<table><tbody><tr style="vertical-align: top; text-align: justify">
<td style="width: 4%; text-align: right">&nbsp;</td><td style="width: 3%"></td><td style="text-align: justify; width: 93%">The settlement did not have
a material adverse impact on our finances. </td>
</tr>     <tr style="vertical-align: top; text-align: justify">
<td style="text-align: right">&nbsp;</td><td>&nbsp;</td><td style="text-align: justify"></td></tr>
<tr style="vertical-align: top; text-align: justify">
<td style="text-align: right">&nbsp;</td><td>&nbsp;</td><td style="text-align: justify">The Company has obligations to provide indemnification
to its officers and directors (and former officers and directors), as well as to the investors in the December 2009 financing,
including for all legal costs incurred by them in defending these claims. The Company incurred approximately $978,000 in legal
expenses in connection with its defense of the lawsuit and its indemnification obligations, with $147,000 of that amount incurred
during the twelve months ended March 31, 2012.</td></tr>
</tbody></table>
<table><tbody><tr>
<td> </td><td></td><td>The settlement did not have
a material adverse impact on our finances. </td>
</tr> <tr>
<td> </td><td> </td><td></td></tr>
<tr>
<td> </td><td> </td><td>The Company has obligations to provide indemnification
to its officers and directors (and former officers and directors), as well as to the investors in the December 2009 financing,
including for all legal costs incurred by them in defending these claims. The Company incurred approximately $978,000 in legal
expenses in connection with its defense of the lawsuit and its indemnification obligations, with $147,000 of that amount incurred
during the twelve months ended March 31, 2012.</td></tr>
</tbody></table>