<table>
<tbody><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">In assessing the realizability of deferred tax assets, management considers, in light of available objective evidence, whether it is more likely than not that some or all of such assets will be utilized in future periods. At March 31, 2010, the Company has incurred losses for fiscal years 2004 through 2010 for financial reporting purposes aggregating $13,674,000 and would have been required to generate approximately $14,626,000 of aggregate taxable income, exclusive of any reversals or timing differences, to fully utilize its net deferred tax asset. Accordingly, based upon the available objective evidence, particularly the Company’s history of losses, the Company provided for a full valuation allowance against its net deferred tax asset at March 31, 2010.</font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">It is the Company’s practice to include interest and penalties in tax expense.</font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">The Company currently has no federal or state tax examinations in progress and is no longer subject to federal and state income tax audits by taxing authorities for years prior to March 2007.</font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(12)</font></div>
</td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Significant Customers</font></font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">For each of the years ended March 31, 2010 and 2009, Diageo North America, Inc. (“Diageo”) accounted for approximately 63% and 64% of the Company’s revenues, respectively. At March 31, 2010 and 2009, Diageo accounted for 71% and 45%, respectively, of the Company’s accounts receivable. For the years ended March 31, 2010 and 2009, our second largest customer accounted for approximately 12% and 10% of the Company’s revenue, respectively. At March 31, 2010 and 2009, this customer accounted for 18% and 5% respectively, of the Company’s accounts receivable.</font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(13)</font></div>
</td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Employee Benefit Plan</font></font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">The Company has a savings plan available to substantially all salaried employees which is intended to qualify as a deferred compensation plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). Pursuant to the 401(k) Plan, employees may contribute up to 15% of their eligible compensation, up to the maximum amount allowed by law. The Company at its sole discretion may from time to time make discretionary matching contributions as it deems advisable. The Company’s current policy is to match its employee’s contributions to the 401(k) Plan at the rate of 50%, with the maximum matching contribution per employee being the lower of 2.5% of salary or $5,750 in any calendar year. For the years ended March 31, 2010 and 2009, the Company made discretionary contributions of approximately $156,000 and $91,000, respectively.</font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">(14)</font></div>
</td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman; TEXT-DECORATION: underline"><font style="DISPLAY: inline">Leases</font></font></div>
</td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
</tr><tr>
<td valign="top" width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">&nbsp; </font></td>
<td valign="top" width="95%">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: times new roman">The Company has several non-cancelable operating leases, primarily for property, that expire through June 2015. Rent expense for the years ended March 31, 2010 and 2009 amounted to approximately $1,535,000 and $1,387,000, respectively. Future non-cancelable minimum lease payments under all of the leases as of March 31, 2010 are as follows<font style="DISPLAY: inline; FONT-WEIGHT: bold">:</font></font></div>
</td>
</tr></tbody></table>
<table>
<tbody><tr>
<td><font>  </font></td>
<td>
<div><font>In assessing the realizability of deferred tax assets, management considers, in light of available objective evidence, whether it is more likely than not that some or all of such assets will be utilized in future periods. At March 31, 2010, the Company has incurred losses for fiscal years 2004 through 2010 for financial reporting purposes aggregating $13,674,000 and would have been required to generate approximately $14,626,000 of aggregate taxable income, exclusive of any reversals or timing differences, to fully utilize its net deferred tax asset. Accordingly, based upon the available objective evidence, particularly the Company’s history of losses, the Company provided for a full valuation allowance against its net deferred tax asset at March 31, 2010.</font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td><font>  </font></td>
<td>
<div><font>It is the Company’s practice to include interest and penalties in tax expense.</font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td><font>  </font></td>
<td>
<div><font>The Company currently has no federal or state tax examinations in progress and is no longer subject to federal and state income tax audits by taxing authorities for years prior to March 2007.</font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td>
<div><font>(12)</font></div>
</td>
<td>
<div><font><font>Significant Customers</font></font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td><font>  </font></td>
<td>
<div><font>For each of the years ended March 31, 2010 and 2009, Diageo North America, Inc. (“Diageo”) accounted for approximately 63% and 64% of the Company’s revenues, respectively. At March 31, 2010 and 2009, Diageo accounted for 71% and 45%, respectively, of the Company’s accounts receivable. For the years ended March 31, 2010 and 2009, our second largest customer accounted for approximately 12% and 10% of the Company’s revenue, respectively. At March 31, 2010 and 2009, this customer accounted for 18% and 5% respectively, of the Company’s accounts receivable.</font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td>
<div><font>(13)</font></div>
</td>
<td>
<div><font><font>Employee Benefit Plan</font></font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td><font>  </font></td>
<td>
<div><font>The Company has a savings plan available to substantially all salaried employees which is intended to qualify as a deferred compensation plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). Pursuant to the 401(k) Plan, employees may contribute up to 15% of their eligible compensation, up to the maximum amount allowed by law. The Company at its sole discretion may from time to time make discretionary matching contributions as it deems advisable. The Company’s current policy is to match its employee’s contributions to the 401(k) Plan at the rate of 50%, with the maximum matching contribution per employee being the lower of 2.5% of salary or $5,750 in any calendar year. For the years ended March 31, 2010 and 2009, the Company made discretionary contributions of approximately $156,000 and $91,000, respectively.</font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td>
<div><font>(14)</font></div>
</td>
<td>
<div><font><font>Leases</font></font></div>
</td>
</tr><tr>
<td><font>  </font></td>
<td><font>  </font></td>
</tr><tr>
<td><font>  </font></td>
<td>
<div><font>The Company has several non-cancelable operating leases, primarily for property, that expire through June 2015. Rent expense for the years ended March 31, 2010 and 2009 amounted to approximately $1,535,000 and $1,387,000, respectively. Future non-cancelable minimum lease payments under all of the leases as of March 31, 2010 are as follows<font>:</font></font></div>
</td>
</tr></tbody></table>