14. Commitments and Contingencies Litigation In the ordinary course of business, the Company is subject to legal claims and assessments. Except as described below, the Company is not a party to any legal proceedings, claims or assessments that, in management s opinion, would have a material adverse effect on the Company s business, financial condition and results of operations. In July 2011, a complaint was filed in the United States District Court, Middle District of Tennessee, against the Company and certain of its officers on behalf of certain purchasers of the Company s common stock. The complaint alleges that the Company and certain of its officers violated federal securities laws by making materially false and misleading statements regarding the Company s business, operations, management, future business prospects and the intrinsic value of the Company s common stock, the safety and efficacy of Augment , its prospects for FDA approval and inadequacies in Augment  s clinical trials. The plaintiffs seek unspecified monetary damages and other relief. In February 2012, the Company and the other defendants in the case filed a motion to dismiss the complaint. Briefing on the motion to dismiss was completed in June 2012, and the Court heard oral arguments on the motion in September 2012. The Court has not yet issued a ruling on the motion. In August 2011, a purported shareholder derivative complaint was filed in the United States District Court, Middle District of Tennessee, allegedly on behalf of and for the benefit of the Company, against all the members of the current Board of Directors of the Company, and names the Company as a nominal defendant. The shareholder derivative action makes factual allegations similar to the allegations in the class action lawsuit, and alleges breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. The purported derivative action seeks modification of the Company s corporate governance policies and procedures, and also seek