<SEC-DOCUMENT>0001144204-12-020437.txt : 20120406
<SEC-HEADER>0001144204-12-020437.hdr.sgml : 20120406
<ACCEPTANCE-DATETIME>20120405173355
ACCESSION NUMBER:		0001144204-12-020437
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20120406
DATE AS OF CHANGE:		20120405

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TRANSGENOMIC INC
		CENTRAL INDEX KEY:			0001043961
		STANDARD INDUSTRIAL CLASSIFICATION:	LABORATORY ANALYTICAL INSTRUMENTS [3826]
		IRS NUMBER:				911789357
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-180242
		FILM NUMBER:		12746623

	BUSINESS ADDRESS:	
		STREET 1:		12325 EMMET ST
		CITY:			OMAHA
		STATE:			NE
		ZIP:			68164
		BUSINESS PHONE:		4027385480

	MAIL ADDRESS:	
		STREET 1:		12325 EMMET STREET
		CITY:			OMAHA
		STATE:			NE
		ZIP:			68164
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>v308704_424b3.htm
<DESCRIPTION>FORM 424B3
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Filed Pursuant to Rule 424(b)(3)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No. 333-180242</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>PROSPECTUS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">33,000,000 SHARES OF COMMON STOCK</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt">TRANSGENOMIC,
INC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus relates
to the resale by the investors listed in the section titled &ldquo;Selling Stockholders&rdquo;, and we refer to the investors as
the selling stockholders (the &ldquo;Selling Stockholders&rdquo;) of up to&nbsp;33,000,000 shares of our Common Stock, par value
$.01&nbsp;per share (the &ldquo;Common Stock&rdquo; or &ldquo;Common Shares&rdquo;). The Common Shares offered consist of: (i)&nbsp;up
to 22,000,000 Common Shares and (ii)&nbsp;up to&nbsp;11,000,000 Common Shares issuable upon exercise of outstanding warrants (the
&ldquo;Warrants&rdquo;). We issued the shares of our Common Stock and Warrants in connection with a private placement offering
in February&nbsp;2012. We are registering the resale of the Common Shares and the Common Shares underlying the Warrants as required
by the Registration Rights Agreement we entered into with the Selling Stockholders on February&nbsp;2, 2012 (the &ldquo;Registration
Rights Agreement&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
may offer and sell or otherwise dispose of our Common Shares described in this prospectus from time to time through public or private
transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiated prices. See
&ldquo;Plan of Distribution&rdquo; beginning on page&nbsp;7 for more information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will not receive
any of the proceeds from the Common Stock sold by the Selling Stockholders, other than any proceeds from the cash exercise of Warrants
to purchase shares of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have agreed to pay
certain expenses in connection with this registration statement and to indemnify the Selling Stockholders against certain liabilities.
The Selling Stockholders will pay all underwriting discounts and selling commissions, if any, in connection with the sale of the
shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Common Stock is
traded on the OTC Bulletin Board under the symbol &ldquo;TBIO.&rdquo; On March 30, 2012, the last reported sale price of our Common
Stock was $1.20 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Investing in the Securities involves a
high degree of risk. See the section entitled &ldquo;Risk Factors&rdquo; beginning on page&nbsp;5 of this prospectus, and the section
entitled &ldquo;Risk Factors&rdquo; in our most recent Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2011
filed with the Securities and Exchange Commission, which is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Neither the Securities and Exchange Commission
nor any state securities commission or other regulatory body has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The date of this prospectus is April 6,
2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TRANSGENOMIC, INC.<BR>
Index to Prospectus</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; text-indent: 0in; tab-stops: right dotted 550.0pt">About this Prospectus</TD>
    <TD STYLE="width: 10%; text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right; padding-left: 0.12in">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">A Warning about Forward-Looking Statements</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Prospectus Summary</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">The Offering</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">5</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Risk Factors</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">5</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Use of Proceeds</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Determination of Offering Price</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Plan of Distribution</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Selling Stockholders</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Description of Common Stock</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">United States Federal Income Tax Considerations</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Legal Matters</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">24</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Experts</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">24</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Where You Can Find Additional Information</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">24</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt">Incorporation of Certain Information by Reference</TD>
    <TD STYLE="text-indent: 0in; tab-stops: right dotted 550.0pt; text-align: right">24</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">About this
Prospectus</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You should rely only
on the information contained or incorporated by reference in this prospectus. Neither we nor the Selling Stockholders have authorized
anyone to provide you with information that is different from such information. If anyone provides you with different or inconsistent
information, you should not rely on it. The Selling Stockholders are offering to sell Common Stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on its cover page
regardless of the time of delivery of this prospectus or any sale of the Common Stock. In case there are differences or inconsistencies
between this prospectus and the information incorporated by reference, you should rely on the information in the document with
the latest date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
are offering the Common Stock only in jurisdictions where such issuances are permitted. The distribution of this prospectus and
the issuance of the Common Stock in certain jurisdictions may be restricted by law. Persons outside the United States who come
into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the issuance of the
Common Stock and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation of an offer to buy, the Common Stock offered by this prospectus
by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is important for
you to read and consider all of the information contained in this prospectus in making your investment decision. To understand
the offering fully and for a more complete description of the offering you should read this entire document carefully, including
particularly the &ldquo;Risk Factors&rdquo; section beginning on page&nbsp;5. You also should read and consider the information
in the documents to which we have referred you in the sections entitled &ldquo;Where You Can Find Additional Information&rdquo;
and &ldquo;Incorporation of Certain Information by Reference&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As used in this prospectus,
unless the context requires otherwise, the terms &ldquo;we&rdquo;, &ldquo;us&rdquo;, &ldquo;our&rdquo;, or &ldquo;the Company&rdquo;
refer to Transgenomic, Inc. and its subsidiaries on a consolidated basis. References to &ldquo;Selling Stockholders&rdquo; refers
to those stockholders listed herein under &ldquo;Selling Stockholders&rdquo; and their successors, assignees and permitted transferees.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">A Warning
about Forward-Looking Statements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This prospectus contains
forward-looking statements within the meaning of Section&nbsp;27A of the Securities Act of&nbsp;1933, as amended (the &ldquo;Securities
Act&rdquo;), and Section&nbsp;21E of the Securities Exchange Act of&nbsp;1934, as amended (the &ldquo;Exchange Act&rdquo;), about
the Company and its subsidiaries. These forward-looking statements are intended to be covered by the safe harbor for forward-looking
statements provided by the Private Securities Litigation Reform&nbsp;Act of&nbsp;1995. Forward-looking statements are not statements
of historical fact, and can be identified by the use of forward-looking terminology such as &ldquo;believes&rdquo;, &ldquo;expects&rdquo;,
&ldquo;may&rdquo;, &ldquo;will&rdquo;, &ldquo;could&rdquo;, &ldquo;should&rdquo;, &ldquo;projects&rdquo;, &ldquo;plans&rdquo;,
&ldquo;goal&rdquo;, &ldquo;targets&rdquo;, &ldquo;potential&rdquo;, &ldquo;estimates&rdquo;, &ldquo;pro forma&rdquo;, &ldquo;seeks&rdquo;,
&ldquo;intends&rdquo;, or &ldquo;anticipates&rdquo; or the negative thereof or comparable terminology. Forward-looking statements
include discussions of strategy, financial projections, guidance and estimates (including their underlying assumptions), statements
regarding plans, objectives, expectations or consequences of various transactions, and statements about the future performance,
operations, products and services of the Company and its subsidiaries. We caution our stockholders and other readers not to place
undue reliance on such statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our businesses and
operations are and will be subject to a variety of risks, uncertainties and other factors. Consequently, actual results and experience
may materially differ from those contained in any forward-looking statements. Such risks, uncertainties and other factors that
could cause actual results and experience to differ from those projected include, but are not limited to, the risk factors set
forth in the section entitled &ldquo;Risk Factors&rdquo; beginning on page&nbsp;5 of this prospectus and elsewhere in the documents
incorporated by reference in this prospectus, including our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31,
2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All written or oral
forward-looking statements attributable to us or any person acting on our behalf made after the date of this prospectus are expressly
qualified in their entirety by the risk factors and cautionary statements contained in and incorporated by reference into this
prospectus. Unless legally required, we do not undertake any obligation to release publicly any revisions to such forward-looking
statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The Offering</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Prospectus
Summary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The following summary
highlights selected information contained elsewhere in this prospectus and in the documents incorporated by reference in this prospectus
and does not contain all the information you will need in making your investment decision. You should read carefully this entire
prospectus and the documents incorporated by reference in this prospectus before making an investment decision. This prospectus
provides you with a general description of Transgenomic, the Common Stock issuable under this prospectus and the offering. </I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Business</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Transgenomic, Inc.
is a global biotechnology company advancing personalized medicine in the detection and treatment of cancer and inherited diseases
through its proprietary molecular technologies and world-class clinical and research services. Our operations are organized and
reviewed by management along its product lines and presented in the three complementary business segments.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Clinical Laboratories. Our clinical laboratories specialize in genetic testing for cardiology,
neurology, mitochondrial disorders, and oncology. Located in New Haven, Connecticut and Omaha, Nebraska the molecular clinical
reference laboratories are certified under the Clinical Laboratory Improvement Amendment (CLIA)&nbsp;as high complexity labs and
our Omaha facility is also accredited by the College of American Pathologists (CAP).</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Pharmacogenomics Services. Our Contract Research Organization located in Omaha, Nebraska provides
pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted by our pharmaceutical customers.
This lab specializes in pharmacogenomic, biomarker and mutation discovery research serving the pharmaceutical and biomedical industries
worldwide for disease research, drug and diagnostic development and clinical trial support.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Diagnostic Tools. Our proprietary product is the WAVE&reg; System which has broad applicability
to genetic variation detection in both molecular genetic research and molecular diagnostics. There is a worldwide installed base
of over&nbsp;1,500 WAVE Systems as of December&nbsp;31, 2011. We also distribute bioinstruments produced by other manufacturers
(&ldquo;OEM Equipment&rdquo;) through our sales and distribution network. Service contracts to maintain installed systems are sold
and supported by our technical support personnel. The installed WAVE base and some OEM Equipment platforms generate a demand for
consumables that are required for the continued operation of the bioinstruments. We develop, manufacture and sell these consumable
products. In addition, we manufacture and sell consumable products that can be used on multiple, independent platforms. These products
include SURVEYOR&reg; Nuclease and a range of chromatography columns.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a complete description
of our business, financial condition, results of operations and other important information, we refer you to our filings with the
Securities and Exchange Commission (the &ldquo;SEC&rdquo;) that are incorporated by reference in this prospectus, including our
Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2011. For instructions on how to find copies of these documents,
see &ldquo;Where You Can Find Additional Information&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We were incorporated
in Delaware on March&nbsp;6, 1997. Our principal office is located at&nbsp;12325 Emmet Street, Omaha, Nebraska&nbsp;68164 and
our telephone phone number is&nbsp;402-452-5400. Our website address is <U>www.transgenomic.com</U>. Information on our website,
or that can be accessed through our website, is not incorporated by reference into this prospectus and does not constitute part
of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">The Offering</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 41%; font-weight: bold">Issuer</TD>
    <TD STYLE="width: 59%">Transgenomic, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Common Stock outstanding</TD>
    <TD>71,625,725 Common Shares<SUP>(1)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Common Stock, offered by the selling stockholders</TD>
    <TD>33,000,000 Common Shares<SUP>(2)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Common Stock outstanding after the offering</TD>
    <TD>82,625,725 Common Shares<SUP>(3)</SUP></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Use of proceeds</TD>
    <TD>We will not receive any proceeds from the sale of the Common Shares.&nbsp; We may, however, receive cash proceeds upon the cash exercise of Warrants, and we intend to use any such proceeds for general corporate and working capital purposes.&nbsp; See &ldquo;Use of Proceeds&rdquo; beginning on page&nbsp;6 of this prospectus.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Listing</TD>
    <TD>Our Common Stock is listed on the OTC Bulletin Board under the symbol &ldquo;TBIO&rdquo;.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Risk Factors</TD>
    <TD>You should consider carefully the matters set forth under &ldquo;Risk Factors&rdquo; beginning on page&nbsp;5 of this prospectus before deciding to purchase any of the Common Stock.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">The number of shares shown to be outstanding is based on the number of shares of our Common Stock
outstanding as of March&nbsp;13, 2012, and does not include shares issuable upon exercise of warrants (including the shares of
Common Stock underlying Warrants registered hereunder), shares issuable upon conversion of the outstanding shares of our Series
A Convertible Preferred Stock into shares of Common Stock or shares issuable upon exercise of outstanding options to acquire Common
Stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">The number of shares shown to be registered hereunder includes&nbsp;22,000,000 shares of Common
Stock outstanding and&nbsp;11,000,000 shares of Common Stock issuable upon exercise of Warrants.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">The number of shares outstanding after the offering assumes full cash exercise by the Selling Stockholders
of the&nbsp;11,000,000 shares of Common Stock issuable upon exercise of Warrants being registered hereunder and includes the Common
Shares issuable upon exercise of the Warrants, but excludes shares issuable upon exercise of other warrants, shares issuable upon
conversion of the outstanding shares of our Series A Convertible Preferred Stock into shares of Common Stock and shares issuable
upon exercise of outstanding options to acquire Common Stock.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Risk Factors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Ownership of the Common
Stock involves certain risks. You should consider carefully the risks and uncertainties described in, or incorporated by reference
in, this prospectus, including the risks described below and under the caption &ldquo;Risk Factors&rdquo; in our Annual Report
on Form&nbsp;10-K for the year ended December&nbsp;31, 2011, and in any other reports that we file with the SEC, along with the
other information included or incorporated by reference in this prospectus, in evaluating an investment in the Common Stock. The
information included or incorporated by reference in this prospectus may be amended, supplemented or superseded from time to time
by other reports we file with the SEC in the future. For a description of these reports and documents, and information about where
you can find them, see the sections entitled &ldquo;Where You Can Find Additional Information&rdquo; and Incorporation of Certain
Information by Reference&rdquo; in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The risks and uncertainties
described in this prospectus and the documents incorporated by reference in this prospectus are not the only ones facing us. Additional
risks and uncertainties that we do not presently know about or that we current believe are not material may also adversely affect
our business. If any of the risks and uncertainties described in this prospectus or the documents incorporated by reference herein
actually occur, our business, financial condition and results of operations could be adversely affected in a material way. This
could cause the trading price of our Common Stock to decline, perhaps significantly, and you may lose part or all of your investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our Common Stock is equity and therefore is subordinate
to our indebtedness and preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Common Stock is
an equity interest and does not constitute indebtedness of the Company. Consequently, our Common Stock ranks junior to all current
and future indebtedness of the Company and other non-equity claims against us with respect to assets available to satisfy claims
against us, including in the event of our liquidation or dissolution. We may, and our other subsidiaries may also, incur additional
indebtedness from time to time and may increase our aggregate level of outstanding indebtedness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, holders of
our Common Stock are subject to the prior dividend and liquidation rights of any holders of our preferred stock that may be outstanding
from time to time. Our Board of Directors has designated&nbsp;3,879,307 shares of our authorized preferred stock as Series A Convertible
Preferred Stock (the &ldquo;Series A Preferred&rdquo;) with certain rights, privileges and preferences which are senior to the
rights of the holders of our Common Stock. Our Board of Directors is authorized to cause us to issue additional classes or series
of preferred stock without any action on the part of our common stockholders. If we issue additional shares of Series A Preferred
or other preferred shares in the future that have a preference over our Common Stock with respect to the payment of dividends or
upon liquidation, or if we issue preferred shares with voting rights that dilute the voting power of our Common Stock, then the
rights of holders of our Common Stock or the market price of our Common Stock could be adversely affected.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sales of our shares issued in our recent private
placement may cause the market price of our shares to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February&nbsp;7,
2012, we issued&nbsp;22,000,000 shares of Common Stock and Warrants to purchase an additional&nbsp;11,000,000 shares of Common
Stock to investors. Pursuant to the Registration Rights Agreement with the Selling Stockholders, we are registering with the SEC&nbsp;33,000,000
of those shares and warrant shares for resale as described in this prospectus. The shares issued on February&nbsp;7, 2012 represent
approximately&nbsp;40% of our issued and outstanding shares of Common Stock, assuming full cash exercise of the Warrants. Upon
effectiveness of this registration statement of which this prospectus is a part, these shares may be freely sold in the open market.
The sale of a significant amount of shares in the open market, or the perception that these sales may occur, could cause the trading
price of our Common Stock to decline or become highly volatile.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ability to use our net operating losses to offset
future taxable income will be subject to certain limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, under Section&nbsp;382
of the Internal Revenue Code of&nbsp;1986, as amended, or the Internal Revenue Code, a corporation that undergoes an &ldquo;ownership
change&rdquo; is subject to limitations on its ability to utilize its pre-ownership change net operating losses, or NOLs, to offset
future taxable income. Our existing NOLs will be subject to limitations arising from previous ownership changes, and if we undergo
an ownership change in the future, our ability to utilize NOLs could be further limited by Section&nbsp;382 of the Internal Revenue
Code. Furthermore, our ability to utilize NOLs of any companies that we may acquire in the future may be subject to limitations.
As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. &nbsp;federal
taxable income will be subject to limitations, which could potentially result in increased future tax liability to us. The purchase
of our Common Stock pursuant to this offering or acquisition of our Common Stock upon Warrant exercise could potentially cause,
or increase the risk of, an ownership change that triggers the Section&nbsp;382 limitation upon the utilization of our NOLs.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-U.S.&nbsp;holders may be subject to U.S.&nbsp;income
tax with respect to gain on disposition of their Common Stock or Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are or have been
a U.S.&nbsp;real property holding corporation at any time within the shorter of the five-year period preceding a disposition of
Common Stock or a warrant by a non-U.S.&nbsp;holder or such holder&rsquo;s holding period of the stock disposed of, such non-U.S.&nbsp;holder
may be subject to United States federal income tax with respect to gain on such disposition. We believe that we are not currently,
and do not anticipate becoming, a &ldquo;United States real property holding corporation&rdquo; for U.S.&nbsp;federal income tax
purposes. Even if we are considered a U.S.&nbsp;real property holding corporation, an additional exception may exempt a non-U.S.&nbsp;holder&rsquo;s
gain on disposition of our Common Stock or Warrants from United States federal income tax. See section entitled &ldquo;United States
Federal Income Tax Considerations&rdquo; for further information.<B> </B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Use of Proceeds</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will receive no
proceeds from the sale of the Common Shares by the Selling Stockholders. We may, however, receive cash proceeds equal to the total
exercise price of any Warrants to the extent that the Warrants are exercised. The exercise price of the Warrants held by the Selling
Stockholders is $1.25&nbsp;per share of our Common Stock. The exercise price and the number of Common Shares issuable upon exercise
of the Warrants may be adjusted in certain circumstances, including stock splits, dividends, distributions or reclassifications,
and mergers, consolidations, statutory share exchanges, or other similar transactions. However, these Warrants contain a &ldquo;cashless
exercise&rdquo; feature that allows the holders, under certain circumstances, to exercise the Warrants without making a cash payment
to us. There can be no assurance any of these Warrants will be exercised by the Selling Stockholders at all or that these Warrants
will be exercised for cash rather than pursuant to the &ldquo;cashless exercise&rdquo; feature. To the extent we receive proceeds
from the cash exercise of the Warrants, we may use such proceeds to provide capital support or for general corporate purposes,
which may include, without limitation, supporting asset growth and engaging in acquisitions or other business combinations. We
do not have any specific plans for acquisitions or other business combinations at this time. Our management will retain broad discretion
in the allocation of the net proceeds from the exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will pay certain
expenses related to the registration of the shares of Common Stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Determination
of Offering Price</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
will determine at what price they may sell the offered shares, and such sales may be made at prevailing market prices, or at privately
negotiated prices.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Plan of
Distribution</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are registering
the shares of Common Stock previously issued to the Selling Stockholders and issuable upon exercise of the Warrants previously
issued to the Selling Stockholders to permit the resale of these shares of Common Stock by the holders of the Common Stock and
Warrants from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the Selling
Stockholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares
of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders,
or their pledges, donees, transferees, or any of their successors in interest selling shares received from a Selling Shareholder
as a gift, partnership distribution or other non-sale related transfer after the date of this prospectus, may sell all or a portion
of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the Selling Stockholders
will be responsible for underwriting discounts or commissions or agent&rsquo;s commissions. The shares of Common Stock may be sold
in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined
at the time of sale, or at negotiated prices. The Selling Stockholders will act independently of us in making decisions with respect
to the timing, manner and size of each sale. These sales may be affected in transactions, which may involve crosses or block transactions,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>in the over-the-counter market;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>in transactions otherwise than on these exchanges or systems or in the over-the-counter market;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>through the writing of options, whether such options are listed on an options exchange or otherwise;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>purchases by a broker-dealer as principal and resale by the broker-dealer for its account;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>an exchange distribution in accordance with the rules of the applicable exchange;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>privately negotiated transactions;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>short sales;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>through the distribution of the Common Stock by any Selling Stockholders to its partners, members or stockholders;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>through one or more underwritten offerings on a firm commitment or best efforts basis;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>sales pursuant to Rule&nbsp;144;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per
share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>a combination of any such methods of sale; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>any other method permitted pursuant to applicable law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Shareholders
may also transfer the Common Shares by gift.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Shareholders
may engage brokers and dealers, and any brokers or dealers may arrange for other brokers or dealers to participate in effecting
sales of the Common Shares. These brokers, dealers or underwriters may act as principals, or as an agent of a Selling Shareholder.
Broker-dealers may agree with a Selling Shareholder to sell a specified number of the Common Shares at a stipulated price per security.
If the broker-dealer is unable to sell the Common Shares acting as agent for a Selling Shareholder, it may purchase as principal
any unsold Common Shares at the stipulated price. Broker-dealers who acquire Common Shares as principals may thereafter resell
the Common Shares from time to time in transactions in any stock exchange or automated interdealer quotation system on which the
Common Shares are then listed, at prices and on terms then prevailing at the time of sale, at prices related to the then-current
market price or in negotiated transactions. Broker-dealers may use block transactions and sales to and through broker-dealers,
including transactions of the nature described above. The Selling Shareholders may also sell the Common Shares in accordance with
Rule&nbsp;144 under the Securities Act of&nbsp;1933, as amended, rather than pursuant to this prospectus, regardless of whether
the Common Shares are covered by this prospectus</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the Selling Stockholders
effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Stockholders
or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the Selling
Stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of
Common Stock in the course of hedging in positions they assume. The Selling Stockholders may also sell shares of Common Stock short
and deliver shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The Selling Stockholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may
sell such shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
may pledge or grant a security interest in some or all of the shares of Common Stock or Warrants owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock
from time to time pursuant to this prospectus or any amendment to this prospectus under Rule&nbsp;424(b)(3)&nbsp;or other applicable
provision of the Securities Act amending, if necessary, the list of Selling Stockholders to include the pledgee, transferee or
other successors in interest as Selling Stockholders under this prospectus. The Selling Stockholders also may transfer and donate
the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, a Selling
Shareholder may, from time to time, sell the Common Shares short, and, in those instances, this prospectus may be delivered in
connection with the short sales and the Common Shares offered under this prospectus may be used to cover short sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be &ldquo;underwriters&rdquo;
within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer
may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares
of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of
shares of Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents,
any discounts, commissions and other terms constituting compensation from the Selling Stockholders and any discounts, commissions
or concessions allowed or reallowed or paid to broker-dealers. The Selling Stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares of Common Stock against certain liabilities, including liabilities arising under
the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the securities
laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for
sale in such state or an exemption from registration or qualification is available and is complied with.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There can be no assurance
that any Selling Stockholder will sell any or all of the shares of Common Stock registered pursuant to the registration statement,
of which this prospectus forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Selling Stockholders
and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules
and regulations thereunder, including, without limitation, Regulation&nbsp;M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of Common Stock by the Selling Stockholders and any other participating person. Regulation&nbsp;M
may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making
activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will pay all expenses
of the registration of the shares of Common Stock pursuant to the Registration Rights Agreement, estimated to be $54,316 in total,
including, without limitation, SEC filing fees and expenses of compliance with state securities or &ldquo;Blue Sky&rdquo; laws;
<I>provided</I>,<I> however</I>, that a Selling Stockholder will pay all underwriting discounts and selling commissions, if any.
We will indemnify the Selling Stockholders against liabilities, including some liabilities under the Securities Act, in accordance
with the Registration Rights Agreement, or the Selling Stockholders will be entitled to contribution. We may be indemnified by
the Selling Stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with Registration
Rights Agreement, or we may be entitled to contribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Once sold under the
registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands
of persons other than our affiliates.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Selling
Stockholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have prepared this
prospectus to allow the Selling Stockholders or their successors, assignees or other permitted transferees to sell or otherwise
dispose of, from time to time, up to&nbsp;33,000,000 shares of our Common Stock. The&nbsp;33,000,000 shares includes the following:
(i)&nbsp;19,000,000 shares of our Common Stock issued pursuant to the Securities Purchase Agreement dated February&nbsp;2, 2012
(the &ldquo;Securities Purchase Agreement&rdquo;); (ii)&nbsp;9,500,000 shares of Common Stock issuable upon exercise of five-year
Warrants with an exercise price of $1.25 issued pursuant to the Securities Purchase Agreement; (iii)&nbsp;3,000,000 shares of Common
Stock issued to the entities associated with Third Security, LLC (the &ldquo;Third Security Entities&rdquo;) in connection with
the conversion of the convertible notes issued by us; and (iv)&nbsp;1,500,000 shares of Common Stock issuable to the Third Security
Entities upon exercise of Warrants on the same terms as the investors in the above-described private placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below presents
information regarding the Selling Stockholders and the shares of our Common Stock that they may sell or otherwise dispose of from
time to time under this prospectus. The table is based on information supplied to us by the Selling Stockholders. Percentages of
beneficial ownership are based upon&nbsp;98,142,953 shares of Common Stock issued and outstanding as of March&nbsp;13, 2012. Beneficial
ownership is determined under Section&nbsp;13(d)&nbsp;of the Exchange Act and generally includes voting or investment power with
respect to securities and including any securities that grant the Selling Stockholders the right to acquire Common Stock within&nbsp;60&nbsp;days
of March&nbsp;13, 2012. We do not know when or in what amounts the Selling Stockholders may sell or otherwise dispose of the shares
covered hereby. The Selling Stockholders might not sell any or all of the shares covered by this prospectus or may sell or dispose
of some or all of the shares other than pursuant to this prospectus. Because the Selling Stockholders may not sell or otherwise
dispose of some or all of the shares covered by this prospectus and because there are currently no agreements, arrangements or
understandings with respect to the sale or other disposition of any of the shares, we cannot estimate the number of the shares
that will be held by the Selling Stockholders after completion of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as provided
below, none of the Selling Stockholders has held any position or office or had any other material relationship with us or any of
our predecessors or affiliates within the past three years other than as a result of the ownership of our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name&nbsp;of&nbsp;Selling&nbsp;Stockholder</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Number&nbsp;of&nbsp;Shares<BR> of&nbsp;Common&nbsp;Stock<BR> Owned&nbsp;Prior&nbsp;to<BR> Offering<SUP>(1)</SUP></B></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Maximum&nbsp;Number&nbsp;of<BR> Shares&nbsp;of&nbsp;Common&nbsp;Stock<BR> to&nbsp;be&nbsp;Offered&nbsp;Pursuant<BR> to&nbsp;this&nbsp;Prospectus</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Number&nbsp;of&nbsp;Shares&nbsp;of&nbsp;Common&nbsp;Stock<BR> Owned&nbsp;After&nbsp;Offering<SUP>(2)</SUP></B></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Number</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center">Percent</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left">James E. Douglas III<SUP>(3)</SUP></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">600,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">600,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="width: 14%; text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="width: 1%; text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">&mdash; </TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">K&nbsp;&amp; M Douglas TR u/a dtd&nbsp;3/23/06. Kevin and Michelle Douglas TTEES<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,400,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,400,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom"></TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Douglas Irrev Descendants TR u/a dtd&nbsp;8/7/98 Kevin&nbsp;&amp; Michelle Douglas TTEES<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,980,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,980,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Douglas Family TR u/a dtd&nbsp;1/29/90 James and Jean Douglas TTEES<SUP>(3)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,020,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,020,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Special Situations Fund II QP, L.P.<SUP>(4)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,625,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,625,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Special Situations Private Equity Fund, L.P.<SUP>(4)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Special Situations Life Sciences Fund, L.P.<SUP>(4)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&nbsp; </TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash; </TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left">Third Security Incentive&nbsp;2010 LLC <SUP>(5)</SUP></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">4,052,626</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">900,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right; vertical-align: bottom">3,152,626</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right; vertical-align: bottom">3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Third Security Staff&nbsp;2010 LLC<SUP>(5)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,105,252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,800,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">6,305,252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Third Security Senior Staff&nbsp;2008 LLC<SUP>(5)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,105,252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,800,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">6,305,252</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Fidelity Select Portfolios: Biotechnology Portfolio<SUP>(6)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,811,882</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,257,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">554,882</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Fidelity Advisor Series VII: Fidelity Advisor Biotechnology Fund<SUP>(6)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">276,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">243,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">33,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Perceptive Life Sciences Master Fund Ltd.<SUP>(7)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Burguete Investment Partnership, LP<SUP>(8)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Robert G. Allison</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">255,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">255,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">William H. Baxter Trustee FBO William H. Baxter Revocable Trust u/a dtd&nbsp;7/3/96</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Gary A. Bergren</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">David&nbsp;&amp; Carole Brown TTEES FBO David&nbsp;&amp; Carole Brown Rev Tru/a dtd&nbsp;10/23/97</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dennis D. Gonyea</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Dorothy J. Hoel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dr.&nbsp;Paul&nbsp;&amp; Nancy Seel JtRos</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">E. Terry Skone TTEE E. Terry Skone Rev TR u/a dtd&nbsp;11/30/05</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Janet&nbsp;&amp; Donald Voight TTEES FBO Janet M Voight TR u/a dtd&nbsp;8/28/96</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Kettle Hill Master Fund, Ltd<SUP>(9)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Kettle Hill Partners II, LP<SUP>(9)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Kettle Hill Partners, LP<SUP>(9)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">327,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">327,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Capital Ventures International<SUP>(10)</SUP>*</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">750,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">DAFNA Lifescience LTD<SUP>(11)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">247,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">247,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">DAFNA Lifescience Market Neutral LTD<SUP>(11)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">202,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">202,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">DAFNA Lifescience Select LTD<SUP>(11)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Aristides Fund LP<SUP>(12)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">600,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">600,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Pennington Capital LLC<SUP>(13)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">560,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">450,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">110,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Itasca Capital Partners, LLC<SUP>(14)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">405,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>L2 Opportunity Fund<SUP>(15)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">FT Options, LLC<SUP>(16)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Brian H. Davidson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">375,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Iroquois Master Fund, Ltd.<SUP>(17)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">MLPF&amp;S FPO Gary S. Kohler RRA FBO Gary S. Kohler</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Kingsbrook Opportunities Master Fund LP<SUP>(18)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cranshire Capital Master Fund, Ltd.<SUP>(19)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">210,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">210,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Freestone Advantage Partners II, LP<SUP>(20)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD><TD STYLE="text-align: left">%</TD></TR>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 29%; text-align: left">Midsummer Small Cap Master, Ltd.<SUP>(21)</SUP></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">225,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">225,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: right; width: 14%; vertical-align: bottom">&mdash;</TD>
    <TD STYLE="width: 1%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Lacuna Hedge Fund LLLP<SUP>(22)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187.500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">187,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Doit L. Koppler II<SUP>(23)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">107,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Robert M. Patzig<SUP>(24)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Theodore J. Fisher<SUP>(25)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">MLPF&amp;S FPO Michael John Qualen IRA FB<SUP>(26)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Craig-Hallum Capital Group&nbsp;401k Bradley W. Baker Roth&nbsp;401k Acct.(27)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Bradley W. Baker<SUP>(27)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">George F. Sutton<SUP>(28)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">77,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">James H. Zavoral, Jr. and Johanna M. Zavoral<SUP>(29)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Craig-Hallum Capital Group&nbsp;401k UTD&nbsp;5/30/02 Contribution Acct A/C William F. Hartfield II<SUP>(30)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">John L. Flood<SUP>(31)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">MLPF&amp;S Cust FPO John L. Flood IRRA FBO John L. Flood*31&raquo;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Kevin P. Harris<SUP>(32)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">MLPF&amp;S Cust FPO Michael J. Hasslinger IRRA FBO Michael J. Hasslinger<SUP>(33)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right; vertical-align: bottom">&mdash;</TD>
    <TD>%&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&mdash; Represents
less than&nbsp;1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">The number of shares for each Selling Stockholder consists of the aggregate of the number of shares
of Common Stock held by such Selling Stockholder and shares of Common Stock issuable upon exercise of Warrants held by such Selling
Stockholder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify">For purposes of this table, the Company assumes that all of the shares covered by this prospectus
will be sold by the Selling Stockholders.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">Kevin Douglas and his wife, Michelle Douglas, hold shares jointly as the beneficiaries and co-trustees
of the K&amp;M Douglas Trust. In addition, Kevin Douglas and Michelle Douglas are co-trustees of the James Douglas and Jean Douglas
Irrevocable Descendants&rsquo; Trust. Kevin Douglas also has dispositive power with respect to the shares held by the Douglas Family
Trust and the shares held by James E. Douglas III.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify">MGP Advisors Limited (&ldquo;MGP&rdquo;)&nbsp;is the general partner of the Special Situations
Fund III, QP, L.P. AWM Investment Company, Inc. (&ldquo;AWM&rdquo;)&nbsp;is the general partner of MGP and the investment adviser
to the Special Situations Fund III, QP, L.P., Special Situations Private Equity Fund, L.P. and Special Situations Life Sciences
Fund, L.P. Austin W. Marxe and David M. Greenhouse are the principal owners of MGP and AWM. Through their control of MGP and AWM,
Messrs. Marxe and Greenhouse share voting and investment control over the portfolio securities of each of the funds listed above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(5)</TD><TD STYLE="text-align: justify">Randal J. Kirk makes investment and voting decisions with respect to shares held by the Third Security
Entities. The Third Security Entities are the holders of all of the shares outstanding of our Series A Preferred and the amount
of securities beneficially owned by each of the Third Security Entities includes shares of Common Stock issuable upon conversion
of the outstanding shares of Series A Preferred and the conversion of shares of Series A Preferred issuable upon exercise of warrants
for shares of Series A Convertible Preferred Stock. The holders of Series A Preferred have the right to appoint two members to
our Board of Directors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(6)</TD><TD STYLE="text-align: justify">Fidelity Management&nbsp;&amp; Research Company (&ldquo;Fidelity&rdquo;), 82 Devonshire Street,
Boston, Massachusetts&nbsp;02109, a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section&nbsp;203
of the Investment Advisers Act of&nbsp;1940, is the beneficial owner of&nbsp;5,087,982 shares of the Company as a result of acting
as investment adviser to various investment companies registered under Section&nbsp;8 of the Investment Company Act of&nbsp;1940.
Edward C. Johnson&nbsp;3d and FMR LLC, through its control of Fidelity, and the funds each has sole power to dispose of the&nbsp;5,087,982
Shares owned by the Funds. Members of the family of Edward C. Johnson&nbsp;3d, Chairman of FMR LLC, are the predominant owners,
directly or through trusts, of Series B voting common shares of FMR LLC, representing&nbsp;49% of the voting power of FMR LLC.
The Johnson family group and all other Series B shareholders have entered into a shareholders&rsquo; voting agreement under which
all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly,
through their ownership of voting common shares and the execution of the shareholders&rsquo; voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of&nbsp;1940, to form a controlling group with respect to FMR LLC. Neither
FMR LLC nor Edward C. Johnson&nbsp;3d, Chairman of FMR LLC, has the sole power to vote or direct the voting of the shares owned
directly by the Fidelity funds, which power resides with the Funds&rsquo; Boards of Trustees. Fidelity carries out the voting of
the shares under written guidelines established by the Funds&rsquo; Boards of Trustees. Fidelity has indicated that it may be deemed
to be an affiliate of a registered broker-dealer. Fidelity has represented that it acquired the shares in the ordinary course of
business and, at the time of the acquisition of the shares, had no agreements or understandings, directly or indirectly, with any
person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(7)</TD><TD STYLE="text-align: justify">Joseph Edelman makes investment and voting decisions with respect to shares held by Perceptive
Life Sciences Master Fund Ltd.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(8)</TD><TD STYLE="text-align: justify">James J. Tiampo, President of Verbier Management Corp., which is the general partner of Burguete
Investment Partnership, LP, makes investment and voting decisions with respect to shares held by Burguete Investment Partnership,
LP.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(9)</TD><TD STYLE="text-align: justify">Andrew Yoichi Kurita, Portfolio Manager, makes investment and voting decisions with respect to
shares held by Kettle Hill Master Fund, Ltd., Kettle Hill Partners, L.P. and Kettle Hill Partners II, L.P.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(10)</TD><TD STYLE="text-align: justify">Heights Capital Management, Inc., the authorized agent of Capital Ventures International (&ldquo;CVI&rdquo;),
has discretionary authority to vote and dispose of the shares held by CVI and may be deemed to be the beneficial owner of these
shares. Martin Kobinger, in his capacity as Investment Manager of Heights Capital Management, Inc., may also be deemed to have
investment discretion and voting power over the shares held by CVI. Mr.&nbsp;Kobinger disclaims any such beneficial ownership of
the shares. CVI is affiliated with one or more FINRA members, none of whom are currently expected to participate in the sale pursuant
to the prospectus contained in this Registration Statement of shares held by CVI. CVI has represented that it acquired the shares
in the ordinary course of business and, at the time of the acquisition of the shares, had no agreements or understandings, directly
or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(11)</TD><TD STYLE="text-align: justify">Fariba Ghodsian, Managing Member, makes investment and voting decisions with respect to shares
held by DAFNA Lifescience LTD, DAFNA Lifescience Market Neutral LTD and DAFNA Lifescience Select LTD.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(12)</TD><TD STYLE="text-align: justify">Christopher M. Brown, Managing Member of the general partner of Aristides Fund LP, makes investment
and voting decisions with respect to shares held by Aristides Fund LP.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(13)</TD><TD STYLE="text-align: justify">Robert J. Evans, Managing Partner, makes investment and voting decisions with respect to shares
held by Pennington Capital LLC.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(14)</TD><TD STYLE="text-align: justify">Michael S. Wallace, Managing Member, makes investment and voting decisions with respect to shares
held by Itasca Capital Partners, LLC.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(15)</TD><TD STYLE="text-align: justify">Russ Silvestri, Managing Director, makes investment and voting decisions with respect to shares
held by L2 Opportunity Fund.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(16)</TD><TD STYLE="text-align: justify">Zachary Quinn Piper, Partner, makes investment and voting decisions with respect to shares held
by FT Options, LLC.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(17)</TD><TD STYLE="text-align: justify">Iroquois Capital Management L.L.C. (Iroquois Capital) is the investment manager of Iroquois Master
Fund, Ltd (IMF). Consequently, Iroquois Capital has voting control and investment discretion over securities held by IMF. As managing
members of Iroquois Capital, Joshua Silverman and Richard Abbe make voting and investment decisions on behalf of Iroquois Capital
in its capacity as investment manager to IMF. As a result of the foregoing, Mr.&nbsp;Silverman and Mr.&nbsp;Abbe may be deemed
to have beneficial ownership (as determined under Section&nbsp;13(d)&nbsp;of the Securities Exchange Act of&nbsp;1934, as amended)
of the securities held by IMF. Notwithstanding the foregoing, Mr.&nbsp;Silverman and Mr.&nbsp;Abbe disclaim such beneficial ownership.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(18)</TD><TD STYLE="text-align: justify">Kingsbrook Partners LP (&ldquo;Kingsbrook Partners&rdquo;) is the investment manager of Kingsbrook
Opportunities Master Fund LP (&ldquo;Kingsbrook Opportunities&rdquo;) and consequently has voting control and investment discretion
over securities held by Kingsbrook Opportunities. Kingsbrook Opportunities GP LLC (&ldquo;Opportunities GP&rdquo;) is the general
partner of Kingsbrook Opportunities and may be considered the beneficial owner of any securities deemed to be beneficially owned
by Kingsbrook Opportunities. KB GP LLC (&ldquo;GP LLC&rdquo;) is the general partner of Kingsbrook Partners and may be considered
the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Partners. Ari J. Storch, Adam J. Chill and
Scott M. Wallace are the sole managing members of Opportunities GP and GP LLC and as a result, may be considered beneficial owners
of any securities deemed beneficially owned by Opportunities GP and GP LLC. Each of Kingsbrook Partners, Opportunities GP, GP LLC
and Messrs. Storch, Chill and Wallace disclaim beneficial ownership of these securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(19)</TD><TD STYLE="text-align: justify">Cranshire Capital Advisors, LLC (&ldquo;CCA&rdquo;)&nbsp;is the investment manager of Cranshire
Capital Master Fund, Ltd. (&ldquo;Cranshire Master Fund&rdquo;) and has voting control and investment discretion over securities
held by Cranshire Master Fund. Mitchell P. Kopin, the president, the sole member and the sole member of the Board of Managers of
CCA, has voting control over CCA. As a result, each of Mr.&nbsp;Kopin and CCA may be deemed to have beneficial ownership (as determined
under Section&nbsp;13(d)&nbsp;of the Exchange Act of the securities held by Cranshire Master Fund. CCA is also the investment manager
for a managed account for Freestone Advantage Partners, II LP (&ldquo;Freestone II&rdquo;), and CCA has voting control and investment
discretion over securities held by Freestone II. As a result, Mr.&nbsp;Kopin may be deemed to be the beneficial owner of the&nbsp;15,000
shares of Common Stock held by Freestone II consisting of (i)&nbsp;10,000 shares of Common Stock held by Freestone II, and (ii)&nbsp;5,000
shares of Common Stock issuable upon exercise of Warrants held by Freestone II.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(20)</TD><TD STYLE="text-align: justify">Cranshire Capital Advisors, LLC (&ldquo;CCA&rdquo;)&nbsp;is the investment manager of a managed
account for Freestone Advantage Partners II, LP (&ldquo;Freestone II&rdquo;) and has voting control and investment discretion over
securities held by Freestone II in such managed account. Mitchell P. Kopin, the president, the sole member and the sole member
of the Board of Managers of CCA, has voting control over CCA. As a result, Mr.&nbsp;Kopin and CCA may be deemed to be the beneficial
owner (as determined under Section&nbsp;13(d)&nbsp;of the Securities Exchange Act, as amended) of the securities held by Freestone
II in such managed account. CCA is also the investment manager of Cranshire Capital Master Fund, Ltd (&ldquo;Cranshire Master Fund&rdquo;)
and CCA has voting control and investment discretion over securities held by Cranshire Master Fund. Mr.&nbsp;Kopin, the sole member
and the sole member of the Board of Managers of CCA, has voting control over CCA. As a result, each of Mr.&nbsp;Kopin and CCA may
be deemed to have beneficial ownership (as determined under Section&nbsp;13(d)&nbsp;of the Securities Exchange Act, as amended)
of the securities held by Cranshire Master Fund that are described in footnote&nbsp;19 above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(21)</TD><TD STYLE="text-align: justify">Joshua Thomas or Michel Amsalem make investment and voting decisions with respect to shares held
by Midsummer Small Cap Master, Ltd.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(22)</TD><TD STYLE="text-align: justify">Richard O&rsquo;Leary, Partner, makes investment and voting decisions with respect to shares held
by Lacuna Hedge Fund, LLLP.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(23)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Koppler is a member of our Board of Directors and was appointed by the Third Security
Entities, as holders of Series A Preferred.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(24)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Patzig serves on our Board of Directors and was appointed by the Third Security Entities,
as holders of Series A Preferred.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(25)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Fisher serves as assistant general counsel to the Third Security Entities, which are also
Selling Stockholders hereunder and holders of Series A Preferred.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(26)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Qualen has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Qualen has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(27)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Baker makes investment and voting decisions with respect to shares held in the Craig-Hallum
Capital Group&nbsp;401(k) Bradley W. Baker Roth&nbsp;410(k) Account. Mr.&nbsp;Baker has indicated that he may be deemed to be an
affiliate of a registered broker-dealer. Mr.&nbsp;Baker has represented that he acquired his shares in the ordinary course of business
and, at the time of the acquisition of the shares, had no agreements or understandings, directly or indirectly, with any person
to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(28)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Sutton has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Sutton has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(29)</TD><TD STYLE="text-align: justify">Mr.&nbsp;and Mrs.&nbsp;Zavoral have indicated that they may be deemed to be an affiliate of a registered
broker-dealer. Mr.&nbsp;and Mrs.&nbsp;Zavoral have represented that they acquired their shares in the ordinary course of business
and, at the time of the acquisition of the shares, had no agreements or understandings, directly or indirectly, with any person
to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(30)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Hartfield has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Hartfield has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(31)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Flood has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Flood has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(32)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Harris has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Harris has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(33)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Haslinger has indicated that he may be deemed to be an affiliate of a registered broker-dealer.
Mr.&nbsp;Haslinger has represented that he acquired his shares in the ordinary course of business and, at the time of the acquisition
of the shares, had no agreements or understandings, directly or indirectly, with any person to distribute the shares.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Description
of Common Stock</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
Board of Directors is authorized to issue up to&nbsp;100,000,000 shares of Common Stock, from time to time, as provided in a resolution
or resolutions adopted by the Board of Directors.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of March&nbsp;13,
2012, 71,625,725 shares of our Common Stock were issued and outstanding, held by approximately&nbsp;2,800 stockholders of record,
not including beneficial holders whose shares are held in names other than their own.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dividends, Voting Rights and Liquidation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Holders of Common Stock
are entitled to one vote for each share held of record on all matters submitted to a vote of the shareholders and do not have cumulative
voting rights. Holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to
time by our Board of Directors out of funds legally available for dividend payments. All outstanding shares of Common Stock are
fully paid and non-assessable. The holders of Common Stock have no preferences or rights of conversion, exchange, pre-emption or
other subscription rights. There are no redemption or sinking fund provisions applicable to the Common Stock. In the event of any
liquidation, dissolution or winding-up of our affairs, holders of Common Stock will be entitled to share ratably in our assets
that are remaining after payment or provision for payment of all of our debts and obligations. The rights, preferences and privileges
of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred
stock currently outstanding or which may designate and issue in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Preferred Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">General Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under our Third Amended
and Restated Certificate of Incorporation (the &ldquo;Certificate of Incorporation&rdquo;), we have the authority to issue up to&nbsp;15,000,000
shares of preferred stock, $0.01 par value per share (&ldquo;Preferred Stock&rdquo;), issuable in specified series and having specified
voting, dividend, conversion, liquidation, and other rights and preferences as our Board of Directors may determine, subject to
limitations set forth in our Certificate of Incorporation. The Preferred Stock may be issued for any lawful corporate purpose without
further action by our stockholders. The issuance of any Preferred Stock having conversion rights might have the effect of diluting
the interests of our other stockholders. In addition, shares of Preferred Stock could be issued with rights, privileges and preferences
which would deter a tender or exchange offer or discourage the acquisition of control of the Company.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Series A Convertible Preferred Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Of the number of shares
of Preferred Stock authorized by or Certificate of Incorporation, as of March&nbsp;13, 2012, 3,879,307 shares had been designated
Series A Convertible Preferred Stock with such rights, privileges and preferences as set forth in the Certificate of Designation
of Series A Convertible Preferred Stock and filed with the Secretary of State of the State of Delaware on December&nbsp;28, 2011
(the &ldquo;Certificate of Designation&rdquo;). As of March&nbsp;13, 2012, 2,586,205 shares of the Series A Convertible Preferred
Stock (the &ldquo;Series A Preferred&rdquo;) were issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Certain rights of the
holders of the Series A Preferred are senior to the rights of the holders of our Common Stock. The Series A Preferred has a liquidation
preference equal to its original price per share, plus any accrued and unpaid dividends thereon. The Series A Preferred accrues
cumulative dividends at the rate of&nbsp;10.0% of the original price per share per annum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All outstanding shares
of Series A Preferred will be automatically converted into Common Stock, at an initial conversion rate of&nbsp;4:1, at the election
of the holders of a majority of the then-outstanding shares of Series A Preferred. At any time following the fifth anniversary
of the original issue date, the holders of a majority of the then-outstanding Series A Preferred, voting together as a separate
class, can require the Company to redeem all of the then-outstanding Series A Preferred at a price equal to the then-current stated
value of such shares plus all accrued but unpaid dividends thereon. The initial conversion rate for the Series A Preferred is subject
to adjustment in the event of certain stock splits, stock dividends, mergers, reorganizations, reclassifications, and dilutive
issuances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Certificate of
Designation provides that the holders of Series A Preferred shall be entitled, as a separate voting group, at each annual or special
election of directors, to elect two directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, the holders
of the Series A Preferred are entitled to vote together as a single group with the holders of Common Stock on an as-converted basis.
However, the Certificate of Designation provides that we will not perform the following activities, subject to certain exceptions,
without the affirmative vote of a majority of the holders of the outstanding shares of Series A Preferred:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">authorize, create or issue any other class or series of capital stock having rights, preferences
or privileges senior to or in parity with the Series A Preferred;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">alter or change the rights, preferences or privileges of the Series A Preferred or increase or
decrease the authorized number of shares of Series A Preferred;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">authorize or declare any dividends on the common shares or any other shares of capital stock other
than the Series A Preferred;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">authorize any offering of equity securities of the Company representing (on a pro forma basis after
giving effect to the issuance of such equity securities) the right to receive not less than&nbsp;10% of any amounts or funds that
would, as of immediately following such issuance, be legally available for distribution in connection with a liquidation event;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">redeem any shares of capital stock (other than pursuant to employee agreements or the terms of
the capital stock);</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increase or decrease the authorized number of members of the Board;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">enter into any binding agreement with any director, employee or any affiliate of the Company;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">materially change the nature of the Company&rsquo;s business, enter into new lines of business
or exit the current line of business or invest in any person or entity engaged in a business that is not substantially similar
to the Company&rsquo;s business, or change the location of any permanent location of any part of the Company&rsquo;s business,
in each case except as contemplated by the Asset Purchase Agreement dated as of November&nbsp;29, 2010, by and among PGxHealth,
LLC, Clinical Data, Inc. and Transgenomic (the &ldquo;Purchase Agreement&rdquo;) or any of the transaction documents included therein;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">make any loans or advances, individually or in the aggregate in excess of $1,000,000, to, or own
any securities of, any subsidiary or other corporation or other entity unless it is wholly owned by the Company;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">make any loan or advance to any natural person, including, without limitation, any employee or
director of the Company, except advances and similar expenditures in the ordinary course of business;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">guarantee, directly or indirectly, any indebtedness, except for trade accounts of the Company arising
in the ordinary course of business;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">sell or otherwise dispose of any assets of the Company with a value, individually or collectively,
in excess of $500,000, other than in the ordinary course of business;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">liquidate or wind-up the business and affairs of the Company or effect a change in control or any
other liquidation event;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">incur any indebtedness in excess of $1,000,000 in the aggregate, other than trade credit incurred
in the ordinary course of business or as contemplated by the Purchase Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">expend funds in excess of $500,000 in the aggregate per year for capital improvements, other than
any such expenditure that is consistent with a budget approved by the Board, including the directors elected by the holders of
Series A Preferred or as contemplated by the Purchase Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">obligate the Company to make aggregate annual payments in excess of $500,000 or sell, transfer
or license any material technology or intellectual property of the Company, other than a non-exclusive license in the ordinary
course of business, in each case except as contemplated by the Purchase Agreement; or</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">increase the number of shares reserved and issuable under any of the Company&rsquo;s equity or
option incentive compensation plans.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Anti-Takeover Effects<I> </I>Under Section&nbsp;203 of
the Delaware General Corporation Law</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We are subject to Section&nbsp;203
of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with
any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with
the following exceptions:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">before such date, the board of directors of the corporation approved either the business combination
or the transaction that resulted in the stockholder becoming an interested stockholder;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">upon completion of the transaction that resulted in the stockholder becoming an interested stockholder,
the interested stockholder owned at least&nbsp;85% of the voting stock of the corporation outstanding at the time the transaction
began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested
stockholder) those shares owned (i)&nbsp;by persons who are directors and also officers and (ii)&nbsp;employee stock plans in which
employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered
in a tender or an exchange offer; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">on or after such date, the business combination is approved by our board of directors and authorized
at an annual or a special meeting of the stockholders, and not by written consent, by the affirmative vote of at least&nbsp;66
2/3% of the outstanding voting stock that is not owned by the interested stockholder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In general, Section&nbsp;203 defines &ldquo;business
combination&rdquo; to include the following:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">any merger or consolidation involving the corporation or any direct or indirect majority owned
subsidiary of the corporation and the interested stockholder or any other corporation, partnership, unincorporated association,
or other entity if the merger or consolidation is caused by the interested stockholder and as a result of such merger or consolidation
the transaction is not excepted as described above;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">any sale, transfer, pledge, or other disposition (in one transaction or a series) of&nbsp;10% or
more of the assets of the corporation involving the interested stockholder;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">subject to certain exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">any transaction involving the corporation that has the effect of increasing the proportionate share
of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges,
or other financial benefits by or through the corporation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, Section&nbsp;203
defines an &ldquo;interested stockholder&rdquo; as an entity or a person who, together with the person&rsquo;s affiliates and associates,
beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more
of the outstanding voting stock of the corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Delaware corporation
may &ldquo;opt out&rdquo; of these provisions with an express provision in its original certificate of incorporation or an express
provision in its certificate of incorporation or bylaws resulting from a stockholders&rsquo; amendment approved by at least a majority
of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change in
control attempts of us may be discouraged or prevented.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Anti-Takeover Effects Under Certain Provisions of our Certificate
of Incorporation and Bylaws</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Certificate of
Incorporation and our Amended and Restated Bylaws (&ldquo;Bylaws&rdquo;) include a number of provisions that may have the effect
of deterring hostile takeovers or delaying or preventing changes in control or management of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">First, our Certificate
of Incorporation provides that all stockholder actions must be effected at a duly called meeting of holders and not by a consent
in writing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Second, our Bylaws
provide that special meetings of the holders may be called only by the chairman of the Board of Directors, the Chief Executive
Officer or our Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Third, our Certificate
of Incorporation provides that our Board of Directors can issue up to&nbsp;15,000,000 shares of Preferred stock, as described under
&ldquo;Preferred Stock&rdquo; above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fourth, our Certificate
of Incorporation and the Bylaws provide for a classified Board of Directors in which approximately one-third of the directors would
be elected each year. Consequently, any potential acquirer would need to successfully complete two proxy contests in order to take
control of the Board of Directors. As a result of the provisions of the Certificate of Incorporation and Delaware law, stockholders
will not be able to cumulate votes for directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fifth, our Certificate
of Incorporation prohibits a business combination with an interested stockholder without the approval of the holders of&nbsp;75%
of all voting shares and the vote of a majority of the voting shares held by disinterested stockholders, unless it has been approved
by a majority of the disinterested directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, our Bylaws
establish procedures, including advance notice procedures, with regard to the nomination of candidates for election as directors
and stockholder proposals. These provisions of our Third Amended and Restated Certificate of Incorporation and our Amended and
Restated Bylaws could discourage potential acquisition proposals and could delay or prevent a change in control or management of
our company.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Warrants</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the
Warrants to purchase&nbsp;11,000,000 of the shares of Common Stock we are registering hereunder, as of March&nbsp;13, 2012, warrants
to purchase&nbsp;380,000 shares of Common Stock with an exercise price of $1.25&nbsp;per share were outstanding, and warrants to
purchase&nbsp;1,293,102 shares of Series A Preferred with an exercise price of $2.32&nbsp;per share were outstanding. All outstanding
warrants contain provisions for the adjustment of the exercise price in the event of stock dividends, stock splits, reorganizations,
reclassifications or mergers. In addition, certain of the warrants contain a &ldquo;cashless exercise&rdquo; feature that allows
the holders thereof to exercise the warrants without a cash payment to us under certain circumstances.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Listing</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Common Stock is
traded on the OTC Bulletin Board under the symbol &ldquo;TBIO&rdquo;.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Transfer Agent and Registrar</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Wells Fargo Bank Minnesota,
N.A., is the transfer agent and registrar for our Common Stock. Their address is Shareowner Services, P.O. Box&nbsp;64854, St.
Paul, MN&nbsp;55164-0854, and their telephone number is (800) 478-9715.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">United States
Federal Income Tax Considerations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a
summary of the material U.S.&nbsp;federal income tax considerations relating to the purchase, ownership and disposition of the
shares of the Common Stock purchased by the investor pursuant to this offering and ownership of the Warrants and exercise, lapse
or disposition of the Warrants. We have based this summary upon the Internal Revenue Code of&nbsp;1986, as amended (the &ldquo;Code&rdquo;),
Treasury regulations promulgated under the Code, as amended (the &ldquo;Treasury Regulations&rdquo;), administrative rulings and
pronouncements and judicial decisions, in each case as of the date hereof. These authorities are subject to differing interpretations
and are subject to change, perhaps retroactively, resulting in U.S.&nbsp;federal income tax consequences different from those discussed
below. We have not sought any ruling from the Internal Revenue Service (the &ldquo;IRS&rdquo;) with respect to the statements made
and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements
and conclusions or that a court will not sustain any challenge by the IRS in the event of litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This summary assumes
that a beneficial owner will hold the Warrants or shares of the Common Stock, as the case may be, as capital assets within the
meaning of section&nbsp;1221 of the Code. This summary does not address the tax consequences arising under the laws of any state
or local jurisdiction or non-U.S.&nbsp;jurisdiction or any other U.S.&nbsp;federal tax consequences, such as estate and gift tax
consequences. In addition, this summary does not address all tax considerations that might be applicable to your particular circumstances
(such as the alternative minimum tax provisions of the Code), or to certain types of holders subject to special tax rules, including,
without limitation, partnerships, banks, financial institutions or other &ldquo;financial services&rdquo; entities, broker-dealers,
insurance companies, tax-exempt organizations, regulated investment companies, real estate investment trusts, retirement plans,
individual retirement accounts or other tax-deferred accounts, persons who use or are required to use mark-to-market accounting
for federal income tax purposes, persons that hold the Warrants or shares of the Common Stock as part of a &ldquo;straddle&rdquo;,
a &ldquo;hedge&rdquo;, a &ldquo;conversion transaction&rdquo; or other arrangement involving more than one position, U.S.&nbsp;holders
(as defined below) that have a functional currency other than the U.S.&nbsp;dollar and certain former citizens or permanent residents
of the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a partnership holds
the Warrants or shares of the Common Stock, the tax treatment of a partner in the partnership will generally depend upon the status
of the partner and the activities of the partnership. If you are a partner of a partnership holding the Warrants or shares of the
Common Stock, you should consult your tax advisor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are considering
the purchase of the shares of the Common Stock or an investment in or the exercise or disposition of the Warrants, or permitting
the Warrants to lapse unexercised, you should consult your own tax advisors concerning the U.S.&nbsp;federal income tax consequences
to you in light of your particular facts and circumstances and any consequences arising under the laws of any state, local, foreign
or other taxing jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As used in this discussion,
a &ldquo;U.S.&nbsp;Holder&rdquo; is a beneficial owner of the Warrants or shares of the Common Stock, as applicable, that is not
a partnership or entity treated as a partnership for U.S.&nbsp;federal income tax purposes and is:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>an individual who is a citizen or resident of the United States;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>a corporation (or other entity treated as a corporation for U.S.&nbsp;federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof or the District of Columbia;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>an estate, the income of which is subject to U.S.&nbsp;federal income taxation regardless of its source; or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>a trust (i)&nbsp;if a court within the United States is able to exercise primary supervision over its administration and one
or more U.S.&nbsp;persons have authority to control all substantial decisions of the trust or (ii)&nbsp;that has a valid election
in effect under applicable Treasury Regulations to be treated as a U.S.&nbsp;person.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As used in this discussion,
a &ldquo;Non-U.S.&nbsp;Holder&rdquo; is a beneficial owner of the Warrants or shares of the Common Stock, as applicable, that is
neither a U.S.&nbsp;Holder nor a partnership or other entity treated as a partnership for U.S.&nbsp;federal income tax purposes.
Special rules may apply to Non-U.S.&nbsp;Holders that are subject to special treatment under the Code, including controlled foreign
corporations, passive foreign investment companies, U.S.&nbsp;expatriates, and foreign persons eligible for benefits under an applicable
income tax treaty with the United States. Such Non-U.S.&nbsp;Holders should consult their tax advisors to determine U.S.&nbsp;federal,
state, local and other tax consequences that may be relevant to them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">THIS DISCUSSION IS
ONLY A SUMMARY OF CERTAIN MATERIAL U.S.&nbsp;FEDERAL INCOME TAX OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE COMMON STOCK
AND OWNERSHIP AND EXERCISE, DISPOSITION OR LAPSE OF THE WARRANTS. IT IS NOT TAX ADVICE. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT
ITS TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
LOCAL, AND NON-U.S.&nbsp;TAX LAWS, AS WELL AS U.S.&nbsp;FEDERAL TAX LAWS, AND ANY APPLICABLE TAX TREATIES.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Consequences to U.S.&nbsp;Holders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Distributions
on Common Stock.</I></B> Distributions made to U.S.&nbsp;Holders out of our current or accumulated earnings and profits, as determined
for U.S.&nbsp;federal income tax purposes, will be included in the income of a U.S.&nbsp;Holder as dividend income and will be
subject to tax as ordinary income. Dividends received by an individual U.S.&nbsp;Holder in taxable years beginning before January&nbsp;1,
2013 that constitute &ldquo;qualified dividend income&rdquo; are generally subject to tax at a maximum rate of&nbsp;15%, provided
that certain holding period and other requirements are met. After December&nbsp;31, 2012, higher income tax rates will apply unless
further legislative action is taken. Dividends received by a corporate U.S.&nbsp;Holder, except as described in the next subsection,
generally will be eligible for the&nbsp;70% dividends-received deduction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Distributions in excess
of our current and accumulated earnings and profits will not be taxable to a U.S.&nbsp;Holder to the extent that the distributions
do not exceed the U.S.&nbsp;Holder&rsquo;s adjusted tax basis in the stock to which such distribution relates, but rather will
reduce the adjusted tax basis of such shares. To the extent that distributions in excess of our current and accumulated earnings
and profits exceed the U.S.&nbsp;Holder&rsquo;s adjusted tax basis in the shares of stock to which the distribution relates, such
distributions will generally be treated as the sale or exchange of such stock, resulting in capital gain. See &ldquo;-Sale, Exchange
or other Taxable Disposition&rdquo; below. In addition, a corporate U.S.&nbsp;Holder will not be entitled to the dividends-received
deduction on this portion of a distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will notify holders
of our shares after the close of our taxable year as to the portions of the distributions attributable to that year that constitute
ordinary income, qualified dividend income and non-dividend distributions, if any.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Limitations on
Dividends-Received Deduction</I></B><I>. </I>A corporate U.S.&nbsp;Holder may not be entitled to take the&nbsp;70% dividends-received
deduction in all circumstances. Prospective corporate investors in our Common Stock should consider the effect of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Section&nbsp;246A of the Code, which reduces the dividends-received deduction allowed to a corporate U.S.&nbsp;Holder that
has incurred indebtedness that is &ldquo;directly attributable&rdquo; to an investment in portfolio stock;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Section&nbsp;246(c)&nbsp;of the Code, which, among other things, disallows the dividends-received deduction in respect of any
dividend on a share of stock that is held for less than the minimum holding period (generally, for Common Stock, at least&nbsp;46&nbsp;days
during the&nbsp;90&nbsp;day period beginning on the date which is&nbsp;45&nbsp;days before the date on which such share becomes
ex-dividend with respect to such dividend); and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Section&nbsp;1059 of the Code, which, under certain circumstances, reduces the basis of stock for purposes of calculating gain
or loss in a subsequent disposition by the portion of any &ldquo;extraordinary dividend&rdquo; (as defined below) that is eligible
for the dividends-received deduction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Extraordinary
Dividends</I></B>. A corporate U.S.&nbsp;Holder will be required to reduce its tax basis (but not below zero) in our Common Stock
by the non-taxed portion of any &ldquo;extraordinary dividend&rdquo; if the stock was not held for more than two years before the
earliest of the date such dividend is declared, announced, or agreed. Generally, the non-taxed portion of an extraordinary dividend
is the amount excluded from income by operation of the dividends-received deduction. An extraordinary dividend generally would
be a dividend that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>equals or exceeds&nbsp;5% of the corporate U.S.&nbsp;Holder&rsquo;s adjusted tax basis in the stock to which the dividend relates,
treating all dividends having ex-dividend dates within an&nbsp;85&nbsp;day period as one dividend; or</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>exceeds&nbsp;20% of the corporate U.S.&nbsp;Holder&rsquo;s adjusted tax basis in the stock, treating all dividends having ex-dividend
dates within a&nbsp;365&nbsp;day period as one dividend.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In determining whether
a dividend paid on stock is an extraordinary dividend, a corporate U.S.&nbsp;Holder may elect to substitute the fair market value
of the stock for its tax basis for purposes of applying these tests if the fair market value as of the day before the ex-dividend
date is established to the satisfaction of the Secretary of the Treasury. An extraordinary dividend also includes any amount treated
as a dividend in the case of a redemption that is either non-pro rata as to all stockholders or in partial liquidation of the corporation,
regardless of the stockholder&rsquo;s holding period and regardless of the size of the dividend. Any part of the non-taxed portion
of an extraordinary dividend that is not applied to reduce the corporate U.S.&nbsp;Holder&rsquo;s tax basis as a result of the
limitation on reducing its basis below zero would be treated as capital gain and would be recognized in the taxable year in which
the extraordinary dividend is received.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Corporate U.S.&nbsp;Holders
should consult with their own tax advisors with respect to the possible application of the extraordinary dividend provisions of
the Code to the ownership or disposition of the Warrants or the Common Stock in their particular circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Sale, Exchange,
or other Taxable Disposition of Common Stock.</I></B> Upon the sale, exchange, or other taxable disposition of Common Stock, a
U.S.&nbsp;Holder generally will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange,
or other taxable disposition and the U.S.&nbsp;Holder&rsquo;s adjusted tax basis in such shares. The amount realized by the U.S.&nbsp;Holder
will include the amount of any cash and the fair market value of any other property received upon the sale, exchange, or other
taxable disposition of such shares. A U.S.&nbsp;Holder&rsquo;s tax basis in a share generally will be equal to the cost of the
share to such U.S.&nbsp;Holder, which may be adjusted for certain subsequent events (for example, if the U.S.&nbsp;Holder receives
a non-dividend distribution, as described above). Gain or loss realized on the sale, exchange, or other taxable disposition of
Common Stock generally will be capital gain or loss and will be long-term capital gain or loss if the shares have been held for
more than one year. Net long-term capital gain recognized by an individual U.S.&nbsp;Holder before January&nbsp;1, 2013 generally
is subject to tax at a maximum rate of&nbsp;15%, which such maximum rate is scheduled to increase to&nbsp;20% after December&nbsp;31,
2012. For corporate U.S.&nbsp;Holders, capital gain is generally subject to the same tax rate as ordinary income, that is, currently
at a maximum rate of&nbsp;35%. The ability of U.S.&nbsp;Holders to deduct capital losses is subject to limitations under the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Taxation of the
Warrants. </I></B>A warrant is an option granted by an issuer of stock to acquire stock at a set price within a specified period.
Warrants are generally taxed in the same manner as options. If you exercise a warrant, you will not recognize any gain or loss
for U.S.&nbsp;federal income tax purposes (except that gain or loss will be recognized to the extent you receive cash in lieu of
a fractional common share as if you had actually received the fractional share and the fractional share was immediately redeemed
for cash). Your initial tax basis in the security received upon exercise will be the sum of the exercise price paid and your adjusted
tax basis in the warrant (excluding any portion of such sum allocable to a fractional share), and your holding period for the security
received will begin on the day you exercise the warrant. If you sell or exchange a warrant, you will generally recognize gain or
loss equal to the difference between the amount realized in the sale or exchange and your adjusted tax basis in the warrant sold
or exchanged. If the warrant expires unexercised, you will recognize a loss in an amount equal to your adjusted tax basis in the
warrant. Any such gain or loss from the sale, exchange or expiration of the Warrants will be capital gain or loss and will be long-term
capital gain or loss if your holding period for the Warrants exceeds one year at the time of the sale, exchange or expiration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">U.S.&nbsp;Holders should
consult with their own tax advisors regarding the U.S.&nbsp;federal income tax consequences and the tax consequences of any other
taxing jurisdiction relating to the ownership and exercise, disposition or lapsing of the Warrants in light of their investment
or tax circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Information Reporting
and Backup Withholding. </I></B>In general, information reporting will apply to distributions in respect of stock and the proceeds
from the sale, exchange or other disposition of stock that are paid to a U.S.&nbsp;holder within the United States (and in certain
cases, outside the United States), unless the holder is an exempt recipient.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, backup
withholding (currently at the rate of&nbsp;28%, but scheduled to increase to&nbsp;31% for payments made after December&nbsp;31,
2012) will apply to payments received by a U.S.&nbsp;Holder with respect to shares of our Common Stock unless the U.S.&nbsp;Holder
is (i)&nbsp;a corporation or other exempt recipient and, when required, establishes this exemption or (ii)&nbsp;provides its correct
taxpayer identification number, certifies that it is not currently subject to backup withholding tax and otherwise complies with
applicable requirements of the backup withholding tax rules. A U.S.&nbsp;Holder that does not provide us with its correct taxpayer
identification number might be subject to penalties imposed by the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Backup withholding
is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a U.S.&nbsp;Holder may be refunded
or credited against the U.S.&nbsp;Holder&rsquo;s U.S.&nbsp;federal income tax liability, if any, provided that the required information
is furnished to the IRS in a timely manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Medicare Tax
on Investment Income. </I></B>On March&nbsp;30, 2010, President Obama signed into law the Health Care and Education Reconciliation
Act of&nbsp;2010. This legislation requires certain individuals, estates and trusts to pay a&nbsp;3.8% Medicare surtax on &ldquo;net
investment income&rdquo; including, among other things, dividends and gain on sale in respect of securities like the Warrants or
shares of our Common Stock, subject to certain exceptions, for taxable years beginning after December&nbsp;31, 2012. Prospective
purchasers of the Warrants or shares of our Common Stock should consult their own tax advisors regarding the effect, if any, of
the legislation on their ownership and disposition of the Warrants or shares of our Common Stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Consequences to Non-U.S.&nbsp;Holders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Distributions
on Common Stock. </I></B>Any distribution we make to a Non-U.S.&nbsp;Holder of shares of our Common Stock, other than certain pro
rata distributions of Common Stock, to the extent paid out of our current or accumulated earnings and profits (as determined under
U.S.&nbsp;federal income tax principles), will constitute a dividend for U.S.&nbsp;federal income tax purposes. Any distribution
not constituting a dividend will be treated for U.S.&nbsp;federal income tax purposes as a tax-free return of capital to the extent
of the Non-U.S.&nbsp;Holder&rsquo;s adjusted tax basis in its shares of our Common Stock (with a corresponding reduction to such
basis), and, to the extent such distribution exceeds the Non-U.S.&nbsp;Holder&rsquo;s adjusted tax basis, as gain from the sale
or other disposition of the Common Stock, which will be treated as described under &ldquo;Sale, Exchange, or other Taxable Disposition&rdquo;
below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, any distribution
to a Non-U.S.&nbsp;Holder that is a dividend for U.S.&nbsp;federal income tax purposes and that is not effectively connected with
the Non-U.S.&nbsp;Holder&rsquo;s conduct of a trade or business within the Unites States, as described below, will be subject to
U.S.&nbsp;federal withholding tax at a rate of&nbsp;30% percent of the gross amount of the dividend, unless such Non-U.S.&nbsp;Holder
is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its
eligibility for such reduced rate (usually on an IRS Form&nbsp;W-8BEN). If the Non-U.S.&nbsp;Holder holds the stock through a financial
institution or other agent acting on the Non-U.S.&nbsp;Holder&rsquo;s behalf, the Non-U.S.&nbsp;Holder will be required to provide
appropriate documentation to the agent, who then will be required to provide certification to us or our paying agent, either directly
or through other intermediaries. If U.S.&nbsp;federal income tax is withheld on the amount of a distribution in excess of the amount
constituting a dividend, the Non-U.S.&nbsp;Holder may obtain a refund of all or a portion of the excess amount withheld by timely
filing a claim for refund with the IRS. If a Non-U.S.&nbsp;Holder holds shares of our Common Stock in connection with a trade or
business in the United States, dividends we pay to a Non-U.S.&nbsp;Holder that are effectively connected with such Non-U.S.&nbsp;Holder&rsquo;s
conduct of a trade or business within the United States (or, if certain income tax treaties apply, are attributable to a U.S.&nbsp;permanent
establishment or fixed base maintained by the Non-U.S.&nbsp;Holder) generally will not be subject to U.S.&nbsp;withholding tax,
provided such Non-U.S.&nbsp;Holder complies with certain certification and disclosure requirements (usually by providing an IRS
Form&nbsp;W-8ECI). Instead, such dividends generally will be subject to U.S.&nbsp;federal income tax, net of certain deductions,
at the same graduated individual or corporate tax rates applicable to U.S.&nbsp;persons. If the Non-U.S.&nbsp;Holder is a foreign
corporation, dividends that are effectively connected income may also be subject to a &ldquo;branch profits tax&rdquo; at a rate
of&nbsp;30% (or such lower rate as may be specified by an applicable income tax treaty) of its effectively connected earnings and
profits for the taxable year, as adjusted for certain items. Non-U.S.&nbsp;Holders should consult any applicable income tax treaties
that may provide for different rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Non-U.S.&nbsp;Holder
who claims the benefit of an applicable income tax treaty generally will be required to satisfy applicable certification and other
requirements prior to the distribution date. Non-U.S.&nbsp;Holders should consult their tax advisors regarding their entitlement
to benefits under a relevant income tax treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Sale, Exchange,
or other Taxable Disposition of Common Stock. </I></B>A Non-U.S.&nbsp;Holder generally will not be subject to U.S.&nbsp;federal
income or withholding tax on any capital gain realized on the sale, exchange, or other taxable disposition of the Warrants or our
Common Stock provided that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(a)</TD><TD>the gain is not effectively connected with the conduct of a trade or business within the United States, or a permanent establishment
maintained in the United States if certain tax treaties apply,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(b)</TD><TD>in the case of a Non-U.S.&nbsp;Holder that is an individual, the Non-U.S.&nbsp;Holder is not present in the United States for&nbsp;183&nbsp;days
or more in the taxable year of the sale, exchange, or other disposition of the shares,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(c)</TD><TD>the Non-U.S.&nbsp;Holder is not subject to tax pursuant to certain provisions of U.S.&nbsp;federal income tax law applicable
to certain expatriates, and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">(d)</TD><TD>we are not nor have we been a &ldquo;United States real property holding corporation&rdquo; (&ldquo;USRPHC&rdquo;) for U.S.&nbsp;federal
income tax purposes.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless an applicable
tax treaty provides otherwise, gain described in the (a)&nbsp;or (d)&nbsp;above generally will be subject to U.S.&nbsp;federal
income tax, net of certain deductions, at the same tax rates applicable to U.S.&nbsp;persons. Any gains described in (a)&nbsp;above
of a Non-U.S.&nbsp;Holder that is a foreign corporation may also be subject to an additional &ldquo;branch profits tax&rdquo; at
a rate of&nbsp;30% (or such lower rate as may be specified by an applicable income tax treaty) of its effectively connected earnings
and profits for the taxable year, as adjusted for certain items. Any U.S.&nbsp;source capital gain of a Non-U.S.&nbsp;Holder described
in (b)&nbsp;above (which may be offset by U.S.&nbsp;source capital losses during the taxable year of the disposition provided that
the Non-U.S.&nbsp;Holder has timely filed U.S.&nbsp;federal income tax returns with respect to such losses) generally will be subject
to a flat&nbsp;30% U.S.&nbsp;federal income tax (or such lower rate as may be specified by an applicable income tax treaty).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to (d)&nbsp;above,
we would not be treated as a USRPHC if less than&nbsp;50% of our assets throughout a prescribed testing period consist of interests
in real property located within the United States, excluding, for this purpose, interests in real property solely in a capacity
as a creditor. We believe that we are not currently, and do not anticipate becoming, a &ldquo;United States real property holding
corporation&rdquo; for U.S.&nbsp;federal income tax purposes<B> .</B> However, even if we are or have been a USRPHC, so long as
our Common Stock is regularly traded on an established securities market, a Non-U.S.&nbsp;Holder will not recognize taxable gain,
if any, on a sale, exchange, redemption, conversion or other taxable disposition of the Common Stock or Warrants under (d)&nbsp;above
unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>the Non-U.S.&nbsp;Holder recognizes gain on the sale, exchange, redemption, conversion or other taxable disposition of our
Common Stock which is regularly traded, and actually or constructively owns more than&nbsp;5% of our Common Stock at any time during
the five-year period ending on the date of disposition or, if shorter, the Non-U.S.&nbsp;Holder&rsquo;s holding period for the
Common Stock;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>the Non-U.S.&nbsp;Holder recognizes gain on the sale, exchange, redemption, conversion or other taxable disposition of the
Warrants, the Warrants are considered to be regularly traded on an established securities market, and the Non-U.S.&nbsp;Holder
actually or constructively owns more than&nbsp;5% of such Warrants at any time during the five-year period ending on the date of
disposition or, if shorter, the Non-U.S.&nbsp;Holder&rsquo;s holding period for the Warrants; or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>the Non-U.S.&nbsp;Holder recognizes gain on the sale, exchange, redemption, conversion or other taxable disposition of the
Warrants, the Warrants are not considered to be regularly traded on an established securities market, and, as of the latest date
that the Non-U.S.&nbsp;Holder acquired any of the Warrants, the fair market value of all Warrants held by the Non-U.S.&nbsp;Holder,
directly or indirectly, had a fair market value greater than&nbsp;5% of the fair market value of our Common Stock.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any of the three
bullet points immediately described above applies to a Non-U.S.&nbsp;Holder of our Warrants or Common Stock, then the gain recognized
by a Non-U.S.&nbsp;Holder on the sale, exchange, redemption, conversion, if applicable, or other disposition of such would be treated
as effectively connected with a U.S.&nbsp;trade or business if we are a USRPHC. In such situations, the Non-U.S.&nbsp;Holder would
be subject to U.S.&nbsp;federal income tax at applicable graduated U.S.&nbsp;federal income tax rates in much the same manner as
applicable to U.S.&nbsp;persons and may be subject to withholding tax at a&nbsp;10% rate with respect to the gross proceeds realized
with respect to the sale, exchange, redemption, conversion or other disposition of the Warrants or our Common Stock. Non-U.S.&nbsp;Holders
are urged to consult their own tax advisors in determining the U.S.&nbsp;tax consequences of their investment in the Warrants or
our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Taxation of the
Warrants. </I></B>If you exercise a Warrant, you will not recognize any gain or loss for U.S.&nbsp;federal income tax purposes
(except that gain or loss will be recognized to the extent you receive cash in lieu of a fractional common share as if you had
actually received the fractional share and the fractional share was immediately redeemed for cash). Your initial tax basis in the
security received upon exercise will be the sum of the exercise price paid and your adjusted tax basis in the warrant (excluding
any portion of such sum allocable to a fractional share), and your holding period for the security received will begin on the day
you exercise the warrant or subscription right. If you sell or exchange a warrant, you will generally recognize gain or loss equal
to the difference between the amount realized in the sale or exchange and your adjusted tax basis in the warrant sold or exchanged.
If the warrant expires unexercised, you will recognize a loss in an amount equal to your adjusted tax basis in the warrant at such
time. Any such gain or loss from the sale, exchange or expiration of the Warrants will be capital gain or loss and will be long-term
capital gain or loss if your holding period for the Warrants exceeds one year at the time of the sale, exchange or expiration.
Non-U.S.&nbsp;Holders of Warrants should see the discussion above under &ldquo;Distributions on Common Stock&rdquo; and &ldquo;Sale,
Exchange, or other Taxable Disposition of Common Stock&rdquo; and should consult their own tax advisers with respect to the United
States federal income tax and withholding tax, and state, local and foreign tax consequences of ownership and exercise, disposition
or lapsing, of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Information Reporting
and Backup Withholding. </I></B>We generally must report annually to the IRS and to each Non-U.S.&nbsp;Holder the amount of dividends
and certain other distributions we pay to such holder on our Common Stock and the amount of tax, if any, withheld with respect
to those distributions. Copies of the information returns reporting those distributions and withholding may also be made available
to the tax authorities in the country in which the Non-U.S.&nbsp;Holder is a resident under the provisions of an applicable income
tax treaty or agreement. Information reporting is also generally required with respect to proceeds from the sales and other dispositions
of our Common Stock to or through the United States office (and in certain cases, the foreign office) of a broker.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, backup
withholding of U.S.&nbsp;federal income tax, currently at a rate of&nbsp;28%, generally will apply to distributions made on our
Common Stock to, and the proceeds from sales and other dispositions of our Common Stock by, a non-corporate U.S.&nbsp;holder who:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>fails to provide an accurate taxpayer identification number;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>is notified by the IRS that backup withholding is required; or</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>in certain circumstances, fails to comply with applicable certification requirements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A Non-U.S.&nbsp;Holder
generally may eliminate the requirement for information reporting and backup withholding with respect to payments of dividends
by providing certification of its foreign status, under penalties of perjury, on a duly executed applicable IRS Form&nbsp;W-8 or
by otherwise establishing an exemption. Notwithstanding the foregoing, backup withholding may apply if either we or our paying
agent has actual knowledge or reason to know that the holder is a United States person that is not an exempt recipient.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Backup withholding
is not an additional tax. Rather, the amount of any backup withholding will be allowed as a credit against a U.S.&nbsp;holder&rsquo;s
or a Non-U.S.&nbsp;Holder&rsquo;s U.S.&nbsp;federal income tax liability and may entitle such holder to a refund, provided that
certain required information is timely furnished to the IRS. Holders are urged to consult their own tax advisors regarding the
application of backup withholding and the availability of and procedure for obtaining an exemption from backup withholding in their
particular circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Foreign Financial
Institutions. </I></B>On March&nbsp;18, 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act (the
&ldquo;Act&rdquo;). The Act imposes withholding taxes on certain types of payments made to &ldquo;foreign financial institutions&rdquo;
(as specifically defined in the Act) and certain other non-United States entities (including financial intermediaries) after December&nbsp;31,
2012. The Act imposes a&nbsp;30% withholding tax on &ldquo;withholdable payments&rdquo; to a foreign financial institution or to
a foreign non-financial entity, unless (i)&nbsp;the foreign financial institution undertakes certain diligence and reporting obligations
or (ii)&nbsp;the foreign non-financial entity either certifies it does not have any substantial United States owners or furnishes
identifying information regarding each substantial United States owner. For these purposes, a &ldquo;withholdable payment&rdquo;
includes any United States source payments of interest (including original issue discount), dividends, rents, compensation and
other fixed or determinable annual or periodical gains, profits and income. If the payee is a foreign financial institution, it
must enter into an agreement with the United States Department of the Treasury requiring, among other things, that it undertake
to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information
about such accounts, and withhold&nbsp;30% on payments to account holders whose actions prevent it from complying with these reporting
and other requirements. Although this legislation currently applies to applicable payments made after December&nbsp;31, 2012, recently
issued Proposed Treasury Regulations provide that the withholding provisions described above will generally apply to payments of
dividends on our Common Stock made on or after January&nbsp;1, 2014 and to payments of gross proceeds from a sale or other disposition
of such stock on or after January&nbsp;1, 2015. Prospective purchasers of shares of the Warrants or shares of our Common Stock
should consult their tax advisors regarding this legislation and the potential implications of this legislation on their particular
circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Legal Matters</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The validity of our
Common Stock offering hereby will be passed upon by Husch Blackwell LLP.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Experts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The audited consolidated
financial statements of Transgenomic, Inc. and its subsidiaries as of December&nbsp;31, 2011 and&nbsp;2010, and for the three-year
period ended December&nbsp;31, 2011, included in our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2011,
and the effectiveness of our internal control over financial reporting as of December&nbsp;31, 2011, incorporated by reference
in this prospectus have been audited by McGladrey&nbsp;&amp; Pullen, LLP, independent registered public accounting firm, as stated
in their report dated March&nbsp;20, 2012, which is incorporated by reference herein, and has been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting and auditing.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Where You
Can Find Additional Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We file annual, quarterly
and current reports, proxy statements and other documents with the SEC. These filings contain important information which does
not appear in this prospectus. You may read and copy, at prescribed rates, any documents we have filed with the SEC at its Public
Reference Room located at&nbsp;100 F Street, N.E., Washington, DC&nbsp;20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at&nbsp;1-800-SEC-0330. We also file these documents with the SEC electronically. You
can access the electronic versions of these filings on the SEC&rsquo;s website found at http://www.sec.gov .</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have filed with
the SEC a registration statement on Form&nbsp;S-1 relating to the securities covered by this prospectus. This prospectus is a part
of the registration statement and does not contain all the information in the registration statement. Whenever a reference is made
in this prospectus to a contract, agreement or other document, the reference is only a summary and you should refer to the exhibits
that are filed with, or incorporated by reference into, the registration statement for a copy of the contract, agreement or other
document. You may review a copy of the registration statement at the SEC&rsquo;s Public Reference Room in Washington, D.C., as
well as on the SEC&rsquo;s website.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center">Incorporation
of Certain Information by Reference</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC&rsquo;s rules
allow us to &ldquo;incorporate by reference&rdquo; into this prospectus certain information that we file with the SEC. This means
that we can include in this prospectus information by referring you to another document already on file with the SEC that contains
that information. Any information incorporated by reference into this prospectus is considered to be part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We incorporate by reference
the following documents filed with the SEC:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2011, as filed by us with the SEC on March&nbsp;14,
2012;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Our Current Report on Form&nbsp;8-K as filed by us with the SEC on January&nbsp;6, 2012;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Our Current Report on Form&nbsp;8-K as filed by us with the SEC on February&nbsp;3, 2012; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD>Our Current Report on Form&nbsp;8-K as filed by us with the SEC on February&nbsp;7, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the
foregoing, we are not incorporating by reference any information furnished and not filed with the SEC, unless, and to the extent,
expressly specified otherwise. Any statement contained in a document incorporated in this prospectus shall be deemed to be modified
or superseded to the extent that a statement contained in this prospectus modifies or supersedes such statement. Any such statement
so modified or superseded shall only be deemed to be a part of this prospectus as so modified or superseded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will provide without
charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon his or her written or oral request,
a copy of any or all of the reports or documents referred to above that have been incorporated by reference into this prospectus,
excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You may request
a copy of these filings, at no cost, by contacting:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Transgenomic, Inc.<BR>
Attn: Investor Relations<BR>
12325 Emmet Street<BR>
Omaha, NE&nbsp;68164<BR>
Phone: (402) 452-5416<BR>
Fax: (402) 452-5461<BR>
E-mail: investorrelations@transgenomic.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You also may access
these filings on our website at <U>www.transgenomic.com </U>under Investor Relations Real Time Filings. We do not incorporate the
information on our website into this prospectus or any supplement to this prospectus and you should not consider any information
on, or that can be accessed through, our website as part of this prospectus or any supplement to this prospectus (other than those
filings with the SEC that we specifically incorporate by reference into this prospectus or any supplement to this prospectus).</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">33,000,000 SHARES OF COMMON STOCK<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TRANSGENOMIC, INC.<BR>
<BR>
PROSPECTUS<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">April 6, 2012<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Neither we nor the selling shareholders have authorized any
dealer, salesperson or other person to give any information or to make any representations not contained in this prospectus or
any prospectus supplement. You must not rely on any unauthorized information. This prospectus is not an offer to sell these securities
in any jurisdiction where an offer or sale is not permitted. The information in this prospectus is current as of the date of this
prospectus. You should not assume that this prospectus is accurate as of any other date.<BR STYLE="mso-special-character: line-break">
<BR STYLE="mso-special-character: line-break">
</P>

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