<SUBMISSION>
<ACCESSION-NUMBER>0001079973-08-000445
<TYPE>DEF 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20080428
<FILING-DATE>20080429
<DATE-OF-FILING-DATE-CHANGE>20080428
<EFFECTIVENESS-DATE>20080429
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>AspenBio Pharma, Inc.
<CIK>0001167419
<ASSIGNED-SIC>2835
<IRS-NUMBER>841553387
<STATE-OF-INCORPORATION>CO
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>DEF 14A
<ACT>34
<FILE-NUMBER>001-33675
<FILM-NUMBER>08782899
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1585 S. PERRY STREET
<CITY>CASTLE ROCK
<STATE>CO
<ZIP>80104
<PHONE>(303) 794-2000
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1585 S. PERRY STREET
<CITY>CASTLE ROCK
<STATE>CO
<ZIP>80104
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ASPENBIO INC
<DATE-CHANGED>20020213
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>appy_def14a.htm
<DESCRIPTION>DEFINITIVE 14A
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>



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<P ALIGN=CENTER>

<FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Proxy Statement Pursuant to Section 14(a) <BR>of the Securities Exchange Act
of 1934</B> </FONT> </P>




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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Filed by the Registrant [X]
 <BR> Filed by a Party other than the Registrant  [&nbsp;&nbsp;&nbsp;]<BR> <BR>Check the appropriate box: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> [&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Preliminary
Proxy Statement</FONT></TD>
<TD WIDTH="5%" VALIGN="Top"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> [&nbsp;&nbsp;&nbsp;]</FONT></TD>



<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>

Confidential,
For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 </FONT></TD>

</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> [X] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Definitive
Proxy Statement</B> </FONT> </TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> [&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Definitive
Additional Materials </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> [&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Soliciting
Material Pursuant to </FONT></TD>
</TR>
</TABLE>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> [&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Rule
14a-11 (c) or rule 14a-12 </FONT></TD>
</TR>
</TABLE>
<BR>




<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="4"><U>ASPENBIO PHARMA, INC. </U>
</FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="100%" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(Name of Registrant as Specified In Its Charter)
</FONT></TD></TR>
</TABLE>


<BR>







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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;<BR>
                     (Name of Person(s) Filing Proxy Statement, if Other Than the
Registrant) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Payment of Filing Fee (Check the
appropriate box):<BR> [X]&nbsp;&nbsp; <B>No fee required. </B><BR>[&nbsp;&nbsp;&nbsp;] &nbsp;&nbsp;Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11. </FONT> </P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Title
of each class of securities to which transaction applies: <BR>

</FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Aggregate
number of securities to which transaction applies:<BR>




 </FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (3)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Per
unit price or other underlying value of transaction computed          pursuant to
Exchange Act Rule 0-11:<BR>


</FONT></TD>
</TR>
</TABLE>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (4)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proposed
maximum aggregate value of transaction:

</FONT></TD>
</TR>
</TABLE>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (5)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Total
fee paid: </FONT></TD>
</TR>
</TABLE>
<BR>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Fee paid previously with preliminary
materials:

 </FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;] </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Check
box if any part of the fee is offset as provided by Exchange Act Rule      0-11(a)(2) and
identify the filing for which the offsetting fee was paid      previously. Identify the
previous filing by registration statement number,      or the form or schedule and the
date of its filing. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (1)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amount
previously paid: </FONT></TD>
</TR>
</TABLE>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (2)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form,
Schedule or Registration Statement no.: </FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     (3)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Filing
Party: </FONT></TD>
</TR>
</TABLE>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4)  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date
Filed: </FONT></TD>
</TR>
</TABLE>
<BR>






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<DIV STYLE="page-break-after:always"></DIV>



<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April 28, 2008 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To Our Shareholders: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are cordially invited to the Annual Meeting of Shareholders (the &#147;Meeting&#148;) of
AspenBio Pharma, Inc. (the &#147;Company&#148;) to be held at the Wingate Inn, 8000 East
Peakview Avenue, Greenwood Village, Colorado 80111 on June 9, 2008 at 3:30 p.m. local
time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
formal Notice of the Meeting and Proxy Statement describing the matters to be acted upon
at the Meeting are contained in the following pages. Shareholders also are entitled to
vote on any other matters which properly come before the Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enclosed
is a proxy which will enable you to vote your shares on the matters to be considered at
the Meeting even if you are unable to attend the Meeting. Please mark the proxy to
indicate your vote, date and sign the proxy and return it in the enclosed envelope as soon
as possible for receipt prior to the Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHETHER
YOU OWN FEW OR MANY SHARES OF STOCK, PLEASE BE SURE YOU ARE REPRESENTED AT THE MEETING
EITHER BY ATTENDING IN PERSON OR BY RETURNING YOUR PROXY AS SOON AS POSSIBLE.</B> </FONT></P>










<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="40%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="60%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Sincerely,<BR>
<BR>
GREGORY PUSEY, CHAIRMAN
</FONT></TD></TR>
</TABLE>




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<DIV STYLE="page-break-after:always"></DIV>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ASPENBIO PHARMA, INC.</B><BR>
1585 S. Perry Street<BR>
Castle Rock, Colorado 80104<BR>
(303) 794-2000 </FONT> </P>


<HR SIZE="2" COLOR="Black">

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS                         <BR>                              TO BE HELD
ON JUNE 9, 2008 </FONT></H1>

<HR SIZE="2" COLOR="Black">



<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April 28, 2008 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the Shareholders of
AspenBio Pharma, Inc.: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Annual Meeting of Shareholders (the &#147;Meeting&#148;) of AspenBio Pharma, Inc., a
Colorado corporation (the &#147;Company&#148;) will be held at the Wingate Inn, 8000 E.
Peakview Avenue, Greenwood Village, Colorado 80111 on June 9, 2008 at 3:30 p.m. local
time, for the purpose of considering and voting upon proposals to: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Elect
six directors to serve until the next annual meeting of shareholders or
               until their successors are elected and qualified.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adopt
an amendment to the 2002 Stock Incentive Plan to increase the number of
               shares reserved under the plan from 4,250,000 to 4,600,000.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Transact
such other business as may lawfully come before the Meeting or any
               adjournment(s) thereof.  </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors is not aware of any other business to come before the Meeting. Pursuant
to the Company&#146;s Bylaws, the Board of Directors has fixed the close of business on
April 17, 2008 as the record date for determination of the shareholders entitled to vote
at the Meeting and any adjournments thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
are requested to complete and sign the enclosed proxy which is solicited by the Board of
Directors and to return it promptly in the enclosed envelope. The proxy will not be used
if you attend the Meeting and vote in person. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EACH
SHAREHOLDER, WHETHER OR NOT HE PLANS TO ATTEND THE MEETING, IS REQUESTED TO COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD. ANY PROXY GIVEN BY THE SHAREHOLDER
MAY BE REVOKED BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION OR A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY SHAREHOLDER PRESENT AT THE MEETING MAY REVOKE HIS
OR HER PROXY AND VOTE IN PERSON ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU
ARE A SHAREHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED
ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER TO VOTE IN PERSON AT THE MEETING. </FONT></P>










<TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">BY ORDER OF THE BOARD OF DIRECTORS,<BR>
<BR>
<BR>
Gregory Pusey, Chairman
</FONT></TD></TR>
</TABLE>




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<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>







<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ASPENBIO PHARMA, INC.</B><BR>
1585 S. Perry Street<BR>
Castle Rock, Colorado 80104<BR>
(303) 794-2000 </FONT> </P>


<HR SIZE="2" COLOR="Black">

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>

          PROXY STATEMENT         <BR>
  ANNUAL MEETING OF SHAREHOLDERS  <BR>
           JUNE 9, 2008
 </FONT></H1>

<HR SIZE="2" COLOR="Black">









<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April 28, 2008 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To Our Shareholders: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
proxy statement (the &#147;Proxy Statement&#148;) is furnished in connection with the
solicitation by the Board of Directors of AspenBio Pharma, Inc. (the &#147;Company&#148;)
of proxies to be used at the Annual Meeting of Shareholders (the &#147;Meeting&#148;) to
be held at the Wingate Inn, 8000 E. Peakview Avenue, Greenwood Village, Colorado 80111 on
June 9, 2008 at 3:30 p.m. local time, and at any adjournments or postponements thereof.
The Meeting is being held for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. This Proxy Statement, the accompanying proxy card, and the Notice
of Annual Meeting of Shareholders (collectively, the &#147;Proxy Materials&#148;) are
first being mailed to shareholders beginning on or about April 28, 2008. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>GENERAL INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Solicitation </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
enclosed proxy is being solicited by the Company&#146;s Board of Directors. The costs of
the solicitation will be borne by the Company. Proxies may be solicited personally or by
mail, telephone, facsimile or telegraph by directors, officers and regular employees of
the Company, none of whom will receive any additional compensation for such solicitations.
The Company will reimburse banks, brokers, nominees, custodians and fiduciaries for their
reasonable out-of-pocket expenses incurred in sending the proxy materials to beneficial
owners of the shares. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Voting Rights and Votes
Required </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
of shares of AspenBio Pharma, Inc. common stock (the &#147;Common Stock&#148;), at the
close of business on April 17, 2008 (the &#147;Record Date&#148;) are entitled to notice
of, and to vote at, the Meeting. On the Record Date, 31,312,925<B> </B>shares of Common
Stock were outstanding. Holders of Common Stock are entitled to one vote per share. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
presence, in person or by proxy, of holders of one-third of the shares outstanding as of
the Record Date constitutes a quorum for the transaction of business at the Meeting. In
the event there are not sufficient votes for a quorum or to approve any proposals at the
time of the Meeting, the Meeting may be adjourned in order to permit further solicitation
of proxies. Abstentions will count towards quorum requirements. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
to the election of directors under Proposal One, the proxy card being provided by the
Board enables a shareholder to vote for the election of each of the nominees proposed by
the Board, or to withhold authority to vote for one or more of the nominees being
proposed. Directors are elected by a plurality of votes cast, without respect to either
(i) broker non-votes, or (ii) proxies as to which authority to vote for one or more of the
other nominees being proposed is withheld. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
affirmative vote of a majority of the votes cast (either in person or by proxy) and
entitled to vote on the matter is required to approve Proposal Two. As to this proposal, a
shareholder may: (i) vote &#147;FOR&#148; the proposal, (ii) vote &#147;AGAINST&#148; the
proposal, or (iii) &#147;ABSTAIN&#148; with respect to the proposal. The proposal shall be
determined without regard to broker non-votes or proxies marked &#147;ABSTAIN&#148; as to
the matter. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
proposed corporate actions on which the shareholders are being asked to vote are not
corporate actions for which shareholders of a Colorado corporation have the right to
dissent under the Colorado Business Corporation Act. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of Common Stock represented by all properly executed proxies received at the
Company&#146;s transfer agent by June 5, 2008 will be voted as specified in the proxy.
Unless contrary instructions are indicated on the proxy, the shares of Common Stock
represented by such proxy will be voted &#147;FOR&#148; the slate of directors described
herein; and &#147;FOR&#148; adoption of the amendment to the 2002 Stock Incentive Plan as
described herein. Management and the Board of Directors of the Company know of no other
matters to be brought before the Meeting other than as described herein. If any other
matters properly are presented to the shareholders for action at the Meeting and any
adjournments or postponements thereof, the proxy holder named in the enclosed proxy
intends to vote in his discretion on all matters on which the shares of Common Stock
represented by such proxy are entitled to vote. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
giving of the enclosed proxy does not preclude the right to vote in person should the
shareholder giving the proxy so desire. A proxy may be revoked at any time prior to its
exercise by (i) providing notice in writing to the Company&#146;s corporate secretary that
the proxy is revoked; (ii) presenting to the Company a later-dated proxy; or (iii) by
attending the Meeting and voting in person. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2 </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECURITY OWNERSHIP OF<BR>CERTAIN
 BENEFICIAL OWNERS AND MANAGEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of shares outstanding of the Company&#146;s common stock at April 17, 2008, was
31,312,925. The following table sets forth the beneficial ownership of the Company&#146;s
Common Stock as of April 17, 2008 by each Company director and each executive officer, by
all directors and executive officers as a group, and sets forth the number of shares of
Company common stock owned by each person who owned of record, or was known to own
beneficially, more than 5% of the outstanding shares of common stock. To the knowledge of
the directors and executive officers of the Company, as of April 17, 2008, there are no
persons and/or companies who or which beneficially own, directly or indirectly, shares
carrying more than 5% of the voting rights attached to all outstanding shares of the
Company, other than as set forth below. </FONT></P>







<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=1>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name and Address</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman" SIZE=1>Number of Shares</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman" SIZE=1><BR>
Percent</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT><HR WIDTH=100% SIZE=2 COLOR=BLACK NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="35%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Richard G. Donnelly (1)</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="25%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="25%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="5%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>2838 Garrett Drive</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>946,014</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>3.0%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Fort Collins, CO 80526</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Gregory Pusey (2)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>106 S. University, No. 14</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1,486,054</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>4.7%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Denver, CO 80209</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Gail S. Schoettler (3)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>11855 East Daley Circle</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>331,666</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.0%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Parker, CO 80134</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Douglas I. Hepler (4)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>815 Cliff Dr.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>407,766</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.3%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>McLeansville, NC 27301</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>David E. Welch (5)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>1585 S. Perry Street</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>216,666</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Castle Rock, CO 80104</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Jeffrey G. McGonegal (6)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>1585 S. Perry Street</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>562,322</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1.8%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Castle Rock, CO 80104</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Mark J. Ratain (7)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>5841 South Maryland Avenue</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>MC2115</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Chicago, IL 60637</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>All Officers and Directors as a Group</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>3,950,488</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>11.8%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>(7 persons) (8)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>RMB Capital Management, LLC</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>115 S. LaSalle St., 34th Floor</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1,569,381</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>5.0%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Chicago, IL 60603</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>The Peierls Foundation, Inc.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>c/o U.S. Trust Company of N.Y.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>2,771,339</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>8.9%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>114 West 47th Street</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>New York, N.Y. 10036</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Corriente Advisors, LLC</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>201 Main Street, Suite 1800</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>2,878,492</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>9.2%</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Fort Worth, TX 76102</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=9><HR NOSHADE COLOR=#000000></TD></TR>
</TABLE>






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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* Holds less than 1% </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3 </FONT></P>

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<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
324,681 shares and 13,000 held by his IRA and options to acquire 500,000 shares at $.60
per share, options to acquire 75,000 shares at $1.40 per share, and options to acquire
33,333 shares at $2.96 per share. Does not include options to acquire 66,667 shares at
$2.96 per share which vest equally in January of 2009 and 2010. Also does not include
options to acquire 50,000 at $6.63 per share which vest equally over three years in
arrears commencing in January of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
626,341 shares directly owned plus 137,290 shares held by his wife, his wife&#146;s IRA
account and their daughter. Mr. Pusey disclaims beneficial ownership of these shares.
Also includes: (i) 57,913 shares held in Mr. Pusey&#146;s IRA account, (ii) 5,107 shares
held jointly with his wife and (iii) 292,737 shares held by Cambridge Holdings Ltd. Mr.
Pusey is President, a director and principal shareholder of Cambridge. Includes options
to acquire 100,000 shares at $1.21 per share granted in January of 2004. Includes options
to acquire 250,000 options at $0.80 per share, and options to acquire 16,666 shares at
$2.96 per share. Excludes 33,334 options at $2.96 per share granted to Mr. Pusey in
January 2007 which vest equally in January 2009 and 2010. Excludes options to purchase
50,000 shares at $6.63 per share granted January 2008, which vest equally over three
years in arrears commencing in January of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
15,000 shares and options to purchase 100,000 shares at $1.47 per                share,
options to purchase 50,000 shares at $.85 per share, options to purchase
               100,000 shares at $.96 per share, options to purchase 50,000 shares at
$1.60 per                share, and options to purchase 16,666 shares at $2.96 per share.
Excludes                options to purchase 33,334 shares at $2.96 per share as such
options vest                equally in January 2009 and 2010. Also excludes options to
purchase 50,000                shares at $6.63 per share which vest one-third each year
for three years                beginning January 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
21,100 shares directly owned plus 120,000 shares held by Dr. Hepler&#146;s wife. Dr.
Hepler disclaims ownership of these shares. Also includes options to purchase 100,000
shares at $1.50 per share, options to purchase 50,000 shares at $.80 per share, options
to purchase 50,000 shares at $ 1.60 per share, and options to purchase 16,666 shares at
$2.96 per share. Also includes options to purchase 50,000 shares at $.75 per share held
by Dr. Helper&#146;s wife. Dr. Helper disclaims ownership of these shares. Excludes
options to purchase 33,334 shares at $2.96 per share as such options vest equally in
January of 2009 and 2010. Also excludes options to purchase 50,000 shares at $6.63 per
share which vest one-third each year for three years beginning January of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
options to acquire 100,000 shares at $.76 per share, options to acquire 50,000 shares at
$.80 per share, options to acquire 50,000 shares at $1.60 per share and options to
acquire 16,666 shares at $2.96 per share. Excludes options to purchase 33,334 options at
$2.96 per share which vest equally in January 2009 and 2010. Also excludes options to
purchase 50,000 shares at $6.63 per share which vest one-third each year for three years
beginning January of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
194,156 shares and 1,500 shares owned by his daughter. Also includes options to purchase
60,000 shares at $1.47, options to acquire 140,000 shares at $1.21 per share, options to
purchase 100,000 shares at $.75 per share, options to purchase 50,000 shares at $.80 per
share, and options to purchase 16,666 shares at $2.96 per share. Excludes options to
purchase options to purchase 33,334 shares at $2.96 per share vesting equally in January
2009 and January 2010. Also excludes options to purchase 40,000 shares at $6.63 per share
which vest one-third each year for three years beginning January of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Excludes
options to purchase 66,313 shares at $6.13 per share which vest at one-third each year
for three years beginning in March of 2009.  </FONT></TD>
</TR>
</TABLE>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8)</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>         Includes
footnotes one through seven.  </FONT></TD>
</TR>
</TABLE>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Changes in Control</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There are no arrangements known to
the Company which may result in a change in control of the Company. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4 </FONT></P>

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<DIV STYLE="page-break-after:always"></DIV>




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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>MANAGEMENT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive
officers of the Company are elected by the Board of Directors, and serve for a term of one
year and until their successors have been elected and qualified or until their earlier
resignation or removal by the Board of Directors. There are no family relationships among
any of the directors and executive officers of the Company. None of the executive officers
or directors has been involved in any legal proceedings during the past five years.
Further, there is no arrangement or understanding between any director pursuant to which
he or she was selected as a director. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth names and ages of all executive officers and directors of the
Company: </FONT></P>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="600" ALIGN="CENTER">
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><FONT FACE="Times New Roman" SIZE=1>Name</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1>Age</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1>Position</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="26%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Richard G. Donnelly</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="5%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>49</FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="58%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>President, Chief Executive Officer and Director</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Gregory Pusey</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>55</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Chairman, Secretary and Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Gail S. Schoettler</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>64</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Douglas I. Hepler</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>61</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>David E. Welch</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>61</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Mark J. Ratain, M.D.</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>53</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Jeffrey G. McGonegal</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>57</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Chief Financial Officer</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>





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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Richard G. Donnelly</U> was
elected President, Chief Executive Officer and as a director, in January 2005. From
September 1999 to December 2004, Mr. Donnelly served in senior marketing positions with
Heska Corporation, including most recently as Senior Director of Marketing. From January
1993 to September 1999, Mr. Donnelly served as Director of Marketing for the Fort Dodge
division of Wyeth Inc., (American Home Products). Mr. Donnelly holds a three-year diploma
in Animal Science from St. Lawrence College. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Gregory Pusey</U> became a
director of AspenBio Pharma, Inc. in February 2002, and Chairman in May 2003. Mr. Pusey is
Chairman and a director (in December 2002) of Security With Advanced Technology, Inc.
(Nasdaq: SWAT), a publicly held provider of non-lethal projectiles, launchers, hardware
and software security related products.&nbsp; Since 1988, Mr. Pusey has been the President
and a director of Cambridge Holdings, Ltd.&nbsp; He is also President of Livingston
Capital, Ltd. since 1987, a private venture capital firm. Mr. Pusey is secretary and a
director of Bactolac Pharmaceutical, Inc. and has been associated with its predecessors
since 1997, a privately held company engaged in manufacturing and marketing of vitamins
and nutritional supplements. Mr. Pusey graduated&nbsp; from Boston College with a BS
degree in finance. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Gail S. Schoettler</U> &#150;
Ambassador Gail Schoettler serves on the boards of AspenBio Pharma, Inc., Security with
Advanced Technology, Masergy Communications, Delta Dental of Colorado, The Colorado Trust
(Colorado&#146;s largest foundation) and several non-profit organizations. She has served
as a U.S. Ambassador and as Colorado&#146;s Lt. Governor and State Treasurer. In 1998, she
narrowly lost her bid for Governor of Colorado. She started two successful banks and is
involved in her family&#146;s cattle ranch, vineyards and real estate enterprises. In
addition to being a Denver Post columnist, Dr. Schoettler and her husband own
eGlobalEducation, a custom travel company leading executive groups to countries around the
world. She earned a BA in economics from Stanford and MA and PhD degrees in African
History from the University of California at Santa Barbara. Among her numerous awards is
the French Legion of Honor (France&#146;s highest civilian award) from President Jacques
Chirac of France. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5 </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Douglas I. Hepler, Ph.D.</U>
joined the Company&#146;s Board of Directors in March of 2004. Commencing in 2006 Dr.
Hepler became President of KADO Consulting a newly formed consulting firm. Through April
2006 he served as Vice President of Research and Development for IDEXX Pharmaceuticals,
Inc., a wholly owned subsidiary of IDEXX Laboratories, Inc. Dr. Hepler was responsible for
the overall technical leadership of the Pharmaceutical Division of IDEXX Pharmaceuticals,
Inc. Dr. Hepler was also the Co-founder and Executive Vice President of Blue Ridge
Pharmaceuticals, Inc. before its sale to IDEXX Laboratories, Inc. in 1998. While at Blue
Ridge Pharmaceuticals, Dr. Hepler was instrumental in the development and FDA registration
of Acarexx, Iverhart Plus, PZI Vet, Facilitator, Navigator, Pyrantel and CyFly. Prior to
Blue Ridge Pharmaceuticals, Dr. Hepler was instrumental in the development and FDA
registration of Interceptor, Program and Sentenial while at Novartis Animal Health. Dr.
Hepler received a B.S. degree from Lock Haven University in biology, a M.S. from Colorado
State University in microbiology and a Ph.D. from Colorado State University in immunology. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>David E. Welch</U> became a
director of AspenBio Pharma as of October 1, 2004. Mr. Welch has served as Vice President
and Chief Financial Officer of American Millennium Corporation, Inc., a public company
located in Golden, Colorado, since April 2004. In January 2007, Mr. Welch was also elected
as a director of Security With Advanced Technology, Inc. He also is a self-employed
financial consultant. From July 1999 to June 2002, Mr. Welch served as Chief Financial
Officer, Secretary and Treasurer of Active Link Communications, Inc., another publicly
traded company. During 1998 he served as Chief Information Officer for Language Management
International, Inc., a multinational translation firm located in Denver, Colorado. From
1996 to 1997, he was Director of Information Systems for Mircromedex, Inc., an electronic
publishing firm, located in Denver, Colorado. Mr. Welch also serves on the Board of
Directors of Communication Intelligence Corporation, a publicly traded company. He
received a B.S. degree in accounting from the University of Colorado. Mr. Welch is a
Certified Public Accountant, licensed in the state of Colorado. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Mark J. Ratain, M.D.</U> was
appointed to our Board of Directors in March 2008. Since April 1998 Dr. Ratain has served
as a director of DATATRAK International, Inc. (Nasdaq Capital Market &#150;
&#147;DATA&#148;) a technology and services company focused on providing a platform of
software applications to the global clinical trials industry. Dr. Ratain is a
hematologist/oncologist and a clinical pharmacologist. He is the Leon O. Jacobson
Professor of Medicine and Chairman of the Committee on Clinical Pharmacology and
Pharmacogenomics and Associate Director for Clinical Science for the Cancer Research
Center at the University of Chicago. Dr. Ratain has been associated with the Department of
Medicine at the University of Chicago since 1983. He has authored and co-authored more
than 250 articles and book chapters. He received his A.B. Degree in Biochemical Sciences
from Harvard University and his M.D. from the Yale University School of Medicine. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Jeffery McGonegal </U>became Chief
Financial Officer of the Company in June 2003 and served as interim President in December
2004 and January 2005. Mr. McGonegal also serves as Chief Executive Officer and Chief
Financial Officer of Security With Advanced Technology, Inc. (Nasdaq: SWAT), a publicly
held provider of hardware and software security related products, Mr. McGonegal also
serves as Senior Vice President &#151; Finance of Cambridge Holdings, Ltd., a small
publicly held company with limited activities. Since 1997, Mr. McGonegal has served as
Managing Director of McGonegal and Co., a company engaged in providing accounting and
business consulting services. From 1974 to 1997, Mr. McGonegal was an accountant with BDO
Seidman LLP. While at BDO Seidman LLP, Mr. McGonegal served as managing partner of the
Denver, Colorado office. Mr. McGonegal was elected in 2005 to serve on the board of
Imagenetix, Inc., a publicly held company in the nutritional supplements industry. He
received a B.A. degree in accounting from Florida State University. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Transactions with
Related Persons</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
January 1, 2007, none of the directors or executive officers of the Company, nor any
person who owned of record or was known to own beneficially more than 5% of the
Company&#146;s outstanding shares of its Common Stock, nor any associate or affiliate of
such persons or companies, has any material interest, direct or indirect, in any
transaction, or in any proposed transaction, which has materially affected or will affect
the Company. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Independence of the
Board of Directors</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors currently consists of Messrs. Donnelly, Pusey, Hepler, Welch, and
Ratain and Ms. Schoettler. Each is currently a nominee for director. The Company defines
&#147;independent&#148; as that term is defined in Rule 4200(a) (15) of the Nasdaq listing
standards. Messrs. Welch, Hepler, Ratain and Ms. Schoettler qualify as independent and
none of them has any material relationship with the Company that might interfere with his
or her exercise of independent judgment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
2006 Directors of the Company were not paid cash for their services. Commencing in
February 2007 the outside independent directors began receiving cash compensation of $500
per month which was increased to $1,000 per month each effective February 1, 2008. Our
independent directors typically receive a stock option upon joining and additional options
over time, generally annually. As of January 1, 2008 Greg Pusey receives a salary of
$150,000 annually for his active role as Chairman a position he had held since September
2003. The directors are reimbursed for all expenses incurred by them in attending board
meetings. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Meetings of the Board
and Committees</U> </FONT> </H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company&#146;s Board of Directors held thirteen meetings during the Company&#146;s year
ended December 31, 2007, and three additional meetings through April 25, 2008. Such
meetings consisted of actions taken by unanimous written consent and meetings at which all
of the directors were present in person or by telephone. The Company does not have a
formal policy with regard to board members&#146; attendance at annual meetings, but
encourages them to attend shareholder meetings. Each board member then serving attended
our annual meeting of shareholders held on July 17, 2007. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7 </FONT></P>


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<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Committees</U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit
Committee</I>: &nbsp;&nbsp;The Company has a separately designated standing audit
committee established in accordance with Section 3(a) (58) (A) of the Exchange Act. All of
the Company&#146;s independent directors serve on the audit committee, which consists of:
David Welch (who serves as Chair of the Committee), Douglas Hepler and Gail Schoettler.
Mr. Welch has been designated as the financial expert on the audit committee. The Company
defines &#147;independent&#148; as that term is defined in Rule 4200(a) (15) of the Nasdaq
listing standards. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee was formed on December 22, 2003, and held five formal meeting during the
year ended December 31, 2007. All of the members attended the meeting in person or by
telephone. The Board of Directors has adopted a written charter for the audit committee.
The audit committee charter is available on our website at www.aspenbioinc.com. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following constitutes the report the Audit Committee has made to the Board of Directors
and, when read in connection with the Audit Committee Charter, generally describes the
functions performed by the audit committee: </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>REPORT OF THE AUDIT
COMMITTEE </B><BR> To the Board of Directors of AspenBio
Pharma, Inc. </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
is responsible for our internal controls and the financial reporting process. The
independent accountants are responsible for performing an independent audit of our
financial statements in accordance with generally accepted auditing standards and to issue
a report on our financial statements. Our responsibility is to monitor and oversee those
processes. We hereby report to the Board of Directors that, in connection with the
financial statements for the year ended December 31, 2007, we have: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>reviewed
and discussed the audited financial statements with management and the       independent
accountants; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang LV 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>approved
the appointment of the independent accountants; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang LV 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>discussed
with the independent accountants the matters required to be discussed by SAS 61
(Codification of Statements on Auditing Standards, AU section 380), as modified by SAS 89
and SAS 90; and  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;  </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>received
the written disclosures and the letter from the independent accountants required
            by Independence Standards Board Standard No. 1 (Independence Standards Board
                 Standard  No.1,  Independence Discussions with Audit Committees), as may
be modified            or supplemented, and discussed with the independent accountant the
accountant's  independence. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on the discussions and our review discussed above, we recommended to the Board of
Directors that the audited financial statements for the year ended December 31, 2007 be
included in the Company&#146;s 2007 Annual Report to Shareholders on Form 10-KSB for that
fiscal year. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8 </FONT></P>

<!-- MARKER PAGE="; page: 11" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Respectfully submitted,<BR>
                                             The Audit Committee of AspenBio Pharma, Inc.<BR>
                                                          David Welch, Chair<BR>
                                                        Douglas Hepler, Member<BR>
                                                        Gail Schoettler, Member </FONT></P>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation
Committee</I>: &nbsp;&nbsp;All of the Company&#146;s independent directors serve on the
compensation committee, which consists of: Gail Schoettler (who serves as Chair of the
Committee), Douglas Hepler, David Welch, and Mark Ratain. The Compensation Committee held
four meetings in 2007. Duties of the compensation committee include reviewing and making
recommendations regarding compensation of executive officers. The Board of Directors
adopted our Compensation Committee charter on March 17, 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Duties
of the Compensation Committee include reviewing and making recommendations regarding
compensation of executive officers and determining the need for and the appropriateness of
employment agreements for senior executives. This includes the responsibility: (1) to
determine, review and approve on an annual basis the corporate goals and objectives with
respect to compensation for the senior executives; and (2) to evaluate at least once a
year the performance of the senior executives in light of the established goals and
objectives and, based upon these evaluations, to determine the annual compensation for
each, including salary, bonus, incentive and equity compensation. When evaluating and
determining the compensation of our executive officers the Compensation Committee
evaluates factors including the executive&#146;s responsibilities, experience and the
competitive marketplace. Further, the Compensation Committee has authority to retain such
compensation consultants, outside counsel and other advisors as the Committee in its sole
discretion deems appropriate. The Committee may also invite the Senior Executives and
other members of management to participate in their deliberations, or to provide
information to the Committee for its consideration with respect to such deliberations,
except that: the chief executive officer may not be present for the deliberation of or the
voting on compensation for the chief executive officer. The chief executive officer may,
however, be present for the deliberation of or the voting on compensation for any other
officer. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Compensation Committee also has the authority and responsibility: (1) to review the fees
paid to independent directors for service on the board of directors and its committees,
and make recommendations to the board with respect thereto (however disinterested members
of the board ultimately determine the fees paid to the independent directors); and (2) to
review the Company&#146;s incentive compensation and other stock-based plans and recommend
changes in such plans to the board as needed. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominating
and Corporate Governance Committee</I> (&#147;Nominating Committee&#148;): &nbsp;&nbsp;All
of the Company&#146;s independent directors serve on the Nominating Committee, which
consists of: Gail Schoettler (who serves as Chair of the Committee), Douglas Hepler, David
Welch, and Mark Ratain. Duties of the Nominating Committee include oversight of the
process by which individuals may be nominated to our board of directors. Our Nominating
Committee&#146;s charter was adopted by the board of directors on March 17, 2004, and is
available on our web site at www.aspenbioinc.com. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9 </FONT></P>


<!-- MARKER PAGE="; page: 12" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
functions performed by the Nominating Committee include identifying potential directors
and making recommendations as to the size, functions and composition of the Board and its
committees. In making nominations, our Nominating Committee is required to submit
candidates who have the highest personal and professional integrity, who have demonstrated
exceptional ability and judgment and who shall be most effective, in conjunction with the
other Nominees to the board, in collectively serving the long-term interests of the
shareholders. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nominating Committee considers nominees proposed by our shareholders. To recommend a
prospective nominee for the Nominating Committee&#146;s consideration, you may submit the
candidate&#146;s name by delivering notice in writing to AspenBio Pharma, Inc. c/o
Nominating Committee Chair, Gail Schoettler, via email at gailschoettler@msn.com or via
first class U.S. mail, at AspenBio Pharma, Inc., 1585 S. Perry Street, Castle Rock, CO
80104. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
shareholder nomination submitted to the nomination committee must include at least the
following information (and can include such other information the person submitting the
recommendation desires to include), and must be submitted to the Company by the date
mentioned in the most recent proxy statement under the heading &#147;Proposal From
Shareholders&#148; as such date may be amended in cases where the annual meeting has been
changed as contemplated in SEC Rule 14a-8(e), Question 5: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
name, address, telephone number, fax number and e-mail address of the person submitting
the recommendation; The number of shares and description of the Company voting securities
held by the person submitting the nomination and whether such person is holding the shares
through a brokerage account (and if so, the name of the broker-dealer) or directly; The
name, address, telephone number, fax number and e-mail address of the person being
recommended to the nominating committee to stand for election at the next annual meeting
(the &#147;proposed nominee&#148;) together with information regarding such person&#146;s
education (including degrees obtained and dates), business experience during the past ten
years, professional affiliations during the past ten years, and other relevant
information. Information regarding any family relationships of the proposed nominee as
required by Item 401(d) of SEC Regulation S-K. (v) Information whether the proposed
nominee or the person submitting the recommendation has (within the ten years prior to the
recommendation) been involved in legal proceedings of the type described in Item 401(f) of
SEC Regulation S-K (and if so, provide the information regarding those legal proceedings
required by Item 401(f) of Regulation S-K). Information regarding the share ownership of
the proposed nominee required by Item 403 of Regulation S-K. Information regarding certain
relationships and related party transactions of the proposed nominee as required by Item
404 of Regulation S-K. The signed consent of the proposed nominee in which he or she
consents to being nominated as a director of the Company if selected by the nominating
committee, states his or her willingness to serve as a director if elected for
compensation not greater than that described in the most recent proxy statement; states
whether the proposed nominee is &#147;independent&#148; as defined by Nasdaq Marketplace
Rule 4200(a)(15); and d. attests to the accuracy of the information submitted pursuant to
this paragraph. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR"  -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
the information may be submitted by fax, e-mail, mail, or courier, the nominating
committee must receive the proposed nominee&#146;s signed consent, in original form,
within ten days of making the nomination. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10 </FONT></P>


<!-- MARKER PAGE="; page: 13" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When
the information required above has been received, the Nominating Committee will evaluate
the proposed nominee based on the criteria described below, with the principal criteria
being the needs of the Company and the qualifications of such proposed nominee to fulfill
those needs. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
process for evaluating a director nominee is the same whether a nominee is recommended by
a shareholder or by an existing officer or director. The Nominating Committee has
established criteria for selection of potential directors, taking into consideration the
following attributes which are desirable for a member of our Board of Directors:
leadership; independence; interpersonal skills; financial acumen; business experiences;
industry knowledge; and diversity of viewpoints. The Nominating Committee will
periodically assess the criteria to ensure it is consistent with best practices and the
goals of the Company; identify individuals who satisfy the criteria for selection to the
Board and, after consultation with the Chairman of the Board, make recommendations to the
Board on new candidates for Board membership; and receive and evaluate nominations for
Board membership which are recommended by existing directors, corporate officers, or
shareholders in accordance with policies set by the Nominating Committee and applicable
laws. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Nominating Committee held five formal meetings in 2007. On March 27, 2008 the Nominating
Committee nominated all six directors then serving on our board of directors to stand for
re-election, including Dr. Ratain who was appointed to the board on March 27, 2008. The
Company has not engaged the services of or paid a fee to any third party or parties to
identify or evaluate or assist in identifying or evaluating potential nominees. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Section 16(a) Beneficial
Ownership Reporting Compliance</U> </FONT> </H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
16(a) of the Securities Exchange Act of 1934, as amended, requires the Company&#146;s
Officers and Directors and persons who own more than 10% of the Company&#146;s outstanding
Common Stock to file reports of ownership with the Securities and Exchange Commission
(&#147;SEC&#148;). Directors, officers, and greater than 10% shareholders are required by
SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
solely on a review of Forms 3, 4, and 5 and amendments thereto furnished to the Company
during and for the Company&#146;s year ended December 31, 2007, and as of April 18, 2008,
there were no directors, officers or more than 10% shareholders of the Company who failed
to timely file a Form 3, 4 or 5. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Shareholder
Communication with the Board of Directors</U> </FONT> </H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR"  -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company values the views of its shareholders (current and future shareholders, employees
and others). Accordingly, the Board of Directors established a system through its Audit
Committee to receive, track and respond to communications from shareholders addressed to
the Company&#146;s Board of Directors or to its Non-Management Directors. Any shareholder
who wishes to communicate with the Board of Directors or the Non-Management Directors may
write to: </FONT></P>



<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>David Welch<BR>
                                                        Chair, Audit Committee<BR>
                                                       c/o AspenBio Pharma, Inc.<BR>
                                                         1585 S. Perry Street<BR>
                                                         Castle Rock, CO 80104<BR>
                                                 email address: dwelch@welchconsul.com </FONT></P>



<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11 </FONT></P>


<!-- MARKER PAGE="; page: 14" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>





<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
chair of the Audit Committee is the Board Communications Designee. He will review all
communications and report on the communications to the chair of the Nominating Committee,
the full Board or the Non-Management Directors as appropriate. The Board Communications
Designee will take additional action or respond to letters in accordance with instructions
from the relevant Board source. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE COMPENSATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Compensation and other
Benefits of Executive Officers</U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets out the compensation received for the fiscal years ended December 31,
2007 and 2006 in respect to each of the individuals who were the Company&#146;s chief
executive officer and chief financial officer at any time during the last fiscal year and
the Company&#146;s most highly compensated executive officers whose total salary and bonus
exceeded $100,000 (the &#147;Named Executive Officers&#148;). </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SUMMARY COMPENSATION
TABLE </FONT></H1>








<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1>Name and<BR>
Principal<BR>
Position</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1>Year</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Salary<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Bonus<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Stock<BR>
Awards<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Option<BR>
Awards ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Non-Equity<BR>
Incentive Plan<BR>
Compensation ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Non-Qualified<BR>
Deferred<BR>
Plan<BR>
Compensation<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>All Other<BR>
Compensation<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1>Total<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
</TR>
<TR VALIGN=Bottom>
     <TD WIDTH=29% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Richard G. Donnelly,</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>2007</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 222,917</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 280,000</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  74,000</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  78,981</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  31,784</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD WIDTH=5% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 687,682</FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2> Chief Executive Officer and Director(1)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 200,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  14,170</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  79,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  27,886</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 321,056</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>


     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>



<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Jeffrey G. McGonegal,</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>2007</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 100,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  80,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  35,889</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  20,857</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 236,746</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2> Chief Financial Officer(2)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>2006</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  88,333</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>       0</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>  88,333</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>

<BR>




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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During
2006 Mr.  Donnelly was awarded a cash bonus of $14,170 that was paid in 2007. He was also
provided  temporary        living  accommodations  near the plant at a total cost of
$9,622 and coverage under the Company's group medical plan        at a total cost of $
13,413 and $ 4,851 in life insurance  premiums.  In July 2006, Mr. Donnelly was granted
100,000        options at $1.40 per share  vesting over six months on a cliff  vesting
 basis;  in December  2006,  25,000 of those        options  expired as a result of
 specified  sales  levels not being met.  In January  2005 Mr.  Donnelly  joined the
       Company as President,  Chief  Executive  Officer and was elected to the Company's
 board.  In December  2005, he was        granted options to acquire 100,000 shares at
$0.96 per share conditional upon meeting specified sales levels.  These        options
 expired in June 2006.  In January  2007 Mr.  Donnelly's  Employment  Agreement  was
 amended to among other        provisions,  extend its  termination  date to February
2009, to increase his annual  compensation to $225,000 and he        was also granted
25,000  restricted shares of common stock,  valued at the time of issuance at $74,000.
 During 2007        Mr.  Donnelly  was also  provided  temporary  living  accommodations
 near the plant at a total cost of $10,917  and        coverage  under  the  Company's
 group  medical  plan at a total  cost of $  16,016  and $ 4,851  in life  insurance
       premiums.  Mr.  Donnelly was awarded  with a cash bonus for the 2007 year of
$280,000  that was paid to him in 2008.        In January 2008 Mr. Donnelly's  Employment
 Agreement was amended to among other provisions,  to increase his annual
       compensation  to $250,000.  On January 17, 2008 Mr.  Donnelly was granted  50,000
options at $6.63 per share vesting        in arrears over a three year period and
expiring in ten years. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12 </FONT></P>


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<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During
2007 Mr.  McGonegal was granted  options to acquire  50,000 shares of common stock at
$2.96 per share vesting        in arrears  over a three year period and  expiring in ten
years.  Mr.  McGonegal  was awarded  with a cash bonus for        the 2007 year of
$80,000 that was paid to him in 2008. In January 2008, his  compensation  was increased
to $150,000        per year and he was  granted  40,000  options at $6.63 per share
 vesting in  arrears  over a three year  period and        expiring in ten years.  During
2007, Mr.  McGonegal was provided  coverage under the Company's group medical plan at
       a total cost of $20,857. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company values common shares issued for compensation at the closing trading price on the
day of award. Options        and warrants issued for compensation are valued based the
Black-Scholes model using the assumption as detailed in        the note to the
accompanying financial statements. </FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Compensation Committee of the Board of Directors reviews and proposes  compensation,
 bonus and equity awards for       the executive officers.  Richard Donnelly is the only
officer employed under an employment  contract.  The employment       agreement  contains
 provisions for the  establishment  of goals and incentive bonus  arrangements  annually
that are       approved  by the board.  Compensation  and equity  awards  are  generally
 made  annually  based upon  reviews by the       Compensation Committee of goals and
performance. </FONT></TD>
</TR>
</TABLE>
<BR>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OUTSTANDING EQUITY
AWARDS AT FISCAL YEAR END </FONT></H1>








<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1"><FONT FACE="Times New Roman" SIZE=1>Name and Principal Position</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Number of<BR>
Securities<BR>
Underlying<BR>
Exercisable<BR>
Options (#)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Number of<BR>
Securities<BR>
Underlying<BR>
Un-exercisable<BR>
Options (#)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Equity<BR>
Incentive<BR>
Plan Awards:<BR>
Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Unearned<BR>
Options</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Option<BR>
Exercise<BR>
Price ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Option<BR>
Expiration Date</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR>
     <TD COLSPAN=18>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="43%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Richard G. Donnelly,</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>500,000</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$0.60</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1-24-15</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp; <I>Chief Executive Officer and Director</I> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>75,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$1.40</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1-24-16</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>33,333</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>66,667</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$2.96</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1-24-17</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR>
     <TD COLSPAN=18>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Jeffery McGonegal,</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>60,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$1.47</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>6-17-13</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;<I>Chief Financial Officer</I> </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>140,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$1.21</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1-19-14</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>100,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$0.75</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>8-24-14</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>50,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$0.80</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>3-24-15</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>16,666</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>33,334</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$2.96</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>1-24-17</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

</TABLE>


<BR>





<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Stock options granted, generally
vest over a three year period from the date of grant, annually in arrears and expire in
ten years. In December 2005 the Company&#146;s board vested all non-vested options that
remained outstanding at that time 100%. The material terms of the option grants are more
fully described in the notes to the Summary Compensation Table above.  </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13 </FONT></P>


<!-- MARKER PAGE="; page: 16" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>



<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DIRECTOR COMPENSATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
2006 Company directors were not paid cash for their services. Commencing in February 2007
the outside independent directors began receiving cash compensation of $500 per month
which was increased to $1,000 each per month effective February 1, 2008. Our independent
directors typically receive a stock option upon joining and additional options over time,
generally annually. As of January 1, 2008 Greg Pusey receives a salary of $150,000
annually for his active role as Chairman a position he has held since September 2003. The
directors are reimbursed for all expenses incurred by them in attending board meetings. </FONT></P>




<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>

     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Fees Earned or Paid<BR>
in Cash ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Stock Awards<BR>
($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Option Awards ($)</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN="1"><FONT FACE="Times New Roman, Times, Serif" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Non-Equity<BR>
Incentive Plan<BR>
Compensation</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN="1" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=1>All Other<BR>
Compensation</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman, Times, Serif" SIZE=1>Total</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="25%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gregory Pusey</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 225,000</FONT></TD>
        <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>     35,889</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="9%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD WIDTH="10%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 260,889</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gail Schoettler</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,500 </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 59,105</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>64,605 </FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Douglas Hepler</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,500 </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 59,105</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="Right"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>57,000</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 121,605</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>


<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>David Welch</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5,500 </FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 59,105</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 69,605</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>







<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In January 2008, Mr. Pusey&#146;s was
awarded with a cash bonus for the 2007 year of $125,000 that was paid to him in 2008 and
his salary increased from $100,000 to $150,000 per year. In January 2008, Ms. Schoettler,
Mr. Hepler, and Mr. Welch&#146;s compensation increased to $1,000 per month and each of
these individuals were granted 50,000 options each at $6.63, vesting three years in
arrears and expiring in ten years. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Mr.
          Hepler received consulting fees, of $57,000, paid to his consulting firm, for
          his services providing consulting and liaison services between the Scientific
          Advisory Board and the board of directors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On March 27, 2008 Dr. Ratain was
appointed to our Board of Directors. Upon his appointment he was granted an option to
purchase 66,313 shares of our common stock. The option vests on a pro-rata basis over
three years from the date of grant. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><I>Agreements with Management</I> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR"  -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We entered into an employment
agreement with Richard G. Donnelly, initially providing annual compensation of $150,000.
Mr. Donnelly&#146;s compensation was increased to $200,000 per year effective January
2006, to $225,000 effective February, 2007 and to $250,000 effective January 2008. The
agreement, as amended provides for his services to the Company until February 2009 and
automatically renews at the end of each year unless terminated by either party. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14 </FONT></P>


<!-- MARKER PAGE="; page: 17" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Benefit Plans.</U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2002 Stock Incentive Plan </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In April 2002, we adopted our 2002
Stock Incentive Plan. The purpose of the plan is to promote our interests and the
interests of our shareholders by providing participants a significant stake in our
performance and providing an opportunity for the participants to increase their holdings
of our common stock. The plan is administered by the Option Committee, which consists of
the Board or a committee of the Board, as the Board may from time to time designate,
composed of not less than two members of the Board, each of who shall be a director who is
not employed by us. The Option Committee has the authority to select employees and
consultants (which may include directors) to receive awards, to determine the number of
shares of common stock covered by awards and to set the terms and conditions of awards.
The plan, as amended authorizes the grant of options to purchase up to 4,250,000 shares of
our common stock. As of April 19, 2008 we have outstanding options to purchase 3,728,689
shares. The options are exercisable at prices ranging from $.60 to $10.84 per share for a
term of ten years. In addition to stock options, we may also offer a participant a right
to purchase shares of common stock subject to such restrictions and conditions as the
Option Committee may determine at the time of grant. Such conditions may include continued
services to us or the achievement of specified performance goals or objectives. No common
stock has been issued pursuant to the plan. During 2007, the Company granted a total of
416,000 options to employees, directors and consultants under the Plan, generally vesting
over three years in arrears, exercisable at an average of $3.31 per share and expiring in
ten years. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Equity Compensation Plan
Information</U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table gives information about the Company&#146;s common stock that may be issued
upon the exercise of options under the 2002 Stock Option Plan as of December 31, 2007. </FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><FONT FACE="Times New Roman" SIZE=1>Plan Category</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Number of securities to be issued<BR>
upon exercise<BR>
of outstanding<BR>
options</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Weighted average exercise<BR>
price of outstanding<BR>
options</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=2><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN="1" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=1>Number of securities<BR>
remaining available for<BR>
future issuance</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH="53%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Equity compensation plans approved</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="3%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="10%" ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;by security holders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>3,347,376</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>   $&nbsp;&nbsp; 1.29</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>902,624</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Equity compensation plans not</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;&nbsp;approved by security holders</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>$&nbsp;&nbsp;&#151;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>&#151;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Total</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>3,347,376</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2> $&nbsp;&nbsp;   1.29</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="CENTER"><FONT FACE="Times New Roman" SIZE=2>902,624</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<!-- MARKER FORMAT-SHEET="Footnote Rule-TNR" FSL="Project" -->
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15 </FONT></P>


<!-- MARKER PAGE="; page: 18" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition to the stock options
discussed above, the Company periodically issues non-qualified options and warrants for
services for which the Company generally does not seek shareholder approval. Through
December 31, 2007, the Company had outstanding 834,800 non-qualified options in connection
with consulting agreements for investor relations and placement agent services. Such
options include 180,000 that were issued in 2007 and where vested upon issuance. Of the
outstanding options, 399,800 are exercisable at $1.07 per share and expire in January
2009. Of the remaining 435,000 options, 75,000 are exercisable at $1.00 per share and
expire in 2008, 180,000 are exercisable at $1.80 per share and expire in 2009, 105,000 are
exercisable at a weighted average of $6.00 per share and expire in 2010 and 75,000 are
exercisable at $9.15 per share and expire in 2010. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INDEPENDENT PUBLIC
ACCOUNTANTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Audit Committee selected the independent accounting firm of GHP Horwath, P.C.
(&#147;GHP&#148;) with respect to the audit of our financial statements for the year ended
December 31, 2007. A representative of GHP is expected to be present at the Annual Meeting
and will have the opportunity to make a statement if he or she desires to do so, and will
be available to answer questions from shareholders. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Audit
Fees</U>. &nbsp;&nbsp;Our principal accountant, GHP, billed us aggregate fees in the amount of
approximately $46,150 for the year ended December 31, 2007 and approximately $46,375 for
the year ended December 31, 2006. These amounts were billed for professional services that
GHP provided for the audit of our annual financial statements, review of the financial
statements included in our report on 10-QSB, review of our securities offerings and other
services typically provided by an accountant in connection with statutory and regulatory
filings or engagements for those fiscal years. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Audit-Related
Fees</U>. &nbsp;&nbsp;GHP billed us aggregate fees in the amount of $0 for the years ended December
31, 2007 and 2006 for assurance and related services that were reasonably related to the
performance of the audit or review of our financial statements. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Tax
Fees</U>. We did not incur fees for the years ended December 31, 2007 and 2006 for tax
compliance, tax advice, and tax planning. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Financial
Information Systems Design and Implementation Fees</U>. &nbsp;&nbsp;We do not have an information
system or a local area network. Moreover, we do not have a hardware or software system
that aggregates source data underlying the financial statements or generates information
that is significant to our financial statements taken as a whole, nor did we engage our
principal accountant to design, develop or implement any such system. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>All
Other Fees. </U>&nbsp;&nbsp;GHP billed us aggregate fees in the amount of $0 for the years ended
December 31, 2007 and 2006 for other fees. </FONT> </P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16 </FONT></P>


<!-- MARKER PAGE="; page: 19" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>


<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
audit committee has considered the information described in &#147;<I>Financial Information
Systems Design and Implementation </I>Fees&#148; and &#147;<I>All Other Fees</I>&#148;
above and believes that it is compatible with maintaining the principal accountant&#146;s
independence. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
principal accountant (through its full time employees) performed all work regarding the
audit of our financial statements for the most recent fiscal year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pre-approval policies and procedures of the audit committee are described in the Audit
Committee Charter. The audit committee pre approved 100% of the services described under
&#147;Tax Fees.&#148; No pre-approval was required under &#147;Audit-Related Fees&#148;
and &#147;All Other Fees&#148; as no services were performed by GHP and no fees incurred. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL ON<BR>EELECTION
 OF DIRECTORS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors is nominating the six current Directors for reelection. The number of
Directors on the Company&#146;s Board of Directors has been established under the Bylaws
of the Company at a maximum of ten directors. Each Director serves for a one year term or
until his or her successor is elected and qualified. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>Nominees for Election of
Directors</U> </FONT> </H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
persons named in the enclosed form of Proxy will vote the shares represented by such Proxy
for the election of the six nominees for Director named below. If, at the time of the
Meeting, any of these nominees shall become unavailable for any reason, which event is not
expected to occur, the persons entitled to vote the Proxy will vote for such substitute
nominee or nominees, if any, as they determine in their sole discretion. If elected,
Gregory Pusey, Richard Donnelly, Gail Schoettler, Douglas Hepler, David Welch, and Mark
Ratain will each hold office a term of one year, until their successors are duly elected
or appointed or until their earlier death, resignation or removal. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR"  -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends a vote &#147;FOR&#148; the election of Messrs. Pusey,
Donnelly, Hepler, Welch, and Ratain and Ms. Schoettler to the Board of Directors. Unless
otherwise specified, the enclosed proxy will be voted &#147;FOR&#148; the election of the
Board of Directors&#146; slate of nominees. Neither Management nor the Board of Directors
of the Company is aware of any reason which would cause any nominee to be unavailable to
serve as a Director. Discretionary authority may be exercised by the proxy holders named
in the enclosed proxy to vote for a substitute nominee proposed by the Board of Directors
if any nominee becomes unavailable for election. At this time, the Board knows of no
reason why any nominee might be unavailable to serve. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17 </FONT></P>


<!-- MARKER PAGE="; page: 20" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>



<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL TWO <BR>ADOPTION OF AN
AMENDMENT TO THE 2002 INCENTIVE STOCK PLAN </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
April 3, 2002, the Board of Directors of the Company adopted the 2002 Incentive Stock Plan
(the &#147;Plan&#148;), under which a maximum of 900,000 shares of Common Stock were
reserved to be issued under a &#147;Right to Purchase&#148; or upon the exercise of
options (&#147;Options&#148;). In May 2004 the number of shares reserved under the Plan
was increased to 1,500,000, in June 2005 the number of shares reserved was increased to
3,500,000, and in June 1, 2007 the number of shares reserved was increased to 4,250,000.
Finally, on March 27, 2008, the Board of Directors of the Company adopted an amendment to
the Plan (the &#147;Amendment&#148;) increasing the maximum number of shares reserved
under the Plan from 4,350,000 to 4,600,000. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan includes: (i) options intended to qualify as &#147;incentive stock options&#148;
(&#147;Incentive Options&#148;) under Section 422 of the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;); (ii) non-incentive stock options which are not intended to
qualify as Incentive Options (&#147;Non-Incentive Options&#148;); and (iii) shares
issuable under a &#147;Right to Purchase.&#148; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder
approval of the March 27, 2008 Amendment is sought to qualify it under Rule 16b-3 of the
Securities and Exchange Act of 1934, as amended (the &#147;Act&#148;), and thereby render
certain transactions under it exempt from certain provisions of Section 16 of the Act, to
permit the issuance of Options which will qualify as Incentive Options pursuant to the
Code, and to ensure compliance with Nasdaq Marketplace Rule 4350. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan is intended to provide incentives to officers, directors, employees and other
persons, including consultants and advisers, who contribute to the success of the Company
by offering them the opportunity to acquire an ownership interest in it. The Board of
Directors believes that this also will help to align the interests of the Company&#146;s
management and employees with the interests of shareholders. The terms of the Plan
concerning the Incentive Options and Non-Incentive Options are substantially the same
except that only employees of the Company are eligible to receive Incentive Options;
employees and other persons are eligible to receive Non-Incentive Options. The number of
shares reserved for issuance under the Plan is a maximum aggregate so that the number of
Incentive Options and/or Non-Incentive Options that may be granted reduces the number of
Rights to Purchase which may be granted, and vice versa. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR"  -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth summary information as to unexercised options granted under the
Plan as of December 31, 2007. However, to date no options have been granted from the
increased number shares of shares now reserved under the Plan by the Amendment adopted on
March 27, 2008. </FONT></P>

<!-- MARKER FORMAT-SHEET="Page Number Center" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18 </FONT></P>


<!-- MARKER PAGE="; page: 21" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>
<DIV STYLE="page-break-after:always"></DIV>




<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN="1" ALIGN="Left"><FONT FACE="Times New Roman" SIZE=1>Name and Position</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1>Number of Options</FONT><HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE></TH>
     <TH COLSPAN=1><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=78% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Richard G. Donnelly -</FONT></TD>
     <TD WIDTH=1% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=14% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>President, Chief Executive Officer and Director</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>675,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Jeffrey G. McGonegal - Chief Financial Officer</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>400,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Current Executives as a Group</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>1,075,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Non-Executive Director Group</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>1,250,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Non-Executive Officer Employee Group</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>594,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>
<BR>




<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Administration of the Plan</I></U> </FONT> </P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Plan is administered by the Committee, which may consist of either (i) a committee,
composed of at least two non-employee directors, appointed by the Company&#146;s Board of
Directors, or (ii) if no Committee has been appointed, the Company&#146;s Board of
Directors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to determining who will be granted Options or Rights to Purchase, the Committee
has the authority and discretion to determine when Options and Rights to Purchase will be
granted and the number of Options and Rights to Purchase to be granted. The Committee also
may determine a vesting and/or forfeiture schedule for Rights to Purchase and/or Options
granted, the time or times when each Option becomes exercisable, the duration of the
exercise period for Options and the form or forms of the agreements, certificates or other
instruments evidencing grants made under the Plan. The Committee may determine the
purchase price of the shares of Common Stock covered by each Option and determine the Fair
Market Value per share. The Committee also may impose additional conditions or
restrictions not inconsistent with the provisions of the Plan. The Committee may adopt,
amend and rescind such rules and regulations as in its opinion may be advisable for the
administration of the Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee also has the power to interpret the Plan and the provisions in the instruments
evidencing grants made under it, and is empowered to make all other determinations deemed
necessary or advisable for the administration of it. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Eligibility</I></U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participants
in the Plan may be selected by the Committee from employees, officers and directors of,
and consultants and advisors to, the Company and its subsidiary and affiliated companies,
if any. The Committee may take into account the duties of persons selected, their present
and potential contributions to the success of the Company and such other considerations as
the Committee deems relevant to the purposes of the Plan. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
grant of Options or Rights to Purchase under the Plan does not confer any rights with
respect to continuation of employment, and does not interfere with the right of the
recipient or the Company to terminate the recipient&#146;s employment, although a specific
grant of Options or Rights to Purchase may provide that termination of employment or
cessation of service as an employee, officer, director, or consultant may result in
forfeiture or cancellation of all or a portion of the Rights to Purchase, the underlying
restricted stock, or Options. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19 </FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Adjustment</I></U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event a change, such as a stock split, is made in the Company&#146;s capitalization
which results in an exchange or other adjustment of each share of Common Stock for or into
a greater or lesser number of shares, appropriate adjustments will be made to unvested
Rights to Purchase, and in the exercise price and in the number of shares subject to each
outstanding Option. The Committee also may make provisions for adjusting the number of
Rights to Purchase or underlying outstanding Options in the event the Company effects one
or more reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of the Company&#146;s outstanding Common Stock. Options and Rights to
Purchase may provide that in the event of the dissolution or liquidation of the Company, a
corporate separation or division or the merger or consolidation of the Company, the holder
may exercise the Option on such terms as it may have been exercised immediately prior to
such dissolution, corporate separation or division or merger or consolidation; or in the
alternative, the Committee may take no action and provide that each Option granted under
the Plan shall terminate as of a date fixed by the Committee. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Other Provisions</I></U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
exercise price of any Incentive Option granted under the Plan must be no less than 100% of
the &#147;fair market value&#148; of the Company&#146;s Common Stock on the date of grant.
Any Incentive Option granted under the Plan to a person owning more than 10% of the total
combined voting power of the Common Stock shall be at a price of no less than 110% of the
Fair Market Value per share on the date of grant. The exercise price of an Option may be
paid in cash, or if the exercise price exceeds $5,000, then in shares of the
Company&#146;s Common Stock with a fair market value equal to the exercise price of the
Option. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Income Tax Consequences
of the Plan</I></U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Incentive Options issuable under the Plan are structured to qualify for favorable tax
treatment to recipients provided by Section 422 of the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;). Pursuant to Section 422 of the Code, Optionees will not be
subject to federal income tax at the time of the grant or at the time of exercise of an
Incentive Option. In addition, provided that the stock underlying the Option is not sold
within two years after the grant of the Option and is not sold within one year after the
exercise of the Option, then the difference between the exercise price and the sales price
will be treated as long-term capital gain or loss. An Optionee also may be subject to the
alternative minimum tax upon exercise of his Options. The Company will not be entitled to
receive any income tax deductions with respect to the granting or exercise of Incentive
Options or the sale of the Common Stock underlying the Options. The exercise price of
Incentive Options granted cannot be less than the fair market value of the underlying
Common Stock on the date the Options were granted. In addition, the aggregate fair market
value (determined as of the date an Option is granted) of the Common Stock underlying the
Options granted to a single employee which become exercisable in any single calendar year
may not exceed the maximum permitted by the Internal Revenue Code for Incentive Options.
This amount currently is $100,000. No Incentive Option may be granted to an employee who,
at the time the Option would be granted, owns more than ten percent of the outstanding
stock of the Company unless the exercise price of the Options granted to the employee is
at least 110 percent of the fair market value of the stock subject to the Option and the
Option is not exercisable more than five years from the date of grant. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20 </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-Incentive
Options will not qualify for the special tax benefits given to Incentive Options under
Section 422 of the Code. An Optionee does not recognize any taxable income at the time he
or she is granted a Non-Incentive Option. However, upon exercise of the Option, the
Optionee recognizes ordinary income for federal income tax purposes measured by the
excess, if any, of the then fair market value of the shares over the exercise price. The
ordinary income recognized by the Optionee will be treated as wages and will be subject to
income tax withholding by the Company. Upon an Optionee&#146;s sale of shares acquired
pursuant to the exercise of a Non-Incentive Option, any difference between the sale price
and the fair market value of the shares on the date when the Option was exercised will be
treated as long-term or short-term capital gain or loss. Upon an Optionee&#146;s exercise
of a Non-Incentive Option, the Company will be entitled to a tax deduction in the amount
recognized as ordinary income to the Optionee provided that the Company effects
withholding with the respect to the deemed compensation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to Rights to Purchase, generally, a grantee will recognize as ordinary income the
fair market value of the restricted stock received upon purchasing the shares to the
extent the Fair Market Value exceeds the purchase price. </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><I>Vote Required;
Recommendation of the Board of Directors</I></U> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proposal
Two requires the affirmative vote of a majority of the votes cast by the holders of shares
entitled to vote. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends that shareholders vote &#147;FOR&#148; the adoption of the
Amendment, as it provides a means of compensating management and employees of the Company
without utilizing the Company&#146;s cash resources. Moreover, the Board of Directors
believes that the Amendment will better align the interests of the Company&#146;s
employees, officers, directors, consultants and advisors with the interests of the
Company&#146;s shareholders by providing for increased share ownership which will provide
an additional incentive for those persons to work for the success of the Company and to
maximize shareholder value. In addition, the Board of Directors believes that the
Amendment provides an incentive for those persons to put forth maximum efforts for the
Company&#146;s success in order to maximize the value of the compensation provided to them
through the Rights to Purchase and Options. </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNUAL REPORT TO
SHAREHOLDERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Included
with this Proxy Statement is the Company&#146;s 2007 Annual Report on Form 10-KSB for the
year ended December 31, 2007. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER MATTERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management
and the Board of Directors of the Company know of no matters to be brought before the
Meeting other than as set forth herein. However, if any such other matters properly are
presented to the shareholders for action at the Meeting and any adjournments or
postponements thereof, it is the intention of the proxy holder named in the enclosed proxy
to vote in his discretion on all matters on which the shares represented by such proxy are
entitled to vote. </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21 </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DELIVERY OF DOCUMENTS TO
SHAREHOLDERS SHARING AN ADDRESS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
one proxy statement and annual report is being delivered to shareholders sharing an
address unless we have received contrary instructions from one or more of the
shareholders. Upon the written or oral request of a shareholder, we will deliver promptly
a separate copy of the proxy statement and annual report to a shareholder at a shared
address to which a single copy was delivered. Shareholders desiring to receive a separate
copy in the future may contact us through at our corporate offices at 1585 South Perry
Street, Castle Rock, CO 80104, or by telephone: (303) 794-2000. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
who share an address but are receiving multiple copies of the proxy statement and/or
annual report may contact us through our corporate offices at 1585 South Perry Street,
Castle Rock, CO 80104, or by telephone: (303) 794-2000 to request that a single copy be
delivered. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SHAREHOLDER PROPOSALS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>AspenBio
Pharma expects to hold its next annual meeting of shareholders in June 2008. Proposals
from shareholders intended to be present at the next Annual Meeting of shareholders should
be addressed to AspenBio Pharma Inc., Attention: Corporate Secretary, 1585 S. Perry
Street, Castle Rock, Colorado, 80104 and we must receive the proposals by December 27,
2008. Upon receipt of any such proposal, we shall determine whether or not to include any
such proposal in the Proxy Statement and proxy in accordance with applicable law. It is
suggested that shareholders forward such proposals by Certified Mail-Return Receipt
Requested. After December 27, 2008 any shareholder proposal submitted outside the process
of Rule 14a-8 will be considered to be untimely.</B> </FONT></P>











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     <TD WIDTH="30%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="70%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>BY ORDER OF THE BOARD OF DIRECTORS</B>:<BR>
<BR>
<BR>
ASPENBIO PHARMA, INC.<BR>
Gregory Pusey, Chairman </FONT>
</TD></TR>
</TABLE>
<BR><BR><BR><BR>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22 </FONT></P>






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<HR SIZE="2" COLOR="Black">

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY </FONT></H1>

<HR SIZE="2" COLOR="Black">



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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ASPENBIO PHARMA, INC.<BR>
</B>1585 South Perry Street<BR>
Castle Rock, Colorado 80104<BR>
(303) 794-2000 </FONT> </P>




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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNUAL MEETING OF
SHAREHOLDERS &#150; JUNE 9, 2008 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned shareholder of AspenBio Pharma, Inc. hereby constitutes and appoints Gregory
Pusey and Richard Donnelly, or either of them, as attorneys and proxies to appear, attend
and vote all of the shares of Common Stock and/or standing in the name of the undersigned
at the Annual Meeting of Shareholders to be held at the Wingate Inn, 8000 East Peakview
Avenue, Greenwood Village, Colorado 80111 on June 9, 2008, at 3:30 p.m. local time, and at
any adjournment or adjournments thereof, upon the following: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Proposal
One</U>:&nbsp;&nbsp; To elect the following six persons as directors to hold office until the next
annual meeting of shareholders and until their successors have been elected and qualified: </FONT></P>











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     <TH></TH>
     <TH></TH>
     <TH></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD WIDTH="25%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gregory Pusey        <BR>
Richard G. Donnelly  <BR>
Gail S. Schoettler   <BR>
Douglas I. Hepler    <BR>
David E. Welch       <BR>
Mark J. Ratain, M.D.
</FONT></TD>
     <TD WIDTH="10%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">For /__/ <BR>
For /__/ <BR>
For /__/ <BR>
For /__/ <BR>
For /__/ <BR>
For /__/
</FONT></TD>
     <TD WIDTH="55%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Withhold Authority to vote /__/ <BR>
Withhold Authority to vote /__/ <BR>
Withhold Authority to vote /__/ <BR>
Withhold Authority to vote /__/ <BR>
Withhold Authority to vote /__/ <BR>
Withhold Authority to vote /__/
</FONT></TD></TR>
</TABLE>
<BR>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Proposal
Two</U>: &nbsp;&nbsp;Approval of an amendment to the 2002 Incentive Stock Plan, pursuant to which the
number of reserved shares will be increased from 4,250,000 to 4,600,000. </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For /__/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
           Against /__/
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           Abstain /__/ </FONT></P>






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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
their discretion, the Proxy is authorized to vote upon such other business as lawfully may
come before the Meeting. The undersigned hereby revokes any proxies as to said shares
heretofore given by the undersigned and ratifies and confirms all that said proxy lawfully
may do by virtue hereof. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THE
SHARES REPRESENTED HEREBY WILL BE VOTED AS SPECIFIED HEREON WITH RESPECT TO THE ABOVE
PROPOSALS, BUT IF NO SPECIFICATION IS MADE THEY WILL BE VOTED FOR ALL DIRECTOR NOMINEES
AND <U>FOR</U> THE OTHER PROPOSALS LISTED ABOVE. UNLESS OTHERWISE SPECIFIED, THIS PROXY
WILL BE VOTED IN ACCORDANCE WITH THE DISCRETION OF THE PROXY ON ANY OTHER BUSINESS.</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please
mark, date and sign exactly as your name appears hereon, including designation as
executor, Trustee, etc., if applicable, and return the Proxy in the enclosed postage-paid
envelope as promptly as possible. It is important to return this Proxy properly signed in
order to exercise your right to vote if you do not attend the meeting and vote in person.
A corporation must sign in its name by the President or other authorized officer. <B>All
co-owners and each joint owner must sign.</B> </FONT></P>



















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     <TD WIDTH="40%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:  _______________________<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR>

</FONT></TD>
     <TD WIDTH="60%"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">_____________________________________<BR>
Signature(s)<BR>
<BR>
Address if different from that on envelope:<BR>
<BR>
_____________________________________<BR>
Street Address<BR>
<BR>
_____________________________________<BR>
City, State and Zip Code
</FONT></TD></TR>
</TABLE>
<BR><BR><BR><BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please check if you intend to be
present at the meeting: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P>


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