The Company reported a loss of $1,712,000 for the three months ended June 30, 2013. At June 30, 2013 and March 31, 2013, the Company’s accumulated deficit amounted to $139,457,000 and $137,745,000, respectively. The Company had working capital of $4,191,000 and $6,407,000 as of June 30, 2013 and March 31, 2013, respectively. The Company may need to raise additional capital from external sources in order to continue the longer term efforts contemplated under its business plan. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to pursue its product development initiatives, penetrate markets for the sale of its products and continue as a going concern. Upon the closing of the Company’s subsidiary Ruthigen, Inc.’s initial public offering, the Company will be repaid for all costs incurred and advanced related to the initial public offering. At June 30, 2013, these costs amounted to $553,000 which is reported as deferred offering costs in the accompanying condensed consolidated balance sheet.

The Company currently anticipates that its cash and cash equivalents will be sufficient to meet its working capital requirements to continue its sales and marketing and research and development through at least July 1, 2014. However, in order to execute the Company’s long-term Microcyn® product development strategy and to penetrate new and existing markets, the Company may need to raise additional funds through public or private equity offerings, debt financings, corporate collaborations or other means.

Management believes that the Company has access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company has not secured any commitment for new financing at this time, nor can it provide any assurance that new financing will be available on commercially acceptable terms, if needed. If the Company is unable to secure additional capital, it may be required to curtail its research and development initiatives and take additional measures to reduce costs in order to conserve its cash.