Pro Forma Condensed Consolidated Balance Sheet

October 31,
2014

ASSETS

Current assets:

Cash and cash equivalents

$

8,861,246

Short-term investments in certificates of deposit

2,500,000

Accounts receivable

400,000

Prepaid expense and other current assets

60,577

Total current assets

11,821,823

Patent, net of accumulated depreciation of $314,453

2,721,658

Property and equipment, net

11,875

Total assets

$

14,555,356

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

1,047,466

Royalties and contingent legal fees

560,076

Total current liabilities

1,607,542

Patent acquisition obligation

3,236,281

Total liabilities

4,843,823

Shareholders’ equity:

Preferred stock, par value $100 per share

-

Series A preferred stock, par value $100 per share

350,000

Common stock, par value $.01 per share

2,196,922

Additional paid-in capital

146,232,373

Accumulated deficit

(139,067,762)

Total shareholder’s equity

9,711,533

Total liabilities and shareholders’ equity

$

14,555,356