3. The Proposed Transaction

Lightyear and Wherify entered into an Agreement and Plan of Merger on August 12, 2008, whereby Merger Sub will merge with Holdings, with Holdings surviving. As a result, Holdings will be a direct, wholly-owned subsidiary of Wherify, and Lightyear will be an indirect subsidiary of Wherify. Applicants expect that following the transaction Holdings' current owners will hold on a fully diluted basis approximately 51% combined interest in Wherify. They will also have the power to appoint five members of its Board of Directors - a majority of the seven-person Board. In addition to Wherify's public shareholders, there will be some additional investors in the combined company at closing as a result of certain financing transactions, but Applicants do not anticipate that any such new investor will hold an attributable interest in more than 10% of the shares of Wherify. Applicants therefore request authority for the indirect transfer of control of Lightyear to Wherify. Applicants provided pre- and post-transaction illustrative organization charts for the combined California operating companies (Exhibit A).

Applicants state that immediately following the consummation of the proposed transaction, Lightyear will continue to offer service with no change in the name of the company, or its rates or terms and conditions of service.¹ According to Applicants, the transfer of indirect control of Lightyear to Wherify will be seamless and virtually transparent to consumers in the State.

¹ Applicants anticipate changing the name of Wherify to Lightyear Network Solutions, Inc., as soon as possible after closing.