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<div> NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Nature of Business Arrowhead Research Corporation is a biopharmaceutical company developing targeted RNAi therapeutics. The Company is leveraging its proprietary drug delivery technologies to develop targeted drugs based on the RNA interference (RNAi) mechanism that efficiently and specifically silence target genes. Arrowhead technologies also enable partners to create peptide-drug conjugates (PDCs) that specifically home to cell types of interest while sparing off-target tissues. Arrowhead’s pipeline includes programs in chronic hepatitis B virus, obesity, and cancer. Financing and Liquidity The Company has historically financed its operations through the sale of equity securities of Arrowhead or its Subsidiaries. Development activities have required significant capital investment since the Company’s inception and we expect our current operations to continue to require cash investment to continue development. At June 30, 2013, the Company had $33.1 million in cash, including cash invested in short term investments, to fund operations. During the nine months ended June 30, 2013, the Company’s cash position increased $25.6 million. During the nine months ended June 30, 2013, the Company received $42.4 million from the issuance of equity, net of fees. Other cash collections were $1.6 million. The Company had cash outflow of $14.0 million related to its continuing operating activities. In September 2011, the Company entered into an equity line facility whereby it has the ability to draw capital up to $15 million, subject to certain provisions, including maintaining a minimum stock price of $2.00 per share. During fiscal 2012, the Company drew $1 million from this facility. During fiscal 2013, the Company has not made any draws on this facility. In December 2012, the Company sold 1.8 million units at a price of $2.26 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants was $1.83 as of June 30, 2013. Proceeds net of expenses from the offering were $3.8 million. In January 2013, the Company sold 1.7 million units at a price of $2.12 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants was $1.83 as of June 30, 2013.  Proceeds net of expenses from the offering were $3.3 million. In May 2013, the Company sold 14.3 million shares of Arrowhead common stock at a price of $1.83 per share, and 9,900 shares of Arrowhead series B convertible preferred stock at a price of $1,000 per share. The series B preferred stock is convertible into common stock at a conversion price of $1.83. Proceeds, net of expenses from the offering, were $35.4 million. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2012 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012. The consolidated financial statements of the Company include the accounts of Arrowhead and its wholly-owned and majority-owned Subsidiaries. Prior to April 2008, Arrowhead’s Subsidiaries included Insert Therapeutics, Inc. (“Insert”), which was merged with Calando in April 2008. The merged entity is majority-owned by Arrowhead and continues to operate under the name of Calando. Arrowhead sold its interests in Unidym and Tego in 2011 and 2009, respectively. Unidym and Tego results are included in the Income (Loss) from Discontinued Operations. Income (Loss) from Discontinued Operations also includes Aonex Technologies, Inc. (“Aonex”), sold in 2008 and Nanotechnica, Inc. (“Nanotechnica”), dissolved in 2005. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers cash and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of money market instruments that are maintained by an investment manager. Investments The Company invests excess cash balances in short-term and long-term marketable debt securities.  Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper.  The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity – Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities – Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale – Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities.  At June 30, 2013, the Company classified all of its investments as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet.  Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. As of June 30, 2013, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. The amortized cost of such bonds was $4,058,003.  Gross unrealized losses were $17,208; there were no gross unrealized gains. The total fair value of the short-term investments was $4,040,795. As of September 30, 2012, short-term investments of $106,500 were comprised of equity securities of Wisepower as a result of our disposition of Unidym, such investment has been impaired and its carrying value has been reduced to zero. See further information regarding fair market value of marketable debt securities in footnote 10 – Fair Value Measurements & Derivative Instruments, such fair market data is obtained from independent pricing services.   Reverse Stock Split On November 17, 2011, the Company effected a 1 for 10 reverse stock split. As a result of the reverse stock split, each ten shares of the Company’s Common Stock issued and outstanding immediately prior to the reverse stock split were combined into one share of Common Stock. Also, as a result of the reverse stock split, the per share exercise price, and the number of shares of Common Stock underlying Company stock options, warrants, and any Common Stock based equity grants outstanding immediately prior to the reverse stock split was proportionally adjusted, based on the one-for-ten split ratio, in accordance with the terms of such options, warrants or other Common Stock based equity grants. Stockholders received a cash payment in lieu of any resulting fractional shares. All share and per share amounts in these financial statements have been retrospectively adjusted to reflect the reverse stock split. Unless otherwise noted, all impacted information has been retroactively adjusted to reflect this reverse stock split. Recently Issued Accounting Standards In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which amended the guidance in ASU 2011-08 to simplify the testing of indefinite-lived intangible assets other than goodwill for impairment. ASU 2012-02 becomes effective for annual and interim impairment tests performed for fiscal years beginning on or after September 15, 2012 and earlier adoption is permitted. We adopted this standard in the third quarter of fiscal year 2012. We believe adoption did not have a material effect on our financial statements. In September 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-08, Intangibles – Goodwill and Other (Topic 350) – Testing Goodwill for Impairment (ASU 2011-08), to allow entities to use a qualitative approach to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If after performing the qualitative assessment an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step goodwill impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step goodwill impairment test. ASU 2011-08 is effective for us in fiscal 2013 and earlier adoption is permitted. The adoption of ASU 2011-08 is not anticipated to impact on our financial position, results of operations or cash flows. In May 2011, the Financial Accounting Standards Board (“FASB”) issued ASU 2011-04, Fair Value Measurement (“ASU 2011-04”), which amended ASC 820, Fair Value Measurements (“ASC 820”), providing a consistent definition and measurement of fair value, as well as similar disclosure requirements between U.S. GAAP and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles, clarifies the application of existing fair value measurement and expands the disclosure requirements. ASU 2011-04 was effective for us beginning January 1, 2012. The adoption of ASU 2011-04 did not have a material effect on our consolidated financial statements or disclosures. </div>

<div> NOTE 2. NOTE RECEIVABLE As part of the proceeds from the sale of Unidym in January 2011, Arrowhead received a Note Receivable from Wisepower (the “Wisepower Note”) in the face amount of $2.5 million. On January 24, 2013, the Company entered into an agreement to sell the Wisepower Note. As consideration for selling the Wisepower Note the Company received 1,570,000 shares of Wisepower stock, (the “First Tranche”). Per the terms of the agreement, the Company was entitled to receive additional consideration (the “Second Tranche”) based on the proceeds realized from the First Tranche, at which time the Company would deliver the Wisepower Note to the Purchaser. As of June 30, 2013, the Company sold 1,170,000 shares of Wisepower from the First Tranche, and realized approximately $1.2 million in proceeds prior to a trading suspension of Wisepower stock on March 22, 2013. On July 26, 2013, the trading of Wisepower stock resumed, and the company sold the remaining shares from the First Tranche, and realized approximately $260,000. It is unclear when or if the Company will receive the Second Tranche. The Company recorded the $1.2 million proceeds realized from the First Tranche, as of June 30, 2013, against the $2.5 million value of the Wisepower Note, and has recorded a reserve for the uncollectible portion of the Wisepower Note.   As of June 30, 2013, the receivable was recorded at $260,000, which was collected in July 2013.The Company is pursuing its rights under the applicable agreements. </div>

<div> NOTE 3. ACQUISITIONS Roche Madison On October 21, 2011, the Company entered into a Stock and Asset Purchase Agreement (the “RNAi Purchase Agreement”) with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd (collectively, “Roche”), pursuant to which the Company purchased from Roche (i) all of the outstanding common stock of Roche Madison Inc. (“Roche Madison”) and (ii) the intellectual property rights then held by Roche related to its RNAi business and identified in the RNAi Purchase Agreement (the “Transaction”). In consideration for the purchase of Roche Madison and the Roche RNAi assets, the Company issued to Roche a promissory note with a principal value of $50,000 and 1,141,596 shares of Common Stock.The acquisition provided technology, particularly related to RNAi delivery, and a state-of-the-art lab facility. Pursuant to the RNAi Purchase Agreement, Roche has a right of first negotiation on certain product candidates developed by the Company and its affiliates relating to the purchased assets. If the Company proposes to out-license or enters into substantive negotiations to out-license, any Clinical Candidate or Existing Candidate (as such terms are defined in the RNAi Purchase Agreement), the Company must give notice of the Candidate it proposes to out-license and negotiate exclusively and in good faith with Roche for 90 days regarding the applicable out-license. This right of first negotiation applies to all Existing Candidates (as defined in the RNAi Purchase Agreement) and the first five Clinical Candidates for which the Company delivers notice to Roche and subsequently enters into an out-license. In addition to the consideration paid by the Company as per the closing terms, the Company is obligated to make certain royalty and milestone payments to Roche upon the occurrence of certain events. For certain product candidates that are developed by the Company or its affiliates and that are covered by a valid claim by the patent rights transferred in the Transaction for which the Company and Roche do not enter into a licensing arrangement, the Company will be obligated to pay a 3% royalty on Net Sales (as defined in the RNAi Purchase Agreement), provided that the royalty rate may be reduced or offset in certain circumstances. The obligation to pay royalties on such candidates will last until the later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate. The Company will also be obligated to make cash payments to Roche upon the achievement of various milestones, including the first regulatory approval of an Existing Candidate in certain jurisdictions and upon certain annual sales milestones for Existing Candidates that may receive regulatory approval. The potential payments range from $2,500,000 to $6,000,000 per milestone. Based on the Company’s estimate of future payments, a net present value of $84,935 was calculated as contingent consideration, and is recorded as a part of other noncurrent liabilities. The following table summarizes the estimated fair values at the date of acquisition:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current assets </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  432,709</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Property and equipment </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  7,215,206</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,174,935</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Other noncurrent assets </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6,264</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current liabilities </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (414,122 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Noncurrent liabilities </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,570,072 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Gain on purchase </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,576,106 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,268,814</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> The purchase consideration was composed of the following:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Promissory note due Roche </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  50,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  84,935</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Shares issued to Roche </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,133,879</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,268,814</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> We estimated the fair value of the assets and liabilities acquired through various valuation techniques including a market approach and an income approach. Because the net identifiable tangible and intangible assets and liabilities were in excess of the purchase price, a gain on the purchase of $1.6 million was recorded. The most significant assets capitalized were research equipment and certain in-process research and development. We believe that we were able to acquire these assets at a reasonable purchase price and generate a gain on the transaction due in part from the seller’s desire to exit the relatively early stage of the RNAi business, as compared to the seller’s other business operations, as well as the seller’s desire to dispose of certain on-going costs associated with the facility, primarily lease costs and personnel costs, which were synergistic to the Company’s strategy to establish a research facility to advance development efforts for its drug product candidates. Alvos Therapeutics On April 5, 2012, the Company entered into a Stock Purchase Agreement to purchase all of the outstanding shares of Alvos Therapeutics, Inc., (“Alvos”), a privately held company that licensed a large platform of proprietary human-derived Homing Peptides, and the method for their discovery, from MD Anderson Cancer Center. In conjunction with the acquisition, Arrowhead hired one employee from Alvos, and retained one employee on a consulting basis. In exchange for all of the outstanding shares of Alvos, Arrowhead issued an upfront payment of 315,457 shares of Common Stock. The former Alvos stockholders are also eligible to receive additional issuances of stock valued at up to $23.5 million at the time of issuance based on the future achievement of clinical, regulatory and sales milestones. Based on the Company’s estimate of future payments, a net present value of $88,686 was calculated as contingent consideration, and is recorded as a part of other noncurrent liabilities. The Alvos acquisition provided key technology in targeted therapeutics. The following table summarizes the estimated fair values at the date of acquisition:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current assets </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,332</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> In-process R&D </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current liabilities </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (113,033 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,088,686</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> The purchase consideration was comprised of shares of Arrowhead Common Stock issued to the former shareholders of Alvos Therapeutics, Inc.   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Shares issued </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  315,457</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Price per share </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6.34</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Share consideration </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,000,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  88,686</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,088,686</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> NOTE 4. INTANGIBLE ASSETS Intangible assets consist of in-process research and development (IPR&D) not subject to amortization, and patents and other intangible assets subject to amortization, which were capitalized as a part of a business combination. IPR&D represents projects that have not yet received regulatory approval and are classified as indefinite assets until the successful completion or the abandonment of the associated R&D efforts. Accordingly, during the development period after the date of acquisition, these assets will not be amortized until approval is obtained in one or more jurisdictions which, individually or combined, are expected to generate a significant portion of the total revenue expected to be earned by an IPR&D project. At that time, we will determine the useful life of the asset, reclassify the asset out of IPR&D and begin amortization. If the associated R&D effort is abandoned the related IPR&D assets would be written off and we would record an impairment loss. Intangible assets subject to amortization include license agreements and patents capitalized as part of a business combination. The license agreements are being amortized over the estimated life remaining at the time of acquisition, which was four years. Patents were amortized over a period of three years to twenty years. The weighted average original amortization period is twelve years. Patents have been fully amortized or impaired.  Amortization of license agreements is expected to be approximately $14,000 for the balance of fiscal year 2013, and $55,000 for fiscal years 2014 and 2015, $13,000 in 2016, $0 in 2017 and thereafter. We review amounts capitalized as in-process research and development for impairment at least annually in the fourth quarter, and whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In the event the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values. We continue to test our indefinite-lived IPR&D assets for potential impairment until the projects are completed or abandoned. During the quarter ended June 30, 2013, the Company recorded an impairment charge relating to patents that were licensed from the California Institute of Technology (the “License”), and had been capitalized.  The license agreement was terminated, and it was determined that the value of the capitalized patents had been impaired.  Accordingly, the Company recorded an impairment of $1.3 million during the quarter ended June 30, 2013, and is reflected in its operating expenses in its Statement of Operations.   The below table provides details of our intangible asset balances:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets not subject to amortization </th> <th colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets subject to amortization </th> <th colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total Intangible assets </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at September 30, 2011 </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,731,211</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,731,211</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Additions – Madison acquisition </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  944,935</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  230,000</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,174,935</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Additions – Alvos acquisition </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Amortization </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (293,964 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (293,964 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at September 30, 2012 </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,117,322</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,667.247</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,784,569</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Amortization </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (222,345 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (222,345 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Impairment </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,308,047 </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,308,047 </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,117,322</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  136,855</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,254,177</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div>   </div>

<div> NOTE 5. INVESTMENT IN SUBSIDIARIES In addition to 100% ownership interest in Arrowhead Madison, Inc. and Alvos Therapeutics, Inc., Arrowhead also maintains majority ownership in Calando Pharmaceuticals, Ablaris Therapeutics, Inc., and a minority investment in Leonardo Biosystems, Inc. Calando Pharmaceuticals, Inc. Calando is a clinical stage RNAi therapeutics company. On April 17, 2008, Calando merged with and into Insert, with Insert as the surviving company. In January 2011, Arrowhead invested $9.1 million, through a cash investment of $1.0 million and the conversion of $8.1 million intercompany debt, acquiring newly issued Calando Series B and Series C preferred stock. As of June 30, 2013, Calando owed to Arrowhead $3.9 million under a series of 8% simple interest notes and advances. It is expected that these loans will either be repaid or converted to equity in the future. The balance of the notes and advances is eliminated in consolidation. As of June 30, 2013, Arrowhead owned 79% of the outstanding shares of Calando and 76% on a fully diluted basis. Ablaris Therapeutics, Inc. Ablaris was formed and began operations in the first quarter of fiscal 2011, based on the license of anti-obesity technology developed at the MD Anderson Cancer Center at the University of Texas. During the year ended September 30, 2011, Ablaris raised $2.9 million in cash, of which $1.3 million was invested by Arrowhead and $1.6 million was invested by outside investors, through the issuance of Ablaris Series A Preferred stock. As of June 30, 2013, Ablaris owed to Arrowhead $1.3 million from cash advances. It is expected that these advances will either be repaid or converted to equity in the future. The balance of the advances is eliminated in consolidation. As of June 30, 2013, Arrowhead owned 64% of the outstanding shares of Ablaris and 64% on a fully diluted basis. Leonardo Biosystems, Inc. Leonardo is developing a drug-delivery platform technology based on novel methods of designing porous silicon microparticles that selectively accumulate in tumor vasculature. Arrowhead accounts for its investment in Leonardo using the cost method of accounting. As of June 30, 2013, Leonardo owed to Arrowhead $858,000, included in other receivables. The Company has provided a full reserve against the receivable from Leonardo. As of June 30, 2013, Arrowhead’s ownership interest in Leonardo was 3%. </div>

<div> NOTE 6. NOTES PAYABLE In 2008 and 2009, Calando entered into Unsecured Convertible Promissory Note Agreements (“Notes”) for $2.5 million with accredited investors and Arrowhead, which invested $800,000 in the Notes offering.Except for one Note in the principal amount of $500,000, all Notes and accrued interest were converted into a total of 2,950 shares of Calando Series A Preferred Stock in 2009. The remaining Note was renegotiated and extended until November 26, 2013. The terms of the new note include a 10% interest rate and require two times principal payment upon certain events as defined in the note and at maturity. At June 30, 2013, the Note is reflected on the balance sheet at the maturity amount of $1,000,000 less a discount of $74,351. Also, as part of the acquisition of Roche Madison, Inc. in October 2011, the Company recorded a note payable of $50,000, which is due October 17, 2014 and is reflected in long-term liabilities on the Company’s balance sheet. </div>

<div> NOTE 7. STOCKHOLDERS’ EQUITY At June 30, 2013, the Company had a total of 150,000,000 shares of capital stock authorized for issuance, consisting of 145,000,000 shares of Common Stock, par value $0.001, and 5,000,000 shares of Preferred Stock, par value $0.001. At June 30, 2013, 31,306,318 shares of Common Stock were outstanding, and 9,900 shares of Preferred Stock were outstanding. At June 30, 2013, 3,369,960 shares were reserved for issuance upon exercise of outstanding stock options.  An additional 6,055,535 shares were reserved for the issuance of shares related to warrants outstanding at June 30, 2013. On September 30, 2011, the Company sold 1,191,473 shares of Common Stock at a price of $3.80 per share. Cash proceeds received in fiscal 2011 were $4.5 million. On October 4, 2011, the Company completed a second closing of the offering in which the Company sold 138,158 shares of Common Stock at a price of $3.80 per share. Cash proceeds were $525,000. In October 2011, the Company entered into Subscription Agreements with certain accredited investors (the “Series A Purchasers”), pursuant to which the Company issued and sold an aggregate of 1,015 shares of Series A Preferred Convertible Stock, $0.001 par value per share, at a purchase price of $1,000 per share. The aggregate purchase price paid for the shares of Series A Preferred was $1,015,000. On February 16, 2012, upon approval by the Company’s shareholders, 1,015 shares of Arrowhead Series A Preferred Convertible Stock, $0.001 par value per share, were converted to 275,782 shares of Common Stock. On October 21, 2011, the Company entered into a Subscription Agreement with an accredited investor, pursuant to which the Company issued and sold an aggregate of 675,000 shares of Common Stock, $0.001 par value per share, at a purchase price of $3.70 per share. The aggregate purchase price paid by the purchaser for the shares of Common Stock was $2,497,500. On August 10, 2012, the Company sold 2,260,869 units at a price of $2.76 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.75 shares of common stock at an exercise price of $3.25. Gross proceeds from the offering were $6.2 million excluding offering fees and expenses. In December 2012, the Company sold 1,825,079 units at a price of $2.26 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock. Gross proceeds from the offering were $4.1 million excluding offering fees and expenses. The exercise price of these warrants was $1.83 as of June 30, 2013. In January 2013, the Company sold 1,667,051 units at a price of $2.12 per unit. Each unit consisted of one share of common stock and a warrant to purchase 0.5 shares of common stock. Gross proceeds from the offering were $3.5 million excluding offering fees and expenses. The exercise price of these warrants was $1.83 as of June 30, 2013. In May 2013, the Company sold 14.3 million shares of Arrowhead common stock at a price of $1.83 per share and 9,900 shares of Arrowhead series B convertible preferred stock at a price of $1,000 per share. The series B preferred stock is convertible into common stock at a conversion price of $1.83. Gross proceeds were $36 million. No warrants were issued in the May 2013 financing. The following table summarizes information about warrants outstanding at June 30, 2013:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> Exercise prices </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Number of Warrants </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Remaining Life in Years </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  70.60</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  94,897</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.9</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  20.00</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  386,400</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0.1</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.00</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,155,023</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.4</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.09</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  461,024</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.4</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.38</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  322,150</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.5</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.16</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.5</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.25</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,695,654</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.83</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  987,543</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.5</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.83</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  79,013</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.83</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  833,530</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.6</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.65</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  39,301</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> Total warrants outstanding </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6,055,535</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div>   </div>

<div> NOTE 8. LEASES The Company’s research facility in Madison, Wisconsin is leased through February 28, 2019. Monthly rental expense is approximately $22,000. Other monthly rental expenses include common area maintenance and real estate taxes totaling approximately $13,000 per month. Utilities costs are approximately $16,000 per month. Including monthly payments recorded under a capital lease of approximately $21,000, total monthly costs are approximately $72,000 per month. The Company’s corporate headquarters are located in Pasadena, California; Rental expense is approximately $13,000 per month. Facility and equipment rent expense, related to continuing operations, for the nine months ended June 30, 2013 and 2012 was $407,000 and $345,000, respectively. From inception to date through June 30, 2013, rent expense was $4,532,000. As of June 30, 2013, future minimum lease payments due in fiscal years under capitalized leases are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  64,211</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2014 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2015 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2016 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2017 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2018 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2019 and thereafter </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  107,020</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Less interest </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (118,697 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Principal </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,336,764</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Less current portion </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (219,690 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Noncurrent portion </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,117,074</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> As of June 30, 2013, future minimum lease payments due in fiscal years under operating leases are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  94,661</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2014 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  434,229</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2015 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  445,921</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2016 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  457,961</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2017 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  470,154</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2018 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  359,370</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2019 and thereafter </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  125,415</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,387,711</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> NOTE 9. STOCK-BASED COMPENSATION Arrowhead has two plans that provide for equity-based compensation. Under the 2000 Stock Option Plan, 153,200 shares of Arrowhead’s Common Stock are reserved for issuance upon exercise of non-qualified stock options. No further grants can be made under the 2000 Stock Option Plan. Under the 2004 Equity Incentive Plan, 3,000,000 shares of Common Stock are authorized for issuance, of which 510,166 shares are available as of June 30, 2013 for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards, by the Compensation Committee of the Board of Directors, to employees, consultants and others. 2,965,860 shares of Common Stock are reserved for the grant of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards, by the Compensation Committee of the Board of Directors, to employees, consultants and others. As of June 30, 2013, there were options granted and outstanding to purchase 152,900 and 2,455,694 shares of Common Stock under the 2000 Stock Option Plan and the 2004 Equity Incentive Plan, respectively, and 251,200 options outstanding that were issued outside of equity incentive plans, as inducement options. During the nine months ended June 30, 2013, 949,000 options were granted under the 2004 Equity Incentive Plan. The following tables summarize information about stock options under the 2000 Stock Option Plan, the 2004 Stock Option Plan and as inducement options outside of an equity incentive plan:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">     </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Number of Options Outstanding </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Weighted- Average Exercise Price Per Share </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Weighted- Average Remaining Contractual Term </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Aggregate Intrinsic Value </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At September 30, 2011 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  729,096</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  9.03</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Granted </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,229,500</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.40</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cancelled </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (42,919 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  11.77</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercised </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (4,883 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.20</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At September 30, 2012 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,910,794</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6.01</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Granted </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  949,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.03</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cancelled </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercised </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,859,794</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.69</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 8.2 years </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercisable At June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,129,939</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  7.01</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 6.6 years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> </table> </div> Stock-based compensation expense for the nine months ended June 30, 2013 and 2012 was $1,114,375 and $837,188, respectively. There is no income tax benefit as the Company is currently operating at a loss and an actual income tax benefit may not be realized. The loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance. The fair value of the options granted by Arrowhead during the nine months ended June 30, 2013 and 2012 is estimated at $1,197,588 and $3,505,912, respectively. The aggregate fair value of options granted by Calando during the nine months ended June 30, 2013 and 2012 is estimated at $0 and $33,690, respectively. The intrinsic value of the options exercised during the nine months ended June 30, 2013 was $0, there were no options exercised during the nine months ended June 30, 2013. As of June 30, 2013, the pre-tax compensation expense for all unvested stock options at Arrowhead in the amount of approximately $3,775,514 will be recognized in our results of operations over a weighted average period of 2.9 years. As of June 30, 2013, the pre-tax compensation expense for all unvested stock options at Calando in the amount of approximately $39,169 will be recognized in our results of operations over a weighted average period of 2.2 years. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by our stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. The assumptions used to value stock options are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="6" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Nine months ended June 30, </th> </tr> <tr> <th style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="3"> 2013 </th> <th style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> 2012 </th> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk-free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="3">  0.7% to 1.25%  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  0.9% to 1.7%  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  90% to 100%  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life (in years) </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="3">  5.5 to 6.25  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  5.5 to 6.25  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Weighted average grant date fair value per share of options granted </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  1.26</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.79</td> </tr> </table> </div> The dividend yield is zero as the Company currently does not pay a dividend. The risk-free interest rate is based on the U.S. Treasury bond. Volatility is estimated based on volatility average of the Company’s Common Stock price. </div>

<div> NOTE 10. FAIR VALUE MEASUREMENTS & DERIVATIVE INSTRUMENTS The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, the Company is required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows: Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly. Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management’s best estimate of what market participants would use in valuing the asset or liability at the measurement date. The following table summarizes fair value measurements at June 30, 2013 and September 30, 2012 for assets and liabilities measured at fair value on a recurring basis: June 30, 2013:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Level 1 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 2 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Level 3 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Total </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cash and cash equivalents </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,025,930</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,025,930</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Marketable securities (1) </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,040,795</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,040,795</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative assets </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative liabilities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> </tr> </table> </div> September 30, 2012:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 1 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 2 </td> <td colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 3 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cash and cash equivalents </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,377,288</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,377,288</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Marketable securities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  106,500</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  106,500</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative assets </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative liabilities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> </tr></table> </div> (1)    Marketable securities at June 30, 2013 were comprised of investments classified as “held-to-maturity”, and are recorded at amortized cost on the Company’s Consolidated Balance Sheet. As part of the proceeds from the sale of Unidym in January 2011, Arrowhead received a bond from Wisepower in the face amount of $2.5 million. The bond is convertible to Wisepower common stock at a price of $2.00 per share. The conversion feature is subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the conversion feature on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative asset. The fair value of the conversion feature is estimated at the end of each reporting period and the change in the fair value of the conversion feature is recorded as a nonoperating gain/loss as change in value of derivatives in Company’s Consolidated Statement of Operations. During the quarter ended March 31, 2013, the trading of Wisepower stock was halted. Trading resumed in July 2013, but the trading price is significantly below the conversion price.  The Company determined that the probability of realizing value from the conversion feature was remote, and the derivative asset value has been reduced to zero. During the nine months ended June 30, 2013, the Company recorded a loss from the change in fair value of the derivative asset of $250,250. The assumptions used in valuing the derivative asset were as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> NA </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.23</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 0 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 1.3 Years </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  72</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  72</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> </table> </div> The following is a reconciliation of the derivative asset:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  161,125</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Receipt of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Increase in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  89,125</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Receipt of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (250,250 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> As part of an equity financing in June 2010, Arrowhead issued warrants to acquire up to 329,649 shares of Common Stock (the “2010 Warrants”), of which 322,150 warrants were outstanding at June 30, 2013, which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2010 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2010 Warrants, the exercise price of the 2010 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. Similarly, as part of a financing in December 2012, Arrowhead issued warrants to acquire up to 912,543 shares of Common Stock (the “2012 Warrants”) which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2012 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2012 Warrants, the exercise price of the 2012 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. Further, as part of a financing in January 2013, Arrowhead issued warrants to acquire up to 833,530 shares of Common Stock (the “2013 Warrants”) which contain a mechanism to adjust the strike price upon the issuance of certain dilutive equity securities. If during the term of the 2013 Warrants, the Company issues Common Stock at a price lower than the exercise price of the 2013 Warrants, the exercise price of the 2013 Warrants would be reduced to the amount equal to the issuance price of the Common Stock. As a result of these features, the 2010 Warrants, the 2012 Warrants, and the 2013 Warrants are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the Warrants on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the Warrants is estimated at the end of each reporting period and the change in the fair value of the Warrants is recorded as a nonoperating gain or loss in the Company’s consolidated statement of operations. During the nine months ended June 30, 2013, the Company recorded a non-cash gain from the change in fair value of the derivative liability of $465,869. The assumptions used in valuing the derivative liabilities were as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2010 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.51</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.31</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 2.5 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 3.2 Years </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  100</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2012 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  1.41</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 4.5 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  1.41</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 4.6 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> </table> </div> The following is a reconciliation of the derivative liability related to these warrants:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  944,980</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (297,767 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,137,896</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,015,923</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (465,869 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> In conjunction with the financing of Ablaris during the year ended September 30, 2011, Arrowhead sold exchange rights to certain investors whereby the investors have the right to exchange their shares of Ablaris for a prescribed number of shares of Arrowhead Common Stock based upon a predefined ratio. The exchange rights have a seven-year term. During the first year, the exchange right allows the holder to exchange one Ablaris share for 0.06 Arrowhead shares. This ratio declines to 0.04 in the second year, 0.03 in the third year and 0.02 in the fourth year. In the fifth year and beyond the exchange ratio is 0.01. Exchange rights for 675,000 Ablaris shares were sold during the year ended September 30, 2011, and remain outstanding. The exchange rights are subject to derivative accounting as prescribed under ASC 815. Accordingly, the fair value of the exchange rights on the date of issuance was estimated using an option pricing model and recorded on the Company’s consolidated balance sheet as a derivative liability. The fair value of the exchange rights is estimated at the end of each reporting period and the change in the fair value of the exchange rights is recorded as a nonoperating gain or loss in the Company’s Consolidated Statement of Operations. During the nine months ended June 30, 2013, the Company recorded a non-cash gain from the change in fair value of the derivative liability of $9,877. The assumptions used in valuing the derivative liability were as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.41</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0.62</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 4.5 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 5.3 Years </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  100</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> </table> </div> The following is a reconciliation of the derivative liability related to these exchange rights:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2010 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  100,650</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (69,758 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  30,892</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (20,520 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  10,372</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (9,877 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  495</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div> During the year ended September 30, 2012, contingent consideration was recorded upon the acquisitions of Roche Madison, Inc. and Alvos Therapeutics, Inc., totaling $173,621. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. The measurement is based upon unobservable inputs supported by little or no market activity based on our own assumptions and experience. Estimating timing to complete the development, and obtain approval of products is difficult, and there are inherent uncertainties in developing a product candidate, such as obtaining U.S. Food and Drug Administration (FDA) and other regulatory approvals. In determining the probability of regulatory approval and commercial success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period. Changes in the fair value of the contingent consideration obligations are recorded in our consolidated statement of operations. There were no changes in contingent consideration fair value.   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Purchase price contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration payments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in fair value of contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Purchase price contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration payments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in fair value of contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div> The carrying amounts of the Company’s other financial instruments, which include accounts receivable, accounts payable, and accrued expenses approximate their respective fair values due to the relatively short-term nature of these instruments. The carrying value of the Company’s debt obligations approximates fair value based on market interest rates. </div>

<div> NOTE 11. SUBSEQUENT EVENTS On August 6, 2013, Calando, a majority-owned subsidiary of the Company, terminated a License Agreement with the California Institute of Technology (the “License”).  The License provided Calando with exclusive rights to develop and commercialize therapeutics based on the linear cyclodextrin drug delivery technology invented at Caltech.  The drug delivery technology platforms, CyclosertTM and RONDELTM, as well as the drug candidates IT-101 and CALAA-01, were developed based on the licensed technology.  Calando was responsible to direct and pay for the prosecution of the patents and patent applications covered by the License and to progress the technology. In conjunction with a previous business acquisition, the patents covered by this license agreement had been capitalized, and had a net book value of $1.3 million at June 30, 2013.  Management has determined that the value of the patents was impaired as of June 30, 2013, and the Company recorded an impairment charge of $1.3 million, and is presented as a part of operating expenses in the period ended June 30, 2013. </div>

<div> Nature of Business Arrowhead Research Corporation is a biopharmaceutical company developing targeted RNAi therapeutics. The Company is leveraging its proprietary drug delivery technologies to develop targeted drugs based on the RNA interference (RNAi) mechanism that efficiently and specifically silence target genes. Arrowhead technologies also enable partners to create peptide-drug conjugates (PDCs) that specifically home to cell types of interest while sparing off-target tissues. Arrowhead’s pipeline includes programs in chronic hepatitis B virus, obesity, and cancer. </div>

<div> Financing and Liquidity The Company has historically financed its operations through the sale of equity securities of Arrowhead or its Subsidiaries. Development activities have required significant capital investment since the Company’s inception and we expect our current operations to continue to require cash investment to continue development. At June 30, 2013, the Company had $33.1 million in cash, including cash invested in short term investments, to fund operations. During the nine months ended June 30, 2013, the Company’s cash position increased $25.6 million. During the nine months ended June 30, 2013, the Company received $42.4 million from the issuance of equity, net of fees. Other cash collections were $1.6 million. The Company had cash outflow of $14.0 million related to its continuing operating activities. In September 2011, the Company entered into an equity line facility whereby it has the ability to draw capital up to $15 million, subject to certain provisions, including maintaining a minimum stock price of $2.00 per share. During fiscal 2012, the Company drew $1 million from this facility. During fiscal 2013, the Company has not made any draws on this facility. In December 2012, the Company sold 1.8 million units at a price of $2.26 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants was $1.83 as of June 30, 2013. Proceeds net of expenses from the offering were $3.8 million. In January 2013, the Company sold 1.7 million units at a price of $2.12 per unit in a public offering. Each unit consisted of one share of Common Stock and a warrant to purchase 0.5 share of Common Stock. The exercise price of these warrants was $1.83 as of June 30, 2013.  Proceeds net of expenses from the offering were $3.3 million. In May 2013, the Company sold 14.3 million shares of Arrowhead common stock at a price of $1.83 per share, and 9,900 shares of Arrowhead series B convertible preferred stock at a price of $1,000 per share. The series B preferred stock is convertible into common stock at a conversion price of $1.83. Proceeds, net of expenses from the offering, were $35.4 million. </div>

<div> Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of results for a full year. The September 30, 2012 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. This financial information should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2012. The consolidated financial statements of the Company include the accounts of Arrowhead and its wholly-owned and majority-owned Subsidiaries. Prior to April 2008, Arrowhead’s Subsidiaries included Insert Therapeutics, Inc. (“Insert”), which was merged with Calando in April 2008. The merged entity is majority-owned by Arrowhead and continues to operate under the name of Calando. Arrowhead sold its interests in Unidym and Tego in 2011 and 2009, respectively. Unidym and Tego results are included in the Income (Loss) from Discontinued Operations. Income (Loss) from Discontinued Operations also includes Aonex Technologies, Inc. (“Aonex”), sold in 2008 and Nanotechnica, Inc. (“Nanotechnica”), dissolved in 2005. All significant intercompany accounts and transactions are eliminated in consolidation, and noncontrolling interests are accounted for in the Company’s financial statements. Certain reclassifications have been made to prior period financial statements to conform to the current period presentation. </div>

<div> Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Actual results could differ from those estimates. </div>

<div> Cash and Cash Equivalents The Company considers cash and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents consist primarily of money market instruments that are maintained by an investment manager. </div>

<div> Investments The Company invests excess cash balances in short-term and long-term marketable debt securities.  Investments may consist of certificates of deposits, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper.  The Company accounts for its investment in marketable securities in accordance with FASB ASC 320, Investments – Debt and Equity Securities. This statement requires certain securities to be classified into three categories: Held-to-maturity – Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities – Debt and equity securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale – Debt and equity securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities.  At June 30, 2013, the Company classified all of its investments as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet.  Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. As of June 30, 2013, all short-term investments were comprised of corporate bonds with maturity dates of less than one year. The amortized cost of such bonds was $4,058,003.  Gross unrealized losses were $17,208; there were no gross unrealized gains. The total fair value of the short-term investments was $4,040,795. As of September 30, 2012, short-term investments of $106,500 were comprised of equity securities of Wisepower as a result of our disposition of Unidym, such investment has been impaired and its carrying value has been reduced to zero. See further information regarding fair market value of marketable debt securities in footnote 10 – Fair Value Measurements & Derivative Instruments, such fair market data is obtained from independent pricing services.   </div>

<div> Reverse Stock Split On November 17, 2011, the Company effected a 1 for 10 reverse stock split. As a result of the reverse stock split, each ten shares of the Company’s Common Stock issued and outstanding immediately prior to the reverse stock split were combined into one share of Common Stock. Also, as a result of the reverse stock split, the per share exercise price, and the number of shares of Common Stock underlying Company stock options, warrants, and any Common Stock based equity grants outstanding immediately prior to the reverse stock split was proportionally adjusted, based on the one-for-ten split ratio, in accordance with the terms of such options, warrants or other Common Stock based equity grants. Stockholders received a cash payment in lieu of any resulting fractional shares. All share and per share amounts in these financial statements have been retrospectively adjusted to reflect the reverse stock split. Unless otherwise noted, all impacted information has been retroactively adjusted to reflect this reverse stock split. </div>

<div> The following table summarizes the estimated fair values at the date of acquisition:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current assets </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  432,709</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Property and equipment </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  7,215,206</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,174,935</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Other noncurrent assets </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6,264</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current liabilities </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (414,122 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Noncurrent liabilities </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,570,072 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Gain on purchase </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,576,106 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,268,814</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The purchase consideration was composed of the following:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Promissory note due Roche </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  50,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  84,935</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Shares issued to Roche </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,133,879</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5,268,814</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The following table summarizes the estimated fair values at the date of acquisition:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current assets </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,332</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> In-process R&D </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Current liabilities </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (113,033 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,088,686</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The purchase consideration was comprised of shares of Arrowhead Common Stock issued to the former shareholders of Alvos Therapeutics, Inc.   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Shares issued </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  315,457</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Price per share </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6.34</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Share consideration </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,000,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  88,686</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total purchase consideration </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,088,686</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The below table provides details of our intangible asset balances:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets not subject to amortization </th> <th colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Intangible assets subject to amortization </th> <th colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total Intangible assets </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at September 30, 2011 </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,731,211</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,731,211</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Additions – Madison acquisition </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  944,935</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  230,000</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,174,935</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Additions – Alvos acquisition </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,172,387</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Amortization </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (293,964 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (293,964 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at September 30, 2012 </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,117,322</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,667.247</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,784,569</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Amortization </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (222,345 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (222,345 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Impairment </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,308,047 </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (1,308,047 </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> ) </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,117,322</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  136,855</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,254,177</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div>   </div>

<div> The following table summarizes information about warrants outstanding at June 30, 2013:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> Exercise prices </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Number of Warrants </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Remaining Life in Years </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  70.60</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  94,897</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.9</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  20.00</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  386,400</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0.1</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.00</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,155,023</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.4</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.09</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  461,024</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.4</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.38</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  322,150</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.5</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.16</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.5</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.25</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,695,654</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.83</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  987,543</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.5</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.83</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  79,013</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1.83</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  833,530</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.6</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.65</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  39,301</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.1</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> Total warrants outstanding </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6,055,535</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div>   </div>

<div> As of June 30, 2013, future minimum lease payments due in fiscal years under capitalized leases are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  64,211</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2014 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2015 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2016 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2017 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2018 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  256,846</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2019 and thereafter </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  107,020</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Less interest </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (118,697 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Principal </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,336,764</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Less current portion </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (219,690 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Noncurrent portion </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,117,074</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> As of June 30, 2013, future minimum lease payments due in fiscal years under operating leases are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  94,661</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2014 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  434,229</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2015 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  445,921</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2016 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  457,961</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2017 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  470,154</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2018 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  359,370</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2019 and thereafter </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  125,415</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,387,711</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The following tables summarize information about stock options under the 2000 Stock Option Plan, the 2004 Stock Option Plan and as inducement options outside of an equity incentive plan:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">     </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Number of Options Outstanding </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Weighted- Average Exercise Price Per Share </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="2" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Weighted- Average Remaining Contractual Term </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Aggregate Intrinsic Value </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At September 30, 2011 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  729,096</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  9.03</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Granted </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,229,500</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.40</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cancelled </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (42,919 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  11.77</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercised </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (4,883 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  5.20</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At September 30, 2012 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,910,794</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  6.01</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Granted </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  949,000</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2.03</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cancelled </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercised </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Balance At June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,859,794</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4.69</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 8.2 years </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Exercisable At June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,129,939</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  7.01</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 6.6 years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> </table> </div>   </div>

<div> The assumptions used to value stock options are as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="6" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Nine months ended June 30, </th> </tr> <tr> <th style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="3"> 2013 </th> <th style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> 2012 </th> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  0</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk-free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="3">  0.7% to 1.25%  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  0.9% to 1.7%  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  90% to 100%  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life (in years) </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="3">  5.5 to 6.25  </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">  5.5 to 6.25  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Weighted average grant date fair value per share of options granted </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  1.26</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3.79</td> </tr> </table> </div>   </div>

<div> The following table summarizes fair value measurements at June 30, 2013 and September 30, 2012 for assets and liabilities measured at fair value on a recurring basis: June 30, 2013:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Level 1 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 2 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Level 3 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </th> <th colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top"> Total </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cash and cash equivalents </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,025,930</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  29,025,930</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Marketable securities (1) </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,040,795</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  4,040,795</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative assets </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative liabilities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> </tr> </table> </div> September 30, 2012:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 1 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 2 </td> <td colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="4" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Level 3 </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="3" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="3" style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Total </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Cash and cash equivalents </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,377,288</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-top-color:#000000; border-top-style:solid; border-top-width:0.5pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  3,377,288</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Marketable securities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  106,500</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  106,500</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative assets </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Derivative liabilities </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td colspan="2" style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-top:0.7pt; vertical-align:top; text-align:right"></td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right" colspan="2"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> </tr></table> </div>   </div>

<div> The assumptions used in valuing the derivative asset were as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </th> <th style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </th> <th style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:1pt; padding-left:0.7pt; padding-right:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </th> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> NA </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.23</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 0 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 1.3 Years </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  72</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  72</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> </table> </div>   </div>

<div> The following is a reconciliation of the derivative asset:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  161,125</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Receipt of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Increase in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  89,125</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  250,250</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Receipt of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (250,250 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The assumptions used in valuing the derivative liabilities were as follows:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2010 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.51</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  0.31</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 2.5 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 3.2 Years </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  100</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2012 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  1.41</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 4.5 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> 2013 Warrants </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> June 30, 2013 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> September 30, 2012 </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Risk free interest rate </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">  1.41</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Expected life </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> 4.6 Years </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Dividend yield </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> none </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Volatility </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">  69</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:left">%</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2"> N/A </td> </tr> </table> </div>   </div>

<div> The following is a reconciliation of the derivative liability related to these warrants:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  944,980</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (297,767 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  647,213</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,137,896</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  1,015,923</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (465,869 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  2,335,163</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> The following is a reconciliation of the derivative liability related to these exchange rights:   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2010 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  100,650</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (69,758 </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  30,892</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (20,520 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  10,372</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Issuance of instruments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in value </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> (9,877 </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> )  </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Net settlements </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  495</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">    </td> </tr> </table> </div>   </div>

<div> There were no changes in contingent consideration fair value.   <div style="text-align: left;"> <table cellspacing="0" cellpadding="0" style="display: block; text-align: left; border: 0"> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2011 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Purchase price contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration payments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in fair value of contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at September 30, 2012 </td> <td style="background-color:#cff0fc; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Purchase price contingent consideration </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Contingent consideration payments </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Change in fair value of contingent consideration </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top" colspan="2">   </td> <td style="border-bottom-color:#000000; border-bottom-style:solid; border-bottom-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">—</td> <td style="padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> <tr> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top"> Value at June 30, 2013 </td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-top:0.7pt; vertical-align:top; text-align:right">$</td><td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right"></td> <td style="background-color:#cff0fc; border-bottom-color:#000000; border-bottom-style:double; border-bottom-width:1.5pt; border-top-color:#000000; border-top-style:solid; border-top-width:0.75pt; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top; text-align:right">  173,621</td> <td style="background-color:#cff0fc; padding-right:0.7pt; padding-top:0.7pt; vertical-align:top">   </td> </tr> </table> </div>   </div>

42400000

1600000

15000000

2.00

1000000

3800000

1800000.0 2.26 Each unit consisted of one share of Common Stock and a warrant to purchase 0.5

1.83

3300000

1667051 2.12 Each unit consisted of one share of Common Stock and a warrant to purchase 0.5

1.83

14300000.0

9900

1.83

1000

1.83

35400000

0.1

17208

4040795

2500000

1570000 260000 1170000

1200000

260000

432709

7215206

1174935

6264

414122

1570072

1576106

5268814

84935

5133879

5268814

29332

2172387

113033

2088686

315457

6.34

2000000

88686

2088686

1141596 P90D 0.03 Later of (i) the expiration of the last to expire patent right related to such product candidate that was transferred in the Transaction and (ii) ten years after the first commercial sale of such product candidate.

2500000

6000000

84935 315457

23500000

944935

2172387

3117322

1731211

230000

293964

1667247

222345

136855

1731211 1174935 2172387 4784569 3254177

P4Y

P3Y

P20Y

P12Y

14000

55000

13000

1.00 9100000 1000000 8100000 3900000 0.08

0.79

0.76 1300000

2900000

1600000 1300000

0.64

0.64 858000

0.03

2500000 2500000 800000 500000

2950

2013-11-26

Two times principal payment upon certain events

0.10

1000000

74351

50000

2014-10-17

70.60

20.00

5.00

5.09

1.38

4.16

3.25

1.83

2.83

1.83

2.65

94897

386400

1155023

461024

322150

1000

1695654

987543

79013

833530

39301

6055535

P3Y10M24D P1M6D P1Y4M24D P1Y4M24D P2Y6M P3Y6M P3Y1M6D P4Y6M P3Y1M6D P4Y7M6D P3Y1M6D

150000000

3369960

6055535

1191473

138158

3.80

4500000

525000

0.001

1015

1000

1015000

275782

675000

3.70

2497500

2260869

2.76

0.75

6200000

3.25

1825079

2.26

0.5

4100000

1.83

3500000

1.83

36000000

64211

256846

256846 107020

118697

1336764

94661

434229

445921

457961

470154

359370 125415

2387711

22000

13000

21000 13000

16000

72000 407000 345000

4532000

729096

1229500

42919

4883

1910794

949000

2859794

1129939

9.03

4.40

11.77

5.20

6.01

2.03

4.69

7.01

P8Y2M12D

P6Y7M6D

0.0

0.007

0.009

0.0125

0.017

0.69

0.90

P5Y6M

P6Y3M

1.26

3.79

153200

2965860

152900

2455694

251200

3000000

510166

949000

1114375

837188

1197588 3505912 0 33690

39169 3775514 P2Y2M12D P2Y10M24D

29025930

4040795

2335163

173621

3377288

106500

250250

647213

173621

0.0023

P0Y

P1Y3M18D

0.72

161125

-89125

250250

0.0051

0.0031

P2Y6M

P3Y2M12D

0.69

0.0141

P4Y6M

0.69

0.0141

P4Y7M6D

0.69

944980

-297767

647213

1137896

1015923

-465869

2335163

0.0141

0.0062

P4Y6M

P5Y3M18D

0.0069

100650

-69758

30892

-20520

10372

-9877

495

173621

2500000 2.00

250250

329649 912543 833530

322150

P7Y 0.06 0.04 0.03 0.02 0.01 675000

9877

1300000

(1) Marketable securities at June 30, 2013 were comprised of investments classified as “held-to-maturity”, and are recorded at amortized cost on the Company’s Consolidated Balance Sheet.