Particle Drilling Technologies Inc.

Particle Drilling Technologies Inc., Houston, (Pink Sheets: PDRT) has ceased operations and has formed an executive committee, comprised of two independent directors and one nonindependent director, to explore strategic alternatives. Particle Drilling previously was delisted from Nasdaq after failing to comply with listing requirements. The company had entered an agreement to sell up to $1.2 million in notes on Feb. 11, an LC Capital Master Fund Ltd., a Cayman Islands exempted company and Particle Drilling's largest shareholder (17.5% of shares outstanding), received 6.06 million warrants in the offering The Nasdaq staff determined the transaction did not comply with the rule because the potential issuance of shares upon exercise of the warrants will result in a change of control of the company and, therefore, required shareholder approval. Because LC has the ability to exercise the warrants and beneficially own approximately 29% of the company's common stock, the Nasdaq staff has taken the position that the transaction resulted in a change of control and, therefore, required shareholder approval under the rule. Particle Drilling provides oilfield service and technology.