USE OF PROCEEDS

We estimate that our net proceeds from the sale of the shares of common stock in this offering will be approximately $93.6 million, or $107.8 million if the underwriters exercise their over-allotment option in full, assuming a public offering price of $17.00 per share after deducting underwriting discounts and commissions and estimated offering expenses of approximately $1.25 million.

We intend to use these net proceeds primarily for:

- technology research and product and services development;

- scale-up of sales and marketing;

- capital expenditures;

- working capital; and

- general corporate purposes.

We currently anticipate that over the next two years, we will use approximately one-fifth of the net proceeds from this offering for research and development expenses to expand our technologies and products. We also intend to use $1.7 million for the payment of dividend arrearages to all of our preferred stockholders in accordance with the terms of our preferred stock. We may also use a portion of the net proceeds for the acquisition of, or investment in, companies, technologies, products or assets that complement our business. The amounts and timing of our actual expenditures will depend upon numerous factors, including the status of our product development and commercialization efforts, the amount of proceeds actually raised in this offering, the amount of cash generated by our operations, competitive forces, sales and marketing activities, changes in or termination of existing collaboration and licensing arrangements and our need for manufacturing capacity. We have no present understandings, commitments or agreements to enter into any potential acquisitions or investments. Other than the approximately $1.7 million for the payment of dividend arrearages and the proceeds we have identified for research and development, we have not determined the amounts we plan to spend on any of the areas listed above or the timing of these expenditures. As a result, our management will have broad discretion to allocate the net proceeds of this offering. Pending such uses, we intend to invest the net proceeds of this offering in short-term, investment-grade interest-bearing securities or guaranteed obligations of the U.S. government.