We are authorized to issue 383,333,333 shares of common stock, no par value, and 1,666,666 shares of preferred stock, no par value. In our proxy
statement for the 2012 annual meeting of our shareholders, we have included a proposal to increase the total number of authorized shares from 384,999,999 to
751,666,666 and the total number of authorized shares of common stock from 383,333,333 to 750,000,000 shares. As of July 31, 2012, there were
283,408,995 shares of common stock outstanding, warrants to purchase approximately 65,230,425 shares of common stock outstanding and no shares of
preferred stock outstanding. In addition, as of July 31, 2012, 4,557,049 shares of common stock were reserved for issuance under our equity compensation
plans, 217,818 shares of common stock were reserved for issuance under our employee stock purchase plan and 65 shares of common stock were reserved for
issuance upon exercise of outstanding restricted share rights.
On April 15, 2007, we effected a one-for-four reverse stock split of our common stock, on August 31, 2008, we effected a one-for-ten reverse stock
split of our common stock and on May 15, 2011, we effected a one-for-six reverse stock split of our common stock.
On June 29, 2012, we received a notice from NASDAQ stating that, based on the closing bid price of our common stock for the thirty (30) consecutive
business days preceding such date, we no longer met the minimum $1.00 per share requirement for continued listing on The NASDAQ Capital Market. In
accordance with NASDAQ Listing Rule 5810(c)(3)(A), we were provided a grace period of one hundred eighty (180) calendar days, or until December 26,
2012, to regain compliance. We may achieve compliance during the 180-day period if the closing bid price of our common stock is at least $1.00 per share for
a minimum of ten (10) consecutive trading days before December 26, 2012. We may be eligible for an additional grace period if we meet the initial listing
standards, with the exception of bid price, for The NASDAQ Capital Market. If we meet the initial listing criteria, with the exception of bid price, we may be
granted an additional 180 calendar day compliance period.
As of August 2, 2012, the closing bid price of our common stock for the last thirty (30) days has been below $1.00 per share. If we are unable to attain
compliance with the minimum bid price requirement, whether by effectuating a reverse stock split of our common stock or otherwise, our common stock may
be delisted from The NASDAQ Capital Market. To address our non-compliance with the minimum bid price requirement, our board of directors may
determine in its discretion that we should complete a reverse stock split, which may be implemented prior to December 26, 2012, or the Reverse Stock Split.
If our board of directors approves the Reverse Stock Split, then all of the outstanding and authorized shares of the Company's common stock immediately
prior to the effective date of the Reverse Stock Split, or the Effective Date, will be reduced in proportion to the ratio of the Reverse Stock Split. In such event,
proportionate adjustments would also be made to our outstanding equity awards, as well as the number of shares of our common stock available for award
grants under our 2007 Equity Incentive Plan, as amended and restated. There can be no assurance that the Reverse Stock Split will have the intended effect or
that any increase in the trading price of our common stock will be proportional to the decrease in the number of outstanding shares.
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