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&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;On July 13, 2006, the FASB issued FASB Interpretation No. 48 (FIN
48), subsequently codified in ASC 740, Income Taxes, which clarifies the accounting for uncertainty in income taxes recognized
in an entity's financial, and prescribes a recognition threshold and measurement attributes for financial statement disclosure
of tax positions taken or expected to be taken on a tax return. Under ASC 740, the impact of an uncertain income tax position on
the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant
taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
Additionally, ASC 740 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure and transition.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;We adopted the provisions of ASC 740 relating to uncertain tax provisions
on April 1, 2007, and have commenced analyzing filing positions in all of the federal and state jurisdictions where it is required
to file income tax returns, as well as all open tax years in these jurisdictions. As a result of adoption, no additional tax liabilities
have been recorded. There are no unrecognized tax benefits as of&amp;#160;March 31, 2013 or March 31, 2012. As of March 31, 2013, we
have not yet completed our analysis of the deferred tax assets relating to federal and state net operating losses of $38.3 million&amp;#160;and
$33.1 million, respectively, and we believe that it is more likely than not that an ownership change may have occurred. As such,
this amount and the offsetting valuation allowance have been removed from our deferred tax assets. We plan to complete a Section
382 analysis regarding the limitation of the net operating loss prior to utilizing any net operating losses.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;Due to the existence of the valuation allowance, any future changes
in our unrecognized tax benefits will not impact our effective tax rate.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;We are subject to taxation in the U.S. and state jurisdictions. Our
tax years for 2009 and forward are subject to examination by the U.S. and 2008 and forward by California tax authorities due to
the carryforward of unutilized net operating losses. We are currently not under examination by any taxing authorities.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;Our practice is to recognize interest and/or penalties related to
income tax matters in income tax expense. During the twelve months ended March 31, 2013, we did not recognize any interest or penalties
relating to tax matters. Upon adoption of ASC 740 on April 1, 2007, we did not record any interest or penalties.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;At March 31, 2013, we had net deferred tax assets of approximately
$7.4 million. These deferred tax assets are primarily composed of capitalized research and development costs and other accruals.
Due to uncertainties surrounding our ability to generate future taxable income to realize these assets, a full valuation has been
established to offset the net deferred tax assets. Additionally, the future utilization of the our net operating loss carryforwards
to offset future taxable income may be subject to an annual limitation as a result of ownership changes that may have occurred
previously or that could occur in the future.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;Significant components of our net deferred tax assets at March 31,
2013 and 2012 are shown below (in thousands). A valuation allowance of $7.4 million has been established to offset the net deferred
tax assets as of March 31, 2013, as realization of such assets is uncertain.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="6" style="text-align: center"&gt;&lt;font style="font-size: 8pt; color: black"&gt;YEAR ENDED MARCH 31,&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="border-bottom: black 1pt solid; text-align: center"&gt;&lt;font style="font-size: 8pt; color: black"&gt;2013&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="border-bottom: black 1pt solid; text-align: center"&gt;&lt;font style="font-size: 8pt; color: black"&gt;2012&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td&gt;&lt;font style="font-size: 8pt; color: black"&gt;Deferred tax assets:&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td style="width: 68%; padding-left: 9pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Capitalized research and development&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 13%; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;3,442&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 13%; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;3,442&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="padding-bottom: 1pt; padding-left: 9pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Other&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;3,951&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;3,803&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td&gt;&lt;font style="font-size: 8pt; color: black"&gt;Total deferred tax assets&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;7,393&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;7,245&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Total deferred tax liabilities&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td&gt;&lt;font style="font-size: 8pt; color: black"&gt;Net deferred tax assets&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;7,393&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;7,245&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Valuation allowance for deferred tax assets&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(7,393&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(7,245&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 1pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="padding-bottom: 2.5pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Net deferred tax assets&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;The provision for income taxes on earnings subject to income taxes
differs from the statutory federal rate at March 31, 2013, due to the following (in thousands):&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="border-bottom: black 1pt solid; padding-top: 3pt; text-align: center"&gt;&lt;font style="font-size: 8pt; color: black"&gt;2013&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="border-bottom: black 1pt solid; padding-top: 3pt; text-align: center"&gt;&lt;font style="font-size: 8pt; color: black"&gt;2012&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="width: 68%; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Federal income taxes at 34%&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 13%; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(1,663&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 13%; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(2,758&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td style="padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;State income tax, net of federal benefit&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(285&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;(473&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Tax effect on non-deductible expenses and credits&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;77&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;1,244&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;)&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;Increase in valuation allowance&lt;sup&gt;1&lt;/sup&gt;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;1,871&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; padding-top: 3pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 1pt solid; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;1,987&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 1pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #EEEEEE"&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; padding-top: 3pt"&gt;&lt;font style="font-size: 8pt; color: black"&gt;$&lt;/font&gt;&lt;/td&gt;
    &lt;td style="border-bottom: black 2.25pt double; padding-top: 3pt; text-align: right"&gt;&lt;font style="font-size: 8pt; color: black"&gt;&amp;#150;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="padding-top: 3pt; padding-bottom: 2.5pt"&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
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&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 3pt 0 0"&gt;&lt;sup&gt;1&lt;/sup&gt;&amp;#160;&amp;#160;The change in the valuation analysis
includes the removal of the current year net operating loss.&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 8pt Times New Roman, Times, Serif; margin: 0"&gt;Pursuant to Internal Revenue Code Sections 382, use of our net operating
loss carryforwards may be limited if a cumulative change in ownership of more than 50% occurs within a three-year period.&lt;/p&gt;



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