5.      Financial Instruments:

The carrying amount of the Company's financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, notes receivable, accrued expenses and other liabilities approximates fair value due to their relatively short maturity. Prior to February 9, 2010, the Company sold products in various global markets. As a result, the Company was exposed to changes in foreign currency exchange rates.  The Company does not hold derivative financial instruments for speculative purposes.  Foreign currency transaction gains and (losses) included in other income (expense), were $5 and ($2) for the three months ended June 30, 2012 and 2011, respectively.  On June 30, 2012, the Company had no open foreign exchange contracts to sell Euros or any other foreign currencies.  On June 30, 2012, the Company had 8,348 liability warrants outstanding with an exercise price of $30.00 expiring between June 2013 and September 2013, and 477 liability warrants outstanding with an exercise price of $72.00 expiring on August 30, 2012.  The Company recorded a non-cash gain related to the warrants of $1 in the quarter ended June 30, 2012.

Changes in the exchange rate between the Euro and the U.S. dollar are currently immaterial to our operating results. Exposure to foreign currency exchange rate risk may increase over time as our business evolves.  If our efforts to continue to support Sequel Power are successful, we expect that sales in international markets will again account for a significant portion of any future revenue, since Sequel Power's development projects are located in several countries outside the United States.

The balance in notes receivable at June 30, 2012 was $300, and consisted of an outstanding payment related to the Company's investment in CollabRx.  The Company's investment in CollabRx is in the form of a promissory note that bears interest at a rate of 0.28% per year compounded annually and matures on or about November 7, 2012.