, as they have longer operating histories, have produced more events, and may have greater financial resources than Three Lions. We believe that the historical quality and performance of Movies Rock and Fashion Rocks programming, and the experience and track record of Three Lions’ management team, provide a basis on which to negotiate for key time slots on major networks as established shows, in order to create the cornerstone events endemic to the cross-platform content development and promotional opportunities of the business model.

Three Lions expects to focus on a minimum of two events in the first full year of operation (2014), and may add one to two additional events per year by 2016. Show concepts will be annual to build upon relationships and commitments from networks and sponsors.

Three Lions’ Day-to-Day Management Team

The day-to-day operations of Three Lions are managed by the following executive officers, who were appointed by and are subject to the supervision and authority of Three Lions’ Executive Board, and are responsible for ensuring that all orders and resolutions of the Executive Board are carried into effect:

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Controlling Shareholder

As of the date of this prospectus, Overseas Toys beneficially owns 41,763,668 shares of our common stock, which represents approximately 82.5% of the outstanding shares. As a result, Overseas Toys is able to control the election of our directors, determine our corporate and management policies and determine, without the consent of our other stockholders, the outcome of any corporate transaction or other matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions.

Overseas Toys is controlled by The Yucaipa Companies, or Yucaipa. Four of our six directors — Ira Tochner, Bradford Nugent, Greg Mays and Terrence Wallock — are also current or former directors or executive officers of, or advisors to, Yucaipa or certain of its portfolio companies. Yucaipa also has sufficient voting power to amend our organizational documents. So long as Yucaipa continues to own a significant amount of the outstanding shares of our common stock, it will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions.

Available Information

Our principal executive offices are located at 18952 MacArthur Boulevard, Irvine, California 92612, and our telephone number is (949) 251-4660. Our common stock is traded on the over-the-counter market under the symbol “SWWI.”

Additional information about us is included in documents incorporated by reference in this prospectus. See “ INFORMATION INCORPORATED BY REFERENCE .” We currently file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. The SEC also maintains an internet website, at http://www.sec.gov, that contains our filed reports, proxy and information statements and other information that we file electronically with the SEC.

In addition, we make available, without charge, through our website, www.smi-la.com , electronic copies of our filings with the SEC, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to these filings, if any. Information on our website should not be considered a part of this prospectus, and we do not intend to incorporate into this prospectus any information contained in the website.

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TERMS OF THE OFFERING

The Subscription Rights

We are distributing to the record holders of our common stock as of August 6, 2013, non-transferable subscription rights to purchase shares of common stock at a price of $0.21 per share. Each holder of record of our common stock will receive one subscription right for every share of our common stock owned by that holder as of 5:00 p.m., Eastern time, on August 6, 2013. Each subscription right will entitle the holder to purchase 0.471 of a share of our common stock. Each subscription right entitles the holder to a basic subscription right and each holder with an over-subscription privilege. The subscription rights entitle the holders of our common stock to purchase an aggregate of approximately 23,854,680 shares for an aggregate purchase price of approximately $5,009,482.80.

We may cancel the rights offering at any time for any reason before the rights offering expires. If we cancel the rights offering, we will issue a press release notifying stockholders of the cancellation, and the subscription agent will return all subscription payments received to the subscribers promptly, without interest or penalty.

We also reserve the right to amend or modify the terms of the offering for any reason. However, if we elect to make any fundamental change to the terms set forth in this prospectus or to extend the offering period by more than 30 days beyond the scheduled expiration date, we will file a post-effective amendment to the registration statement in which this prospectus is included announcing the cancellation of this offering and instituting a new offering on such revised terms and giving our stockholders the opportunity to subscribe to such new offering. In such event, all subscription payments received by the subscription agent will be returned promptly, without interest or penalty, and at least contemporaneously with our filing of such post-effective amendment. The terms of the rights offering cannot be modified or amended after the expiration date of the rights offering.

Basic Subscription Right . With your basic subscription right, you may purchase 0.471 of a share of common stock per subscription right, subject to delivery of the required documents and payment of the subscription price of $0.21 per whole share, before the rights offering expires. You may exercise all or a portion of your basic subscription right, or you may choose not to exercise any of your subscription rights. If you do not exercise your basic subscription rights in full, you will not be entitled to purchase any shares under your over-subscription privilege.

Fractional shares resulting from the exercise of the basic subscription right will be eliminated by rounding down to the nearest whole share.

For example, if you owned 100 shares of our common stock on the record date, you would have received 100 subscription rights and would have the right to purchase 47 shares of common stock (47.1 rounded down to the nearest whole share) for $0.21 per whole share.

We will deliver certificates representing shares or credit your account at your record holder with shares of our common stock that you purchased with the basic subscription rights as soon as practicable after the rights offering has expired.

Over-subscription Privilege . If you purchase all of the shares of common stock available to you pursuant to your basic subscription right, you may also choose to purchase a portion of any shares of common stock that other stockholders do not purchase by exercising their basic subscription rights. If sufficient shares are available, we will seek to honor the over-subscription requests in full. If over-subscription requests exceed the number of shares of common stock available, however, we will allocate the available shares pro rata among the stockholders exercising the over-subscription privilege in proportion to the number of shares of our common stock each of those stockholders owned on the record date, relative to the number of shares owned on the record date by all stockholders exercising the over-subscription privilege. If this pro rata allocation results in any stockholder receiving a greater number of shares than the stockholder subscribed for pursuant to the exercise of

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the over-subscription privilege, then such stockholder will be allocated only that number of shares for which the stockholder over-subscribed, and the remaining shares will be allocated among all other stockholders exercising the over-subscription privilege on the same pro rata basis described above. The proration process will be repeated until all shares of common stock have been allocated.

To properly exercise your over-subscription privilege, you must deliver the subscription payment related to your over-subscription privilege before the rights offering expires. Because we will not know the total number of unsubscribed shares of common stock before the rights offering expires, if you wish to maximize the number of shares you purchase pursuant to your over-subscription privilege, you will need to deliver payment in an amount equal to the aggregate subscription price for the maximum number of shares that may be available to you (i.e., for the maximum number of shares available to you, assuming you exercise all of your basic subscription right and are allotted the full amount of your over-subscription without reduction).

We can provide no assurances that you will actually be entitled to purchase the number of shares of common stock issuable upon the exercise of your over-subscription privilege in full at the expiration of the rights offering. We will not be able to satisfy any orders for shares pursuant to the over-subscription privilege if all of our stockholders exercise their basic subscription rights in full, and we will only honor an over-subscription privilege to the extent sufficient shares are available following the exercise of subscription rights pursuant to the basic subscription rights.

To the extent the aggregate subscription price of the actual number of unsubscribed shares of common stock available to you pursuant to the over-subscription privilege is less than the amount you actually paid in connection with the exercise of the over-subscription privilege, you will be allocated only the number of unsubscribed shares available to you, and any excess subscription payments will be returned to you promptly, without interest or penalty.

To the extent the amount you actually paid in connection with the exercise of the over-subscription privilege is less than the aggregate subscription price of the maximum number of unsubscribed shares available to you pursuant to the over-subscription privilege, you will be allocated the number of unsubscribed shares for which you actually paid in connection with the over-subscription privilege.

Fractional shares resulting from the exercise of the over-subscription privilege will be eliminated by rounding down to the nearest whole share.

We will deliver certificates representing shares or credit the account of your record holder with shares of our common stock that you purchased with the over-subscription privilege as soon as practicable after the expiration of the rights offering. Shareholders may also obtain information concerning the number of shares constituting their subscription rights entitlement by contacting the information agent for the offering, Georgeson Inc., at (800) 509-0976 or, if you are located outside the U.S., (781) 575-3340 (collect).

Subscription Procedure

The exercise of subscription rights is irrevocable and may not be cancelled or modified. You may exercise your subscription rights as follows:

For Existing Certificated Shareholders

If you wish to exercise your subscription rights in this offering, and hold your shares in certificate form, you must complete the following steps before September 27, 2013:

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The number of basic subscription rights you have received is indicated on the front of the enclosed subscription rights certificate under the heading “ Rights Qty Issued ”. In order to calculate the number of shares you may purchase pursuant to your basic subscription rights, you must multiply the number of basic subscription rights you have received by 0.471, and then round the resulting product down to the nearest whole share, as set forth in Section 1 of the subscription rights certificate. You must also calculate the aggregate price for the number of shares that you elect to purchase pursuant to your basic subscription rights and, if you have exercised your basic subscription rights in full and wish to purchase additional available shares, your over-subscription privilege, by multiplying such number of shares that you elect to purchase by the per share subscription price of $0.21, as set forth in Section 1 of the subscription rights certificate. To exercise your subscription rights, your completed and signed subscription rights certificate and payment must be received by the subscription agent by September 27, 2013, unless such date is extended by us for up to 30 days.

Important: The full subscription price for the shares must be remitted with the subscription rights certificate in order to be valid. Failure to include the full purchase price shall give us the right to reject the subscription. If the subscription agent does not receive your subscription rights certificate and payment in full by 5:00 p.m., Eastern Time, on September 27, 2013, your subscription rights in this offering will be waived, unless such date is extended by us for up to 30 days.

The subscription price will be deemed to have been received by the subscription agent only upon (i) clearance of any uncertified check; (ii) receipt by the subscription agent of any certified check, bank draft or cashier’s check drawn upon a U.S. bank or of any U.S. postal or express money order; or (iii) receipt of collected funds in the offering account designated above. If paying by uncertified personal check, please be aware that funds paid in this manner may take at least five business days to clear. Accordingly, if you wish to pay the subscription price by means of uncertified personal check, we urge you to send in your subscription materials sufficiently in advance of September 27, 2013 to ensure that such payment is received and clears by that date. We also encourage you to consider paying by means of certified or cashier’s check, bank draft, or money order .

For “Street Name” Shareholders

If you do not hold your shares in certificate form, but hold them instead through a custodian bank, broker, dealer or other nominee, then your nominee is the record holder of the shares you own. If you are not contacted by your nominee, you should contact your nominee as soon as possible. Your nominee must exercise the subscription rights on your behalf for the shares of common stock you wish to purchase. You will not receive a subscription rights certificate. Please follow the instructions of your nominee. Your nominee may establish a deadline that may be before the September 27, 2013 expiration date that we have established for the rights offering.

If you have questions as to how to complete the subscription rights certificate, please contact the information agent for the offering, Georgeson Inc., at (800) 509-0976 or, if you are located outside the U.S., (781) 575-3340 (collect).

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