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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>As filed with the Securities
and Exchange Commission on March 25, 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: 0in"><B>Registration Number 333-______</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>SECURITIES AND EXCHANGE
COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Form S-1</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>REGISTRATION STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><I>UNDER</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><I>THE SECURITIES ACT OF
1933</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><img src="tlogo.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>CRYOPORT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(Exact Name of Registrant
as Specified in its Charter)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 33%; text-align: center"><font style="font-size: 10pt"><b>Nevada</b></font></td>
    <TD STYLE="width: 34%; text-align: center"><font style="font-size: 10pt"><b>3086</b></font></td>
    <TD STYLE="width: 33%; text-align: center"><font style="font-size: 10pt"><b>88-0313393</b></font></td></tr>
<tr>
    <TD STYLE="vertical-align: bottom; text-align: center"><b>(State&nbsp;or&nbsp;Other</b><br>
<b>Jurisdiction&nbsp;of</b><br>
<b>Incorporation&nbsp;or</b><br>
<b>Organization)</b></td>
    <TD STYLE="vertical-align: bottom; text-align: center"><b>(Primary&nbsp;Standard</b><br>
<b>Industrial</b><br>
<b>Classification&nbsp;Code</b><br>
<b>Number)</b></td>
    <TD STYLE="vertical-align: top; text-align: center"><b>(I.R.S.&nbsp;Employer</b><br>
<b>Identification&nbsp;No.)</b></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>20382 Barents Sea Circle,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Lake Forest, CA 92630</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(949) 470-2300</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(Address, Including Zip
Code, and Telephone Number, Including Area Code, of Principal Executive Offices)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Robert Stefanovich</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Chief Financial Officer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>20382 Barents Sea Circle,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Lake Forest, CA 92630</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(949)&nbsp;470-2300</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(Name, Address, Including
Zip Code, and Telephone Number, Including Area Code, of Agent For Service</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B><I>Copies to:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Anthony Ippolito, Esq.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Snell&nbsp;&amp; Wilmer
L.L.P.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>600 Anton Boulevard, Suite
1400</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Costa Mesa, California
92626</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Tel: (714)&nbsp;427-7000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Fax: (714)&nbsp;427-7799</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Approximate date of
commencement of proposed sale to the public:</B> As soon as practicable after this registration statement becomes effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If any of the securities
being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities
Act of 1933, as amended, check the following box.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">x</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If this form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If this form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If this form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo;
in Rule 12b-2 of the Exchange Act. (Check one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="width: 18%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Large&nbsp;accelerated&nbsp;filer</font></td>
    <td style="width: 54%; text-align: left; text-indent: 0in"><font style="font: 10pt Wingdings">&uml;</font></td>
    <td style="width: 26%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Accelerated&nbsp;filer</font></td>
    <td style="width: 2%; text-align: left; text-indent: 0in"><font style="font: 10pt Wingdings">&uml;</font></td></tr>
<tr style="vertical-align: bottom">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Non-accelerated filer</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font: 10pt Wingdings">&uml;</font><font style="font-size: 10pt">&nbsp;&nbsp;(Do not check if a smaller reporting company)</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Smaller&nbsp;reporting&nbsp;company</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font: 10pt Wingdings">x</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">CALCULATION OF REGISTRATION
FEE</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">Title of Each Class of Securities to be Registered</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Proposed Maximum <BR>Aggregate <BR>Offering Price (1)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Amount of <BR>Registration Fee</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 68%; text-align: left; text-indent: -0.25in; padding-left: 0.25in">Shares of common stock, $0.001 par value,&nbsp;&nbsp;and warrants issued in the offering</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">15,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,743</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.25in; padding-left: 0.25in">Shares of common stock underlying the warrants included in the Offering (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">16,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,917</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.25in; padding-left: 0.25in">Share of common stock, $0.001 par value, and warrants, issuable upon exercise of the representative of the underwriters&rsquo; over-allotment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,250,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">261</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in">Shares of common stock underlying the warrants included in the Offering, issuable upon exercise of the representative of the underwriters&rsquo; over-allotment (2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">825,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">96</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">34,575,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,017</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><I>Unless otherwise indicated,
all share amounts and prices assume the consummation of a reverse stock split, at a ratio of 8-to-1, to be effected prior to the
effectiveness of the registration statement, with the exact timing of the reverse stock split to be determined by the registrant&rsquo;s
Board of Directors.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 5%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 95%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(2)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Pursuant to Rule 416, the registrant is also registering an indeterminate number of additional shares of common stock that are issuable by reason of the anti-dilution provisions of the warrants.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>The registrant hereby
amends this registration statement on such date or date(s) as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration statement shall thereafter become effective in
accordance with Section&nbsp;8(a) of the Securities Act, or until the registration statement shall become effective on such date
as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt; color: red">The information
in this prospectus is not complete and may be changed. The securities may not be sold until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <TD STYLE="width: 34%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: left; text-indent: 0in; padding-top: 4pt; padding-bottom: 4pt"><font style="font-size: 10pt; color: red">PRELIMINARY PROSPECTUS</font></td>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: center; text-indent: 0in; padding-top: 4pt; padding-bottom: 4pt"><font style="font-size: 10pt; color: red">SUBJECT TO COMPLETION</font></td>
    <TD STYLE="width: 33%; border-top: Black 1pt solid; border-bottom: Black 1pt solid; text-align: right; text-indent: 0in; padding-top: 4pt; padding-bottom: 4pt"><font style="font-size: 10pt; color: red">DATED MARCH __, 2015 </font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-size: 12pt"><B>3,409,091
Shares of</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-size: 12pt"><B>Common
Stock and Warrants</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 24.5pt"><img src="tlogo1.jpg"></P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 100%; border-bottom: Black 1pt solid; text-align: center; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This is a firm commitment
public offering of 3,409,091 shares of common stock and warrants of Cryoport, Inc. consisting of one share of common stock and
a warrant to purchase one share of common stock at an exercise price of 110% of the public offering price of a share of common
stock in this offering. The common stock and warrants are immediately separable and will be issued separately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our common stock is currently
traded on the OTC Bulletin Board under the symbol CYRX. Prior to the effectiveness of the registration statement of which this
prospectus is a part, we will effect a reverse stock split anticipated to be on a 8-to-1 basis. On March 12, 2015, the last reported
sale price for our common stock was $4.40 per share (after giving effect to the anticipated 8-to-1 reverse stock split). We have
applied for listing of our common stock on the NASDAQ Capital Market under the symbol [&ldquo;*&rdquo;]. No assurance can be given
that our application will be approved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Investing in our common
stock and warrants involves a high degree of risk. Please read &ldquo;Risk Factors&rdquo; beginning on page 9 of this prospectus
for a discussion of information that should be considered in connection with an investment in our common stock and warrants.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Neither the Securities
and Exchange Commission (the &ldquo;SEC&rdquo;) nor any state securities commission has approved or disapproved these securities
or determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Per&nbsp;share<BR> of&nbsp;common&nbsp;stock<BR> and&nbsp;warrant</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Public offering price</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Underwriting discounts and commissions (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Proceeds, before offering expenses, to us (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.2in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Does not include a non-accountable expense allowance
equal to 1% of the gross proceeds of this offering (or $150,000) payable to Aegis Capital Corp., the representative of the underwriters.
See &ldquo;Underwriting&rdquo; for a description of compensation payable to the underwriters.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 13.5pt; text-align: justify; text-indent: -13.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.2in">(2)</TD><TD STYLE="text-align: justify">We estimate that the total expenses of this offering will be approximately $350,000, consisting
of $150,000 for the underwriter&rsquo;s non-accountable expense allowance (equal to 1% of the gross proceeds of this offering)
and $200,000 for legal, accounting, printing costs and various fees associated with the registration and listing of our shares
of common stock and warrants.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have granted a 45-day
option to the representative of the underwriter to purchase $2,250,000 of shares of common stock and warrants to be offered by
us solely to cover over-allotments, if any. If the underwriters exercise their right to purchase additional shares of common stock
and warrants to cover over-allotments, we estimate that we will receive gross proceeds of $2,250,000 from the sale of 511,364 shares
of common stock and warrants being offered at an assumed public offering price of $4.40 per share of common stock and a warrant
to purchase one share of common stock and net proceeds of $2,092,500 after deducting $157,500 for underwriting discounts and commissions.
The shares of common stock and warrants issuable upon exercise of the underwriter option are identical to those offered by this
prospectus and have been registered under the registration statement of which this prospectus forms a part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with this
offering, we have also agreed to issue to Aegis Capital Corp., the underwriters&rsquo; representative, a warrant to purchase up
to 4% of the shares of common stock included in the shares of common stock and warrants sold (or 136,364 shares based on 3,409,091
shares of common stock and warrants). If the underwriters&rsquo; representative exercises this warrant, each share of common stock
may be purchased at $6.05 per share (137.5% of the price of the shares of common stock and warrants sold in this offering), commencing
on a date that is one year from the effective date of the registration statement and expiring five years from the effective date
of the registration statement.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The underwriters expect
to deliver our shares of common stock and warrants to purchasers in this offering on or about [*], 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Aegis Capital Corp</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>TABLE OF CONTENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 95%; padding-left: 0.1in; text-align: left; text-indent: -0.1in">&nbsp;</td>
    <td style="width: 5%; text-align: right; text-indent: 0in"><font style="font-size: 10pt"><b>Page</b></font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><font style="font-size: 10pt"><A HREF="#a_001">PROSPECTUS SUMMARY</A></font></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">1</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_002"><font style="font-size: 10pt">RISK FACTORS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">9</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_003"><font style="font-size: 10pt">FORWARD-LOOKING STATEMENTS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">22</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_004"><font style="font-size: 10pt">USE OF PROCEEDS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">23</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_005"><font style="font-size: 10pt">MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">23</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_006"><font style="font-size: 10pt">DETERMINATION OF OFFERING PRICE</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">25</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_025">CAPITALIZATION</A></TD>
    <TD NOWRAP STYLE="text-align: right; text-indent: 0in">25</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_007"><font style="font-size: 10pt">DILUTION</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">26</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_008"><font style="font-size: 10pt">MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</font></A></td>
    <TD NOWRAP STYLE="text-align: right; text-indent: 0in; vertical-align: bottom"><font style="font-size: 10pt">28</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_009"><font style="font-size: 10pt">BUSINESS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">42</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_010"><font style="font-size: 10pt">DESCRIPTION OF PROPERTY</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">57</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_011"><font style="font-size: 10pt">LEGAL PROCEEDINGS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">58</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_012"><font style="font-size: 10pt">DIRECTORS AND EXECUTIVE OFFICERS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">58</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_013"><font style="font-size: 10pt">SUMMARY COMPENSATION TABLE</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">61</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_014"><font style="font-size: 10pt">OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2014</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">63</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_015"><font style="font-size: 10pt">DIRECTOR COMPENSATION</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">65</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_016"><font style="font-size: 10pt">COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">67</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_017"><font style="font-size: 10pt">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">67</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_018"><font style="font-size: 10pt">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">69</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_019"><font style="font-size: 10pt">DESCRIPTION OF SECURITIES</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">71</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_020"><font style="font-size: 10pt">UNDERWRITING </font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">72</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><font style="font-size: 10pt"><A HREF="#a_021">LEGAL MATTERS</A></font></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">80</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_022"><font style="font-size: 10pt">EXPERTS</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">80</font></td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_023"><font style="font-size: 10pt">WHERE YOU CAN FIND MORE INFORMATION</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">80</font></td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.1in; text-align: left; text-indent: -0.1in"><A HREF="#a_024"><font style="font-size: 10pt">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</font></A></td>
    <td nowrap style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">81</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">You may only rely on the
information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or
made available to you. We have not authorized anyone to provide you with different information. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other than the common stock and the warrants offered by this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any common stock or warrants
in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made
in connection with this prospectus shall, under any circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information incorporated by reference to this prospectus is correct as of
any time after its date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_001"></A><B>PROSPECTUS SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>This summary highlights
information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing
in our shares of common stock and warrants. You should read this entire prospectus carefully, especially the risks of investing
in our common stock and warrants discussed under &ldquo;Risk Factors&rdquo; beginning on page 9 and the consolidated financial
statements and notes to those consolidated financial statements, before making an investment decision. Cryoport, Inc. is referred
to throughout this prospectus as &ldquo;Cryoport,&rdquo; &ldquo;Company,&rdquo; &ldquo;we&rdquo; or &ldquo;us.&rdquo;</I></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport is a leading
provider of cryogenic logistics solutions to the life sciences industry through its purpose-built proprietary packaging, information
technology and specialized cold chain logistics expertise. We provide leading edge logistics solutions for biologic materials such
as immunotherapies, stem cells, CAR-T cells, and reproductive cells for clients worldwide including points-of-care, CRO&rsquo;s,
central laboratories, biopharmaceuticals, contract manufacturing, health centers and university research. Our packaging is built
around our proprietary Cryoport Express<SUP>&reg;</SUP> liquid nitrogen dry vapor shippers, which are validated to maintain a constant
-150&deg;C temperature for a ten day dynamic shipment duration. Our information technology centers on our Cryoportal&trade; Logistics
Management Platform, which facilitates management of the entire shipment process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We view our solutions
as disruptive to &ldquo;older technologies&rdquo; such as dry ice, in that our solutions provide reliable, economic alternatives
to existing solutions and services utilized for frozen shipping in life sciences, including immunotherapies, stem cells, cell lines,
vaccines, diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances and other items that
require continuous exposure to frozen or cryogenic temperatures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;</SUP>
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal&trade;. The Cryoportal&trade;
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal&trade; records
and retains a fully documented &ldquo;chain-of-custody&rdquo; and, at the client&rsquo;s option, &ldquo;chain-of-condition&rdquo;
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The branded packaging
for our Cryoport Express<SUP>&reg;</SUP> Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express<SUP>&reg;</SUP>
Shippers. The Cryoport Express<SUP>&reg;</SUP> Shippers<SUP> </SUP>are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of &ldquo;dry vapor&rdquo; liquid nitrogen
(&ldquo;LN2&rdquo;) technology. Cryoport Express<SUP>&reg;</SUP> Shippers are International Air Transport Association (&ldquo;IATA&rdquo;)
certified and validated to maintain stable temperatures of minus 150&deg; C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express<SUP>&reg;</SUP> Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express<SUP>&reg;</SUP> CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our most used solution
is the &ldquo;turnkey&rdquo; solution, which can be accessed directly through our cloud-based Cryoportal&trade; or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express<SUP>&reg;</SUP>
Shipper to the client <FONT STYLE="color: #1A1A1A">who conveniently loads its frozen commodity into the inner chamber of the </FONT>Cryoport
Express<SUP>&reg;</SUP> Shipper<FONT STYLE="color: #1A1A1A">. The customer then closes the shipper package and reseals the shipping
box displaying the next recipient&rsquo;s address (&ldquo;Flap A&rdquo;) for pre-arranged carrier pick up. </FONT>Cryoport arranges
for the pick-up of the parcel by a shipping service provider, which is designated by the client or chosen by Cryoport, for delivery
to the client&rsquo;s intended recipient. The recipient simply opens the shipper package and removes the frozen commodity that
has been shipped. The recipient then reseals the package, displaying the nearest Cryoport Operations Center address (&ldquo;Flap
B&rdquo;), making it ready for pre-arranged carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express<SUP>&reg;</SUP>
Shipper, it is cleaned, put through quality assurance testing, and returned to inventory for reuse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, established customer facing solutions and took a consultative approach
to the market. Today, in addition to our standard &ldquo;Turn-key Solution,&rdquo; described above, we also provide the following
customer facing, value-added solutions to address our various clients&rsquo; needs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer
Staged Solution</I></B>,&rdquo; designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express<SUP>&reg; </SUP>Shippers to our customer, in an uncharged state, enabling our customer (after
training/certification) to charge them with liquid nitrogen and use our Cryoportal&trade; to enter orders with shipping and delivery
service providers for the transportation of the package.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer Managed
Solution</I></B>,&rdquo; a limited customer implemented solution, whereby we supply our Cryoport Express<SUP>&reg;</SUP> Shippers
to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of the shipping
and delivery service provider and the return of the shipper to us.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>powered by Cryoport</I></B><SUP>SM</SUP>,&rdquo;
available to providers of shipping and delivery services who seek to offer a &ldquo;branded&rdquo; cryogenic logistics solution
as part of their service offerings, with &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; appearing prominently on the offering
software interface and packaging. This solution can also be private labeled upon meeting certain requirements, such as minimum
required shipping volumes.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Integrated Solution,</I></B>&rdquo;
which is our total outsource solution. It is our most comprehensive solution and involves our management of the entire cryogenic
logistics process for our client, including Cryoport employees at the client&rsquo;s site to manage the client&rsquo;s cryogenic
logistics function in total.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Regenerative
Medicine Point-of-Care Repository Solution,</I></B>&rdquo; designed for allogeneic therapies. In this solution we supply our Cryoport
Express<SUP>&reg;</SUP> Shipper to ship and store cryogenically preserved life science products for up to six days (or longer
periods with supplementary shippers) at a point-of-care site, with the Cryoport Express<SUP>&reg;</SUP> Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Personalized
Medicine and Cell-based Immunotherapy Solution,</I></B>&rdquo; designed for autologous therapies.&nbsp;&nbsp;In this solution
our Cryoport Express<SUP>&reg;</SUP> Shipper serves as an enabling technology for the safe transportation of manufactured autologous
cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition
transport from, (a) the collection of the patient&rsquo;s cells in a hospital setting, to (b) a central processing facility where
they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells
to a point-of-care treatment facility.&nbsp;&nbsp;If required, the Cryoport Express<SUP>&reg;</SUP> Shipper can then serve as
a temporary freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where
the medical provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation
device.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Competitive Advantages</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">With our first-to-market
cryogenic logistics solutions for the life sciences industry, we have established a unique lead over potential competitors. Furthermore,
we are not aware of a company that offers comparable solutions and has the same capabilities Cryoport has as a global provider
of advanced, validated cryogenic logistics solutions. As a solutions company working with our tools in packaging, information technology,
and cryogenic logistics, we address our growing $1.7 billion cryogenic logistics market in innovative and creative ways.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The majority of our competition
utilizes &ldquo;old technologies.&rdquo; In fact, most of our market still uses dry ice and liquid nitrogen. In the case of dry
ice the technology does not deliver cryogenic temperatures and, consequently, this medium allows cells to degrade, sometimes beyond
any utility. When biology was less developed, dry ice was believed to be acceptable and was readily available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Liquid nitrogen, on the
other hand, while effective, is bulky, expensive and has special handling requirements. Both dry ice and liquid nitrogen are classified
&ldquo;hazardous&rdquo; by shipping companies and regulatory authorities. In addition to being ineffective and/or classified as
&ldquo;dangerous goods,&rdquo; they are inefficient when compared to Cryoport solutions. Conversely, Cryoport&rsquo;s solutions
are classified as non-hazardous.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Having been validated
and qualified as a solutions provider for hundreds of life sciences companies and institutions, Cryoport has logged over 20,000
shipments to over 80 countries with hundreds of life sciences materials. We also have experienced that once life sciences companies
start utilizing our advance cryogenic logistics solutions, we experience minimal client attrition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While we look at companies
such as Thermo Fisher Scientific, AmerisourceBergen Corporation and Marken as potential competitors, some of these companies are
also our customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We think our competitive
position is further enhanced by our respective &ldquo;powered by Cryoport&rdquo; partnership agreements with FedEx, DHL and UPS,
who collectively, account for approximately 85% of world&rsquo;s air freight and who, individually, have been expanding their offerings
of cold chain logistics solutions to the life sciences industry. In short, we are the cryogenic solution for each of them, employing
our packaging, our software and our logistics expertise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The challenge for our
seasoned, professional management team is to maintain what we believe to be a four year lead in the marketplace. In other words,
we think it would take a serious potential competitor, at least, four years to build out the competencies that we possess and the
knowledge we have of the marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition to our intellectual
property consisting of three issued U.S. patents, one pending U.S. patent application, and one U.S. provisional patent application
and our lead as the first to market mover, we think our biggest competitive advantage is our speed to market with new solutions
and our sensitivity to anticipate and react to market needs. Our solutions are comprehensive and it is in our &ldquo;DNA&rdquo;
to maintain our market lead by employing the best people in the industry as well as our current and new technologies to maintain
that lead.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Given today&rsquo;s environmental
concerns, we also consider the fact that we are &ldquo;green&rdquo; to be a competitive advantage. Our packaging materials are
recyclable and the key components are reusable. The fact that the inner and outer shells of our shippers are made of aircraft-grade
aluminum makes these components recyclable as well. We take our responsibility toward the environment seriously.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Strategic Logistics
Alliances</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have sought to establish
strategic alliances as a method of marketing our solutions to the life sciences industry. We have focused our efforts on leading
companies in the logistics services industry as well as participants in the life sciences industry. In connection with our alliances
with providers of shipping services, we refer to their offerings as &ldquo;<I>powered by Cryoport</I><SUP>SM</SUP>&rdquo; to reflect
our solutions being integrated into our alliance partner&rsquo;s services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>FedEx.</B> In January
2013, we entered into a master agreement with Federal Express Corporation (&ldquo;FedEx&rdquo;) (the &ldquo;FedEx Agreement&rdquo;)
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal<SUP>TM</SUP>
for the management of shipments made by FedEx customers. Under our FedEx Agreement, we provide frozen shipping logistics services
through the combination of our purpose-built proprietary technologies and turnkey management processes. FedEx markets and sells
Cryoport&rsquo;s services for frozen temperature-controlled cold chain transportation as its FedEx<SUP>&reg;</SUP> Deep Frozen
Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year 2013, the Company worked closely with FedEx
to further align its sales efforts and accelerate penetration within FedEx&rsquo;s life sciences customer base through improved
processes, sales incentives, joint customer calls and more frequent communication at the sales and executive level. In addition,
FedEx has developed a FedEx branded version of the Cryoportal<SUP>TM</SUP> software platform, which is &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo;
for use by its customers, giving them access to the full capabilities of our cloud-based logistics management software platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>DHL.</B> In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding (&ldquo;DHL&rdquo;). DHL has now enhanced its
cold chain logistics offerings to its life sciences and healthcare customers with Cryoport&rsquo;s validated cryogenic solutions.
DHL added 15 additional certified Life Sciences stations in the second quarter of 2014 bringing its Thermonet network to 60 stations
in operation. This expanded network offers Cryoport&rsquo;s cryogenic solutions under the DHL brands as &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo;.
In addition, DHL&rsquo;s customers have direct access to our cloud-based order entry and tracking portal to order Cryoport Express<SUP>&reg;</SUP>
Solutions and receive preferred DHL shipping rates and discounts. Our proprietary logistics management operating platform, the
Cryoportal<SUP>TM</SUP>, is integrated with DHL&rsquo;s tracking and billing systems to provide DHL life sciences and healthcare
customers with a seamless way of accessing critical information regarding shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>UPS.</B> In October
2014, we added United Parcel Services, Inc. (&ldquo;UPS&rdquo;) as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. Over the course of rolling out our new relationship with UPS, UPS customers
will have direct access to our cloud-based order entry and tracking portal to order Cryoport Express<SUP>&reg;</SUP> Solutions
and gain access to UPS&rsquo;s broad array of domestic and international shipping and logistics solutions at competitive prices.
Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>, is integrated with UPS&rsquo;s tracking and
billing systems to provide UPS life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">These agreements with
the three largest integrators in the world, controlling more than 85% of the world&rsquo;s air shipments, represent a significant
validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport&rsquo;s Positioning
in the Life Sciences Industry</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Life sciences technologies
are expected to have a significant impact on global society over the next 25 years. In the United States alone, the life sciences
industry is made up of 6,000 identifiable establishments. However, the industry is growing globally in a way where research and
manufacturing pipelines span across the globe, which increases the need to mitigate logistics risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The total cold chain logistics
market has historically grown 70% faster per annum than the total logistics market. For 2011, global cold chain logistics transportation
costs were reported to be $7.2 billion; about $1.5 billion within the cryogenic range of requirements. By 2017, transportation
cost alone, for global life sciences cold chain logistics, is forecasted to grow to $9.3 billion, a 41% increase, and twice the
growth of the overall market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition, with the
recent advancements in the development of biologics and cell-based therapies, scientists, intermediaries, and manufacturers require
the means for cryogenically transporting their work. Temperatures must be maintained below the &ldquo;glass point&rdquo; (generally,
minus 136&ordm;C) while shipping these therapies to ensure that the shipped specimens are not subject to degradation that could
impact its characteristics and efficacy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While we estimate that
our solutions currently offer comprehensive and technology-based monitoring and tracking for a potential of six to seven million
deep frozen shipments globally on an annual basis, we also believe that with investment in our services, adaptations of our solutions
can be applied to a large portion of an additional fifty-five to sixty million annual shipments requiring ambient (between 20&deg;
and 25&deg;C), chilled (between 2&deg; and 8&deg;C) or frozen (minus 10&deg;C or less) temperatures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt">Cryoport&rsquo;s clients
include companies and institutions that require reliable cryogenic logistics solutions such as therapy developers for personalized
medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic laboratories, contract manufacturers, cord
blood repositories, vaccine manufacturers, animal husbandry related companies, and in-vitro fertilization clinics.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Life Sciences Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Zoetis.</B> In December&nbsp;2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal<SUP>TM</SUP> to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis&rsquo; total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport&rsquo;s scope to manage all logistics
of Zoetis&rsquo; key frozen poultry vaccine to all Zoetis&rsquo; international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport&rsquo;s role to include the logistics management
for a second poultry vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Liventa Biosciences.</B>
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express<SUP>&reg;</SUP> Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport&rsquo;s proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa&rsquo;s distribution capability to orthopedic care providers.
The implementation of Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
The agreement has an initial three-year term and may be renewed for consecutive three-year terms, unless earlier terminated by
either party. Liventa also agreed to certain performance criteria and the issuance of 150,000 shares of its common stock to Cryoport
in exchange for the exclusive right to offer, market and promote Cryoport Express<SUP>&reg;</SUP> Solutions for cellular-based
therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Corporate History and
Structure</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company was originally
incorporated under the name G.T.5-Limited (&ldquo;GT5&rdquo;) on May 25, 1990 as a Nevada Corporation. Upon completion of a Share
Exchange Agreement, on March 15, 2005 the Company changed its name to Cryoport, Inc. and acquired all of the issued and outstanding
shares of Cryoport Systems, Inc. Cryoport Systems, Inc. remains the operating company under Cryoport, Inc. At that time Cryoport
Systems, Inc. was focused on developing the Cryoport Express<SUP>&reg;</SUP> Shipper. Over time the Company has transitioned from
being a development company to providing global cold chain logistics solutions to the biotechnology and life sciences industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since 2011, we have validated,
perfected and expanded the features of the Cryoport Express<SUP>&reg;</SUP> logistics solutions and have now managed shipments
of the Cryoport Express<SUP>&reg; </SUP>Shippers through its Cryoportal<SUP>TM</SUP> into and out of more than 80 countries with
more than 20,000 shipments, handling a vast array of different biological products and specimens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During fiscal year 2012,
the Company completed the external validation of its Cryoport Express Standard Shipper to ISTA 7E standards and introduced the
Cryoport Express<SUP>&reg;</SUP> High Volume Shipper in response to customer demand. The Company also set up its European distribution
depot in Holland to better serve its customer base and support sales efforts in Europe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During fiscal year 2013,
the Company elected Jerrell Shelton as President and CEO, realigned its sales team, and introduced a solutions sales and operating
strategy. In addition, and as part of its global expansion plans, the Company set up its Asian distribution depot in Singapore.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since the beginning of
fiscal year 2014, the Company&rsquo;s Board of Directors (&ldquo;Board&rdquo;) has added certain members to better align the experience
and competencies of the directors with the Company&rsquo;s strategic direction. In March 2013, Richard G. Rathmann, a fund manager,
investor, and advisor to life science companies over the past 20&nbsp;years, was appointed to the Board.&nbsp; In September 2013,
Mr.&nbsp;Rathmann was elected Chairman of the Board. Also in September 2013, Mr.&nbsp;Edward Zecchini, an executive with more than
thirty years of experience in the healthcare and information technology industries was appointed to the Board. In June 2014, Dr.
Ramkumar Mandalam was appointed to the Board. Dr. Mandalam has more than twenty years of experience in the development of biologics
and is currently the President and Chief Executive Officer of Cellerant Therapeutics, Inc., a clinical-stage biotechnology company.
Most recently, in January 2015, Richard Berman was appointed to the Board. Mr.&nbsp;Berman&rsquo;s business career consists of
more than 35 years of venture capital, management and merger and acquisitions experience. The Company&rsquo;s remaining Board member,
Jerrell Shelton, the President and Chief Executive Officer of Cryoport, joined the Board in October 2012. The Company&rsquo;s five
person Board has four independent Board members, as determined by NASDAQ Rule 5605(a)(2) and the related rules of the Securities
and Exchange Commission.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Recent Developments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Reverse Stock Split.
</B>The Company intends to effect a reverse stock split in order to increase the stock price to a level that will enable it to
apply for listing on the NASDAQ Capital Market or other national stock exchange. No fractional shares of our common stock will
be issued as a result of the reverse stock split. In the event the proposed reverse stock split leaves a stockholder with a fraction
of a share, the number of shares due to the stockholder will be rounded up to the nearest whole share. The reverse stock split
will not be effective unless and until the board files an amendment to our certificate of incorporation. It is our intent to effect
the reverse stock split prior to the closing of this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Listing on the NASDAQ
Capital Markets. </B>In connection with the filing of the registration statement of which this prospectus forms a part, we applied
for listing of our common stock and warrants on the NASDAQ Capital Market. After the consummation of this offering, we believe
that we will satisfy the listing requirements and expect that our common stock and warrants will be listed on the NASDAQ Capital
Market.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Service Marks, Trademarks
and Trade Names</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We own, have rights to,
or have applied for the service marks and trade names that we use in conjunction with our business, including Cryoport (both alone
and with a design logo) and Cryoport Express<SUP>&reg;</SUP> (both alone and with a design logo). All other trademarks and trade
names appearing in this prospectus are the property of their respective holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">***</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our principal executive offices
are located on 20382 Barents Sea Circle, Lake Forest, California 92630. The telephone number of our principal executive offices
is 1.949.470.2300, and our main corporate website is www.cryoport.com. The information on, or that can be accessed through, our
website (www.cryoport.com) is not part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">THE OFFERING</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; padding-left: 0.2in; text-indent: -0.2in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Securities offered </FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 58%">3,409,091 shares of common stock and warrants, each consisting of one share of common stock and a warrant
to purchase one share of common stock. (1)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.2in; text-indent: -0.2in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.2in">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: -0.2in">Common stock outstanding prior to the</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 17.5pt; text-indent: -17.5pt">offering</P></TD>
    <TD>&nbsp;</TD>
    <TD>7,538,364 shares of common stock (2)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Common stock to be outstanding after the offering</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>12,666,600 shares of common stock(1) (2) (3) (4) (5)(6)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 18.4pt; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrants to be outstanding immediately prior to offering</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>8,022,740 (7)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 18.4pt; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrants to be outstanding immediately after this offering</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>13,287,340 (7) (8) (9) (10)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 18.4pt; text-indent: -0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Use of proceeds</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">We expect the net proceeds to us from this offering will be approximately $13,600,000 after deducting the underwriting discount and estimated offering expenses (assuming the representative of the underwriters does not exercise its option to cover over-allotments). We intend to use those net proceeds primarily for working capital purposes to support our anticipated operations and development plans; provided that as required by the terms of certain secured promissory notes, twenty five percent (25%) of such net proceeds, up to $741,377 will be used to make required payments on such notes.&nbsp;&nbsp;See &ldquo;Use of Proceeds&rdquo; for more information. &nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 18.4pt; text-indent: -0.25in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Over-allotment option</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">We have granted the underwriters an option for a period of 45 days to purchase, on the same terms and conditions set forth above, up to an additional 511,364 shares of common stock and warrants, consisting of 511,364 shares of our common stock and warrants to purchase 511,364 shares of our common stock, to cover over-allotments. &nbsp;&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Description of&nbsp;&nbsp;warrants</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Each purchaser will receive a warrant to purchase one share of our common stock for each share of common stock it purchases in this offering. The warrants are exercisable at an exercise price of $4.84 per share of common stock. The warrants are exercisable starting on _______________, and expire on _______________, 2019. See &ldquo;Description of the Warrants&rdquo; below for more information.&nbsp;&nbsp; &nbsp;</FONT></TD></TR>
</TABLE>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 40%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">OTCQB symbol</font></td>
    <TD STYLE="width: 2%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 58%; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Our common stock is currently traded on the OTCQB under the symbol &ldquo;CYRX.&rdquo;</b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.25in; text-align: left; text-indent: -0.25in"><font style="font-size: 10pt">Proposed NASDAQ Capital Market symbol for our Common Stock </font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>&ldquo;*&rdquo; </b></font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Risk factors</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Investing in our securities involves a high degree of risk. You should carefully read and consider the information set forth under the heading &ldquo;Risk Factors&rdquo; beginning on page 10 of this prospectus and all other information in this prospectus before investing in our securities.</b></font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 8%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 92%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Based on an assumed offering price of $4.40 per share of common stock and a warrant to purchase one share of common stock, the last reported sale price of our common stock on March 12, 2015 (after giving effect to the anticipated 8-to-1 reverse stock split).&nbsp;&nbsp;The actual number of shares of common stock and warrants we will offer will be determined based on the actual public offering price. </font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 8%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(2)</font></td>
    <TD STYLE="width: 92%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Based upon the total number
        of issued and outstanding shares as of March 12, 2015, but does not include (in each case adjusted for the anticipated 8-to-1 reverse
        stock split), as of that date:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&bull; &nbsp;&nbsp;8,022,740
        shares of common stock reserved for issuance upon the exercise of outstanding warrants with a weighted average exercise price of
        $4.80 per share;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&bull; &nbsp;&nbsp;2,621,716
        shares of common stock reserved for issuance upon the exercise of outstanding stock options with a weighted average exercise price
        of $3.01 per share; and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -31.5pt">&bull; &nbsp;&nbsp;343,095
        shares of common stock available for future grant under our 2009 Stock Incentive Plan and the 2011 Stock Incentive Plan.</P></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(3)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Includes 1,719,145 shares of common stock that will be issued upon the mandatory conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon the closing of this offering.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(4)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Does not include 3,409,091 shares of common stock issuable upon the exercise of the warrants to be issued in connection with this offering.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(5)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Does not include 1,022,728 shares of common stock (including the shares of common stock underlying the warrants included as part of the shares of common stock and warrants) that comprise the shares of common stock and warrants that may be purchased by the underwriters&rsquo; representative upon the exercise of its 45-day option to cover over-allotments, if any, and 136,364 shares of common stock that may be issued to Aegis Capital Corp. upon exercise of the warrant we will issue to them (representing 4% of the shares of common stock included in the shares of common stock and warrants sold by us in this offering, excluding the over-allotment option). </font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(6)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Does not include up to 273,065 shares of common stock and 273,065 shares of common stock issuable upon the exercise of warrants that may be issued upon the voluntary conversion of certain promissory notes as a result of this offering.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(7)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Includes outstanding warrants to purchase up to 8,022,740 shares of our common stock with a weighted average exercise price of $4.80 per share.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(8)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Includes 1,719,145 shares of common stock issuable upon the exercise of warrants that will be issued upon the mandatory conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon the closing of this offering.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(9)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Includes the warrant we will issue to Aegis Capital Corp. to purchase 136,364 shares of common stock (representing 4% of the shares of common stock included in the shares of common stock and warrants sold by us in this offering, excluding the over-allotment option), but does not include warrants to purchase 511,364 shares of common stock that may be purchased by the underwriters&rsquo; representative.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(10) </font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Does not include up to 273,065 warrants that may be issued upon the voluntary conversion of certain promissory notes as a result of this offering.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Except as otherwise indicated,
all information in the prospectus assumes no exercise by the underwriters of their over-allotment option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">SUMMARY FINANCIAL INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In the table below we
provide you with historical consolidated financial data for the nine months ended December 31, 2014 and 2013 and the fiscal years
ended March 31, 2014 and 2013, derived from our audited and unaudited consolidated financial statements included elsewhere in this
prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period. When you
read this historical selected financial data, it is important that you read along with it the appropriate historical consolidated
financial statements and related notes and &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results
of Operations&rdquo; included elsewhere in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Nine Months Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Years Ended</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Consolidated Statements of Operations Data:</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center">In thousands, except per share data</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,737</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,825</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,660</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,101</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,938</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,531</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,223</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,588</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Gross margin (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">294</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(487</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,431</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,768</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,106</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,412</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">268</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">330</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">409</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">425</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,900</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,804</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,078</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,324</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,714</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,714</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,185</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(627</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(784</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Change in fair value of derivatives</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Other expense, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,088</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,124</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,563</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,380</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,090</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,124</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,565</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,382</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Preferred stock beneficial conversion charge</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,961</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Undeclared cumulative preferred dividends</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(195</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net loss attributable to common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(8,246</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(18,124</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(19,565</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,382</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net loss per share attributable to common stockholders&nbsp;&mdash; basic and diluted (after giving effect to 8-to-1 reverse stock split)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1.10</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1.35</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Consolidated Balance Sheets Data:</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center">In thousands</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">774</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">220</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">370</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">563</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Working capital (deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,613</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(785</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,903</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,539</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,867</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,710</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,756</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Convertible notes and accrued interest, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">390</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,622</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,304</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Long term obligations, less current portion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,278</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,322</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Total stockholders&rsquo; equity&#9;(deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,118</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,400</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,304</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,063</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_002"></A>RISK FACTORS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>An investment in
shares of our common stock and warrants involves a high degree of risk. Before making an investment decision, you should carefully
consider all of the risks described in this prospectus. If any of the risks discussed in this prospectus actually occur, our business,
financial condition, and results of operations could be materially and adversely affected. If this were to happen, the price of
our shares of common stock and warrants could decline significantly and you may lose all or a part of your investment. Our forward-looking
statements in this prospectus are subject to the following risks and uncertainties. Our actual results could differ materially
from those anticipated by our forward-looking statements as a result of the risk factors below. See &ldquo;Forward-Looking Statements.&rdquo;</I></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Risks Related to Our
Financial Condition</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We have incurred
significant losses to date and may continue to incur losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have incurred net losses
since we commenced operations. For the nine month period ended December 31, 2014, our operating loss was $3,900,000. We have incurred
net losses in each fiscal year. The following table represents net losses incurred for each of our last two fiscal years:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%; border-collapse: collapse; margin-left: 0.75in">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Net Loss</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Fiscal Year Ended March&nbsp;31, 2014</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 12%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">19,565,400</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Fiscal Year Ended March&nbsp;31, 2013</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6,382,400</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our fiscal year ended
March&nbsp;31, 2014 net loss of $19,565,400 included a one-time non-cash loss of $13,713,800 as a result of an induced debt conversion
expense as described in Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations under the &ldquo;Results
of Operations for Fiscal 2014 Compared to Fiscal 2013&rdquo; section. As of December 31, 2014, we had an accumulated deficit of
$93.9 million. These losses have had, and likely will continue to have, an adverse effect on our working capital, assets, and equity.
In order to achieve and sustain such revenue growth in the future, we must significantly expand our market presence and revenues
from existing and new customers. We may continue to incur losses in the future and may never generate revenues sufficient to become
profitable or to sustain profitability. Continuing losses may impair our ability to raise the additional capital required to continue
and expand our operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The repayment
of certain promissory notes is secured by a security interest in all of our assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company has issued
2014 Series Secured Promissory Notes in the aggregate original principal amount of $915,000 (the &ldquo;7% Bridge Notes&rdquo;),
of which $741,377 was outstanding as of March 12, 2015. The notes are secured by all tangible assets of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">All principal and interest
under the Notes will be due on July 1, 2015; however, the Company may elect to extend the maturity date of the Notes to January
1, 2016 by providing written notice to the Investors and a warrant to purchase a number of shares of the Company&rsquo;s common
stock equal to (a) the then outstanding principal balance of the Note, divided by $0.50 and (b) multiplied by 125%. The Company
may prepay the Notes at any time without penalty and shall prepay the Notes in an amount equal to 25% of the net cash proceeds
received by the Company during each month from the issuance of either debt or equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If we default in the repayment
of the notes and/or any of the terms and conditions thereof the holders of such notes may enforce their security interest over
our assets which secure the repayment of such note, and we could be forced to curtail or abandon our current business plans and
operations. If that were to happen, the Company&rsquo;s securities could have no value.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our auditors
have expressed doubt about our ability to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Report of Independent
Registered Public Accounting Firm to our March&nbsp;31, 2014 consolidated financial statements includes an explanatory paragraph
stating that the recurring losses and negative cash flows from operations since inception and our cash and cash equivalents balance
at March&nbsp;31, 2014 raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to establish to the satisfaction
of our independent registered public accounting firm that the net proceeds from this offering will be sufficient, based on our
projected cash flows, to allow for the removal of this &ldquo;going concern&rdquo; qualification, we will not be able to obtain
approval of our NASDAQ listing application.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we are unable
to obtain additional funding, we may have to reduce or discontinue our business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of December 31, 2014,
we had cash and cash equivalents of $773,900. Therefore, our ability to continue and expand our operations is highly dependent
on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to fund future operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We anticipate, based on
currently proposed plans and assumptions relating to our ability to market and sell our products, that our cash on hand and the
proceeds from this offering, together with projected cash flows, will satisfy our operational and capital requirements for the
next 18 to 24 months. There are a number of uncertainties associated with our financial projections that could reduce or delay
our future projected revenues and cash-inflows, including, but not limited to, our ability to increase our customer base and revenues.
If our projected revenues and cash-inflows are reduced or delayed, we may not have sufficient capital to operate through the next
18 to 24 months unless we raise more capital. Additionally, if we are unable to realize satisfactory revenue in the near future,
we will be required to seek additional financing to continue our operations beyond that period. We will also require additional
financing to expand into other markets and further develop and market our products. Except for the shares of common stock and warrants
to be offered in this offering, we have no current arrangements with respect to any additional financing. Consequently, there can
be no assurance that any additional financing on commercially reasonable terms, or at all, will be available when needed. The inability
to obtain additional capital may reduce our ability to continue to conduct business operations. Any additional equity financing
may involve substantial dilution to our then existing stockholders. The uncertainties surrounding our future cash inflows have
raised substantial doubt regarding our ability to continue as a going concern.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Risks Related to Our
Business</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our agreements
with global providers of shipping services may not result in a significant increase in our revenues or cash flow, soon or in the
future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe that establishing
strategic alliances with global providers (integrators) of logistics and of shipping services, such as our agreements with FedEx,
DHL, and UPS can drive growth in our revenues, but there is no certainty to this view. We are seeking to establish similar arrangements
with other providers of international shipping services. We anticipate all such alliances will enable us to provide seamless, end-to-end
shipping solutions to customers of our respective alliance partners and allow us to leverage the established relationships with
those customers, but there is no guarantee this will happen.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In January 2013, we entered
into an agreement with FedEx, renewing FedEx&rsquo;s right to, on a non-exclusive basis, promote, market and sell transportation
of our shippers and our related value-added goods and services and providing FedEx with a non-exclusive license and right to use
a customized version of our Cryoportal&trade; software platform for the management of shipments made by FedEx customers. In June
2014, we added DHL as our second major distribution partner, whereby DHL can offer our validated and comprehensive cryogenic solutions
to its life sciences and healthcare customers on a global basis. In October 2014, we entered into an agreement with UPS related
to our participation in UPS&rsquo;s efforts to expand its provision of cryogenic shipping services to the life sciences industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Because our agreements
with FedEx, DHL, and UPS do not contain any requirement that they use a minimum level of our services, there can be no assurance
of any significant increase in our revenues or cash flows as a result of these strategic alliances.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our agreements
with providers of vaccines and stem cell-based therapies may not result in a significant increase in our revenues or cash flow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe that establishing
strategic relationships with manufacturers and distributors of treatments for animals and humans, such as our agreements with Zoetis,
Inc. and Liventa Bioscience, Inc., can drive growth in our revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In December 2012, we entered
an agreement with what became Zoetis, Inc. (in January 2013, Pfizer spun off its animal health business into Zoetis, Inc., a public
company) pursuant to which we were engaged to manage frozen shipments of a key poultry vaccine from Zoetis&rsquo; production site
in the United States. Over time, Zoetis has further expanded our role in providing them assistance in managing their cryogenic
distribution of their vaccines and has become our largest customer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In February 2014, we entered
into an agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;) to act as its exclusive provider of cryogenic logistics
of stem cell based therapies for orthopedic applications based on meeting minimum performance requirements over specified time
periods. Liventa intends to distribute its own line of therapies and to act as a distributor of other therapies to orthopedic health
care providers that require controlled cryogenic temperatures. There is no assurance if or when Liventa will begin significant
use of our services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While we anticipate growth
in shipments by Zoetis under our management and that Liventa will be successful in its efforts to distribute cell based biologic
materials to the orthopedic market, there can be no assurance of any significant increase in our revenues or cash flows as a result
of these important alliances.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We will have
difficulty increasing our revenues if we experience delays, difficulties or unanticipated costs in establishing the sales, distribution
and marketing capabilities necessary to successfully commercialize our solutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We plan to improve our
sales, distribution, and marketing capabilities in the Americas, Europe, and Asia. It will be expensive and time-consuming for
us to develop our global marketing and sales network and thus we intend to rely on our strategic alliances with FedEx, DHL, and
UPS. We further intend to seek to enter into additional strategic alliances with international providers of shipping services to
incorporate use of our solutions in their service offerings. We may not be able to provide adequate incentive to our sales force
or to establish and maintain favorable distribution and marketing collaborations with others to promote our solutions. In addition,
any third party with whom we have established a marketing and distribution relationship may not devote sufficient time to the marketing
and sales of our solutions, thereby exposing us to potential expenses in exiting such distribution agreements. We, and any of our
alliance partners, must also market our services in compliance with federal, state, local and international laws relating to the
provision of incentives and inducements. Violation of these laws can result in substantial penalties. Therefore, if we are unable
to successfully motivate and expand our marketing and sales force and further develop our sales and marketing capabilities, or
if our alliance partners fail to promote our solutions, we will have difficulty increasing our revenues and the revenue may not
off-set the additional expense of expansion.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our ability to
grow and compete in our industry will be hampered if we are unable to retain the continued service of our key professionals or
to identify, hire and retain additional qualified professionals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">A critical factor to our
business is our ability to attract and retain qualified professionals including key employees and consultants. We are continually
at risk of losing current professionals or being unable to hire additional professionals as needed. If we are unable to attract
new qualified employees, our ability to grow will be adversely affected. If we are unable to retain current employees or strategic
consultants, our financial condition and ability to maintain operations may be adversely affected.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Sustainable future
revenue growth is dependent on new solutions and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our future revenue streams
depend to a large degree on our ability to bring new solutions and services to an evolving market on a timely basis. We must continue
to make investments in research and development in order to continue to develop new solutions and services, enhance existing solutions
and services, and achieve market acceptance of such solutions and services. We may incur problems in introducing new solutions
and services.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The adoption
cycle of our target customers tends to be very lengthy, which continues to adversely affect our ability to increase revenues quickly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We offer our solutions
primarily to companies in the life sciences industry. These companies operate within a heavily regulated environment and as such,
changing vendors and distribution practices typically requires a number of steps, which may include the audit of our facilities,
review of our procedures, qualifying us as a vendor, and performing test shipments. This process can take several months or longer
to complete, involving multiple levels of approval, prior to a company fully adopting our Cryoport Express<SUP>&reg;</SUP> Solutions.
Moreover, the logistics management of many companies is decentralized, adding to the time needed to effect adaptation of our solutions.
In addition, any such adoption may be on a gradual basis, such that the customer progressively ramps up use of our Cryoport Express<SUP>&reg;
</SUP>Solutions following adoption. The slow adoption process continues to adversely affect our ability to increase revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The loss of key
members of our executive management team could adversely affect our business.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">Our
success in implementing our business strategy depends largely on the skills, experience and performance of key members of our executive
management team and others in key management positions. The collective efforts of each of these persons working as a team will
be critical to us as we continue to develop our technologies, tests and research and development and sales programs. As a result
of the difficulty in locating qualified new management, the loss or incapacity of existing members of our executive management
team could adversely affect our operations. If we were to lose one or more of these key employees, we could experience difficulties
in finding qualified successors, competing effectively, developing our technologies and implementing our business strategy. We
do not maintain &ldquo;key person&rdquo; insurance on any of our employees.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our solutions
and services may contain errors or defects, which could result in damage to our reputation, lost revenues, diverted development
resources and increased service costs and litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our solutions and services
must meet stringent requirements and we must develop our services and solutions quickly to keep pace with the rapidly changing
market. Solutions as sophisticated as ours could contain undetected errors or defects, especially when first introduced or when
new equipment or versions of our software are released. If our solutions are not free from errors or defects, we may incur an injury
to our reputation, lost revenues, diverted development resources, increased customer service and support costs, and litigation.
The costs incurred in correcting any product errors or defects may be substantial and could adversely affect our business, results
of operations and financial condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we were sued
for product liability, we could face substantial liabilities that exceed our resources.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">The
marketing, sale and use of our products could lead to the filing of product liability claims were someone to allege that our products
failed to perform as designed. A product liability claim could result in substantial damages and be costly and time-consuming for
us to defend.</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">Although
we believe that our existing insurance is adequate, our insurers may fail to defend us or our insurance may not fully protect us
from the financial impact of defending against product liability claims. Any product liability claim brought against us, with or
without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future. Additionally, any
product liability lawsuit could damage our reputation, or cause current clinical partners and collaborators to terminate existing
agreements and potential clinical partners to seek other partners, cause customers to terminate their relationship with us and
potential customers to seek alternative solutions, any of which could impact our results of operations.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we experience
manufacturing delays, interruptions in production, or delays in procurement of shippers manufactured by third parties, then we
may experience customer dissatisfaction and our reputation could suffer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If we fail to produce
enough shippers at our own manufacturing facility or at a third party manufacturing facility, or if we fail to complete our shipper
recycling processes as planned, we may be unable to deliver shippers to our customers on a timely basis, which could lead to customer
dissatisfaction and could harm our reputation and ability to compete. We currently acquire various component parts for our shippers
from various independent manufacturers in the United States. We would likely experience significant delays or cessation in producing
our shippers if a labor strike, natural disaster or other supply disruption were to occur at any of our main suppliers. If we are
unable to procure a component from one of our manufacturers, we may be required to enter into arrangements with one or more alternative
manufacturing companies, which may cause delays in producing our shippers. In addition, because we depend (in part) on third party
manufacturers, our profit margins may be lower, which will make it more difficult for us to achieve profitability. To date, we
have not experienced any material delay that has adversely impacted our operations. As our business develops, it becomes more likely
that such problems could arise.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We expect to
base our equipment and inventory purchasing decisions on our forecasts of customers&rsquo; demand, and if our forecasts are inaccurate,
our operating results could be materially harmed.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">As
our customer base increases, we expect to need to purchase additional equipment and inventory. Our forecasts will be based on multiple
assumptions, each of which may cause our estimates to be inaccurate, affecting our ability to provide products to our customers.
When demand for our products increases significantly, we may not be able to meet demand on a timely basis, and we may need to expend
a significant amount of time working with our customers to allocate limited supply and maintain positive customer relations, or
we may incur additional costs in order to rush the manufacture and delivery of additional products. If we underestimate customers&rsquo;
demand, we may forego revenue opportunities, lose market share and damage our customer relationships. Conversely, if we overestimate
customer demand, we may purchase more equipment and inventory than we are able to use or sell at any given time or at all. As a
result of our failure properly to estimate demand for our products, we could have excess or obsolete equipment and/or inventory,
resulting in a decline in the value of our equipment and/or inventory, which would increase our costs of revenues and reduce our
liquidity. Our failure to accurately manage our equipment purchases and inventory relative to demand would adversely affect our
operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we experience
delays or interruption in shipping due to factors outside of our control, such disruption could lead to customer dissatisfaction
and harm our reputation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We rely on third party
shipment and carrier services to transport our shippers containing biological material. These third party operations could be subject
to natural disasters, adverse weather conditions, other business disruptions, and carrier error, which could cause delays in the
delivery of our shippers, which in turn could cause serious harm to the biological material being shipped. As a result, any prolonged
delay in shipment, whether due to technical difficulties, power failures, break-ins, destruction or damage to carrier facilities
as a result of a natural disaster, fire, or any other reason, could result in damage to the contents of the shipper. If we are
unable to cause the delivery of our shippers in a timely matter and without damage, this could also harm our operating results
and our reputation, even if we are not at fault.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our solutions
and services may expose us to liability in excess of our current insurance coverage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our solutions and services
involve significant risks of liability, which may substantially exceed the revenues we derive from them. We cannot predict the
magnitude of these potential liabilities. We currently maintain general liability insurance, with coverage in the amount of $1
million per occurrence, subject to a $2 million annual limitation, and product liability insurance with a $1 million annual coverage
limitation. Claims may be made against us that exceed these limits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our liability policy is
an &ldquo;occurrence&rdquo; based policy. Thus, our policy was complete when we purchased it and following cancellation of the
policy, it will continue to provide coverage for future claims based on conduct that took place during the policy term. Our insurance
coverage, however, may not protect us against all liability because our policies typically have various exceptions to the claims
covered and also require us to assume some costs of the claim, even though a portion of the claim may be covered. In addition,
if we expand into new markets, we may not be aware of the need for, or be able to obtain insurance coverage for such activities
or, if insurance is obtained, the dollar amount of any liabilities incurred could exceed our insurance coverage. A partially or
completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on our business, financial
condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>If we use biological
and hazardous materials in a manner that causes injury, we could be liable for damages. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our customers may ship
potentially harmful biological materials in our dewars. We cannot eliminate the risk of accidental contamination or injury to employees
or third parties from the use, storage, handling or disposal of these materials. In the event of contamination or injury, we could
be held liable for any resulting damages, and any liability could exceed our resources or any applicable insurance coverage we
may have. Additionally, we are subject to, on an ongoing basis, federal, state and local laws and regulations governing the use,
storage, handling and disposal of these materials and specified waste products. In the event of an accident, we could be held liable
for damages.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we cannot
compete effectively, we will lose business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our services and solutions
are positioned to be competitive in the life sciences cold-chain logistics market. While there are technological and marketing
barriers to entry, we cannot guarantee that the barriers we are capable of producing will be sufficient to defend the market share
we wish to gain against current and future competitors. Our principal competitive considerations in our market include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%; text-align: left">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">financial resources to allocate to proper marketing and an appropriate sales effort,</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 4.4pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol"></font><font style="font-size: 10pt">acceptance of our solutions model,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">acceptance of our solutions including per use fee structures and other charges for services,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">keeping up technologically with ongoing development of enhanced features and benefits,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">reductions in the delivery costs of competitors&rsquo; solutions,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">the ability to develop and maintain and expand strategic alliances,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">establishing our brand name,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">our ability to deliver our solutions to our customers when requested,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">our timing of introductions of new solutions and services, and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">financial resources to support working capital needs and required capital investments in infrastructure.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Current and prospective
competitors have substantially greater resources, more customers, longer operating histories, greater name recognition and more
established relationships in the industry. As a result, these competitors may be able to develop and expand their networks and
product offerings more quickly, devote greater resources to the marketing and sale of their solutions and adopt more aggressive
pricing policies. In addition, these competitors have entered and will likely continue to enter into business relationships to
provide additional solutions competitive to those we provide or plan to provide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>We may acquire other
businesses, products or technologies in order to remain competitive in our market and our business could be adversely affected
as a result of any of these future acquisitions.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We may make acquisitions
of complementary businesses, products or technologies. If we identify any appropriate acquisition candidates, we may not be successful
in negotiating acceptable terms of the acquisition, financing the acquisition, or integrating the acquired business, products or
technologies into our existing business and operations. Further, completing an acquisition and integrating an acquired business
will significantly divert management time and resources. The diversion of management attention and any difficulties encountered
in the transition and integration process could harm our business. If we consummate any significant acquisitions using stock or
other securities as consideration, our shareholders' equity could be significantly diluted. If we make any significant acquisitions
using cash consideration, we may be required to use a substantial portion of our available cash. Acquisition financing may not
be available on favorable terms, if at all. In addition, we may be required to amortize significant amounts of other intangible
assets in connection with future acquisitions, which would harm our operating results and financial condition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we successfully
develop products and/or services, but those products and/or services do not achieve and maintain market acceptance, our business
will not be profitable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The degree of acceptance
of our Cryoport Express <SUP>&reg;</SUP> Solutions or any future products or services by our current target markets, and any other
markets to which we attempt to sell our products and services, and our profitability and growth will depend on a number of factors
including, among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 9%; padding-left: 0; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">our shippers&rsquo; ability to perform and preserve the integrity of the materials shipped,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">relative convenience and ease of use of our shipper and/or Cryoportal<sup>TM</sup>,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">availability of alternative products,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">pricing and cost effectiveness,</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">effectiveness of our or our collaborators&rsquo; sales and marketing strategy, and</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 9%">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in; width: 1%"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 90%; padding-left: 4.4pt; text-align: left; text-indent: 0in"><font style="font-size: 10pt">the adoption cycles of our targeted customers.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 45pt; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If any products or services
we may develop do not achieve market acceptance, then we may not generate sufficient revenue to achieve or maintain profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition, even if our
products and services achieve market acceptance, we may not be able to maintain that market acceptance over time if new products
or services are introduced that are more favorably received than our products and services, are more cost effective, or render
our products obsolete. Although we are not aware of any other treatments or methods currently being developed that would directly
compete with the methods we employ, there can be no assurance that future developments in technology will not make our technology
non-competitive or obsolete, or significantly reduce our operating margins or the demand for our offerings, or otherwise negatively
impact our ability to be profitable.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We may not be
able to compete with our competitors in the industry because many of them have greater resources than we do.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We expect to continue
to experience significant and increasing levels of competition in the future. In addition, there may be other companies which are
currently developing competitive products and services or which may in the future develop technologies and products that are comparable,
superior or less costly than our own. For example, some cryogenic equipment manufacturers with greater resources currently have
solutions for storing and transporting cryogenic liquid and gases and may develop storage solutions that compete with our products.
Additionally, some specialty couriers with greater resources currently provide dry ice transportation and may develop other products
in the future, both of which compete with our products. A competitor that has greater resources than us may be able to bring its
product to market faster than we can and offer its product at a lower price than us to establish market share. We may not be able
to successfully compete with a competitor that has greater resources and such competition may adversely affect our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><U>Intellectual Property
Risks Associated with Our Business</U></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our success depends,
in part, on our ability to obtain patent protection for our solutions and business model, preserve our trade secrets, and operate
without infringing the proprietary rights of others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our policy is to seek
to protect our proprietary position by, among other methods, filing United States patent applications related to our technology,
inventions and improvements that are important to the development of our business. We have three issued U.S. patents, one pending
U.S. patent application, and one recently filed U.S. provisional patent application, all relating to various aspects of our solutions
and services. Our patents or patent application may be challenged, invalidated or circumvented in the future or the rights granted
may not provide a competitive advantage. We intend to vigorously protect and defend our intellectual property. Costly and time-consuming
litigation brought by us may be necessary to enforce our patents and to protect our trade secrets and know-how, or to determine
the enforceability, scope and validity of the proprietary rights of others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We also rely upon trade
secrets, technical know-how and continuing technological innovation to develop and maintain our competitive position. In the past
our employees, consultants, advisors and suppliers have not always executed confidentiality agreements and inventions assignment
and work for hire agreements in connection with their employment, consulting, or advisory relationships. Consequently, we may not
have adequate remedies available to us to protect our intellectual property should one of these parties attempt to use our trade
secrets or refuse to assign any rights he or she may have in any intellectual property he or she developed for us. Additionally,
our competitors may independently develop substantially equivalent proprietary information and techniques or otherwise gain access
to our proprietary technology, or we may not be able to meaningfully protect our rights in unpatented proprietary technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While we are not aware
of any third party that is infringing any of our patents or trademarks nor do we believe that we are infringing on the patents
or trademarks of any other person or organization, we cannot guarantee that our current and potential competitors and other third
parties have not filed (or in the future will not file) patent applications for (or have not received or in the future will not
receive) patents or obtain additional proprietary rights that will prevent, limit or interfere with our ability to make, use or
sell our solutions either in the United States or internationally. Additionally, we may face assertions of claims by holders of
patents alleging that we are infringing upon their patent rights, which claims may be without merit, but may nonetheless result
in our incurring substantial costs of defense.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We are dependent
on a third party for the continued development and maintenance of our Cryoportal&trade;<SUP> </SUP>software.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our proprietary Cryoportal&trade;
is a logistics platform software used by our customers, business partners and client care team to automate the entry of orders,
prepare customs documentation and facilitate status and location monitoring of shipped orders while in transit. The continued development
of the Cryoportal&trade; platform is contracted with an outside software development company. If this developer becomes unable
or unwilling to continue work on scheduled projects, and an alternative software development company cannot be secured, we may
not be able to implement needed enhancements to the system. Furthermore, if we terminate our agreement with our current software
developer and cannot reach an agreement or fail to fulfill an agreement for the termination, it is possible we could lose our license
to use this software. Failure to proceed with enhancements or the loss of our license for the system would adversely affect our
ability to generate new business and serve existing customers, resulting in a reduction in revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>Our customers could
also become the target of litigation relating to the patent and other intellectual property rights of others. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Any litigation relating
to the intellectual property rights of others could trigger technical support and indemnification obligations in licenses or customer
agreements that we may enter into. These obligations could result in substantial expenses, including the payment by us of costs
and damages relating to claims of intellectual property infringement. In addition to the time and expense required for us to provide
support or indemnification to our customers, any such litigation could disrupt the businesses of our customers, which in turn could
hurt our relationships with such customers and cause the sale of our products to decrease. No assurance can be given that claims
for indemnification will not be made, or that if made, such claims would not have a material adverse effect on our business, operating
results or financial conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our Cryoportal&trade;
software platform may be subject to intentional disruption that could adversely impact our reputation and future revenues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have implemented our
Cryoportal&trade; software platform which is used by our customers and business partners to automate the entry of orders, prepare
customs documentation and facilitate status and location monitoring of shipped orders while in transit. Although we believe we
have sufficient controls in place to prevent intentional disruptions, we could be a target of cyber-attacks specifically designed
to impede the performance of the Cryoportal&trade;<SUP> </SUP>software platform. Similarly, experienced computer programmers may
attempt to penetrate our Cryoportal&trade; software platform in an effort to search for and misappropriate proprietary or confidential
information or cause interruptions of our services. Because the techniques used by such computer programmers to access or sabotage
networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques.
Our activities could be adversely affected and our reputation, brand and future sales could be harmed if such intentionally disruptive
efforts were successful.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><U>Regulatory Risks Relating
to Our Business</U></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Complying with
certain regulations that apply to shipments using our solutions can limit our activities and increase our cost of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Shipments using our solutions
and services are subject to various regulations in the various countries in which we operate. For example, shipments using our
solutions may be required to comply with the shipping requirements promulgated by the Centers for Disease Control (&ldquo;CDC&rdquo;),
the Occupational Safety and Health Organization (&ldquo;OSHA&rdquo;), the Department of Transportation (&ldquo;DOT&rdquo;) as well
as rules established by the IATA and the ICAO. Additionally, our data logger may be subject to regulation and certification by
the Food and Drug Administration (&ldquo;FDA&rdquo;), Federal Communications Commission (&ldquo;FCC&rdquo;), and the Federal Aviation
Administration (&ldquo;FAA&rdquo;). We will need to ensure that our solutions and services comply with relevant rules and regulations
to make our solutions and services marketable, and in some cases compliance is difficult to determine. Significant changes in such
regulations could require costly changes to our solutions and services or prevent use of our shippers for an extended period of
time while we seek to comply with changed regulations. If we are unable to comply with any of these rules or regulations or fail
to obtain any required approvals, our ability to market our solutions and services may be adversely affected. In addition, even
if we are able to comply with these rules and regulations, compliance can result in increased costs. In either event, our financial
results and condition may be adversely affected. We depend on our business partners and unrelated and frequently unknown third
party agents in foreign countries to act on our behalf to complete the importation process and to make delivery of our shippers
to the final user. The failure of these third parties to perform their duties could result in damage to the contents of the shipper
resulting in customer dissatisfaction or liability to us, even if we are not at fault.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Risks Relating to Our
Current Financing Arrangements</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Certain of our
existing stockholders own and have the right to acquire a substantial number of shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of March 12, 2015,
our directors, executive officers and beneficial owners of 5% or more of our outstanding common stock beneficially owned 1,737,017
shares of common stock (without regard to beneficial ownership limitations contained in certain warrants) assuming their exercise
of all outstanding preferred stock, warrants and options that are exercisable within 60 days of March 12, 2015 or approximately
19.4% of our outstanding common stock. Of these shares of common stock, 431,204&nbsp;shares, or approximately 5.4% of our common
stock, will be beneficially owned by Cranshire Capital Master Fund. As such, the concentration of beneficial ownership of our common
stock may have the effect of delaying or preventing a change in control of Cryoport and may adversely affect the voting or other
rights of other holders of our common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The sale of substantial
shares of our common stock may depress our stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of December 31, 2014
there were 7,507,231 shares of our common stock outstanding. Substantially all of these shares of common stock are eligible for
trading in the public market. The market price of our common stock may decline if our stockholders sell a large number of shares
of our common stock in the public market, or the market perceives that such sales may occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We could also issue up
to 13,086,586&nbsp;shares of our common stock, including shares to be issued upon the conversion of outstanding preferred stock,
exercise of outstanding warrants and options, or reserved for future issuance under our stock incentive plans, as further described
in the following table:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 92%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR> Shares of<BR> Common&nbsp;Stock<BR> Issuable or<BR> Reserved for<BR> Issuance</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 82%; text-align: justify; text-indent: -12pt; padding-left: 12pt">Common stock issuable upon conversion of outstanding preferred stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">1,660,830</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -12pt; padding-left: 12pt">Common stock issuable upon exercise of outstanding warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,397,894</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: -12pt; padding-left: 12pt">Common stock issuable upon exercise of outstanding options or reserved for future incentive awards under our stock incentive plans</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,027,862</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -12pt; padding-left: 12pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -12pt; padding-left: 12pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,086,586</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Of the total options and
warrants outstanding as of December 31, 2014 options and warrants exercisable for an aggregate of 1,178,801 shares of common stock
would be considered dilutive to the value of our stockholders&rsquo; interest in Cryoport because we would receive upon exercise
of such options and warrants an amount per share that is less than the market price of our common stock on December 31, 2014.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If equity research
analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our common
stock and warrants, the price of our common stock and warrants could decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The trading market for
our common stock and warrants relies in part on the research and reports that equity research analysts publish about us and our
business. We do not control these analysts. The price of our common stock and warrants could decline if one or more equity analyst
downgrades our stock or if analysts downgrade our stock or issue other unfavorable commentary or cease publishing reports about
us or our business.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We have not paid
dividends on our common stock in the past and do not expect to pay dividends in the foreseeable future. Any return on investment
may be limited to the value of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have never paid cash
dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on
our common stock will depend on our earnings, financial condition and other business and economic factors affecting us at such
time as the Board of Directors may consider the payment of any such dividends. If we do not pay dividends, our common stock may
be less valuable because a return on your investment will only occur if the price of our common stock appreciates.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We need additional
capital, and the sale of additional shares of common stock or other equity securities could result in additional dilution to our
stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our current cash and cash
equivalents and anticipated cash flow from operations are insufficient to meet our cash needs. We require additional cash resources
to fund our operations and may require additional funds in the future due to changed business conditions or other future developments,
including any investments or acquisitions we may decide to pursue. The sale of additional equity securities, or debt securities
convertible into equity securities, could result in additional dilution to our stockholders. The incurrence of indebtedness would
result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our Articles
of Incorporation allow our Board of Directors to issue up to 2,500,000 shares of &ldquo;blank check&rdquo; preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Articles of Incorporation
allows our Board of Directors to issue up to 2,500,000 shares of &ldquo;blank check&rdquo; preferred stock, without action by our
stockholders. We have designated 800,000 shares as Class A Preferred Stock, of which 454,750 shares are issued and outstanding
at March 12, 2015, and 400,000 shares as Class B Preferred Stock, of which 26,134 shares are issued and outstanding at March 12,
2015. Accordingly, the Board of Directors will have discretion to issue up to 1,300,000 shares on terms determined by them. Without
limiting the foregoing, (i) such shares of preferred stock could have liquidation rights that are senior to the liquidation preference
applicable to our common stock and Preferred Stock, (ii) such shares of preferred stock could have voting or conversion rights,
which could adversely affect the voting power of the holders of our common stock and Preferred Stock and (iii) the ownership interest
of holders of our common stock will be diluted following the issuance of any such shares of preferred stock. In addition, the issuance
of such shares of blank check preferred stock could have the effect of discouraging, delaying or preventing a change of control
of our Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Provisions in
our bylaws and Nevada law might discourage, delay or prevent a change of control of our Company or changes in our management and,
as a result, may depress the trading price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Provisions of our bylaws
and Nevada law may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider
favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. The relevant
bylaw provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions
include advance notice requirements for stockholder proposals and nominations, and the ability of our Board of Directors to make,
alter or repeal our bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Absent approval of our
Board of Directors, our bylaws may only be amended or repealed by the affirmative vote of the holders of at least a majority of
our outstanding shares of capital stock entitled to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition, Section&nbsp;78.438
of the Nevada Revised Statutes prohibits a publicly-held Nevada corporation from engaging in a business combination with an interested
stockholder (generally defined as a person which together with its affiliates owns, or within the last three years has owned, 10%
of our voting stock, for a period of two years after the date of the transaction in which the person became an interested stockholder)
unless the business combination is approved in a prescribed manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The existence of the foregoing
provisions and other potential anti-takeover measures could limit the price that investors might be willing to pay in the future
for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that
you could receive a premium for your common stock in an acquisition.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Even though we
are not incorporated in California, we may become subject to a number of provisions of the California General Corporation Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Section&nbsp;2115(b) of
the California Corporations Code imposes certain requirements of California corporate law on corporations organized outside California
that, in general, are doing more than 50% of their business in California and have more than 50% of their outstanding voting securities
held of record by persons residing in California. While we are not currently subject to Section&nbsp;2115(b), we may become subject
to it in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following summarizes
some of the principal differences which would apply if we become subject to Section&nbsp;2115(b).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under both Nevada and
California law, cumulative voting for the election of directors is permitted. However, under Nevada law, cumulative voting must
be expressly authorized in the Articles of Incorporation and our Amended and Restated Articles of Incorporation do not authorize
cumulative voting. If we become subject to Section&nbsp;2115(b), we may be required to permit cumulative voting if any stockholder
properly requests to cumulate his or her votes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under Nevada law, the
stockholders may remove directors by the vote of two-thirds of the voting power of the issued and outstanding stock entitled to
vote. However, California law permits the removal of directors by the vote of only a majority of the outstanding shares entitled
to vote. If we become subject to Section&nbsp;2115(b), the removal of a director may be accomplished by a majority vote, rather
than a vote of two-thirds, of the stockholders entitled to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under California law,
the corporation must take certain steps to be allowed to provide for greater indemnification of its officers and directors than
is provided in the California Corporation Code. If we become subject to Section&nbsp;2115(b), our ability to indemnify our officers
and directors, to the extent permitted in our Articles of Incorporation, Bylaws and under Nevada law, may be limited by California
law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Nevada law permits distributions
to stockholders as long as, after the distribution, (i)&nbsp;the corporation would be able to pay its debts as they become due
and (ii)&nbsp;the corporation&rsquo;s total assets are at least equal to its liabilities and preferential dissolution obligations.
Under California law, distributions may be made to stockholders as long as the corporation would be able to pay its debts as they
mature and either (i)&nbsp;the corporation&rsquo;s retained earnings equal or exceed the amount of the proposed distributions,
or (ii)&nbsp;after the distributions, the corporation&rsquo;s tangible assets are at least 125% of its liabilities and the corporation&rsquo;s
current assets are at least equal to its current liabilities (or, 125% of its current liabilities if the corporation&rsquo;s average
operating income for the two most recently completed fiscal years was less than the average of the interest expense of the corporation
for those fiscal years). If we become subject to Section&nbsp;2115(b), we will have to satisfy more stringent financial requirements
to be able to pay dividends to our stockholders. Additionally, stockholders may be liable to the corporation if we pay dividends
in violation of California law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">California law permits
a corporation to provide &ldquo;supermajority vote&rdquo; provisions in its Articles of Incorporation, which would require specific
actions to obtain greater than a majority of the votes, but not more than 66 <SUP>2</SUP> / <SUB>3</SUB> percent. Nevada law does
not permit supermajority vote provisions. If we become subject to Section&nbsp;2115(b), it is possible that our stockholders would
vote to amend our Articles of Incorporation and require a supermajority vote for us to take specific actions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under California law,
in a disposition of substantially of all the corporation&rsquo;s assets, if the acquiring party is in control of or under common
control with the disposing corporation, the principal terms of the sale must be approved by 90 percent of the stockholders. Although
Nevada law does contain certain rules governing interested stockholder business combinations, it does not require similar stockholder
approval. If we become subject to Section&nbsp;2115(b), we may have to obtain the vote of a greater percentage of the stockholders
to approve a sale of our assets to a party that is in control of, or under common control with, us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">California law places
certain additional approval rights in connection with a merger if all of the shares of each class or series of a corporation are
not treated equally or if the surviving or parent party to a merger represents more than 50 percent of the voting power of the
other corporation prior to the merger. Nevada law does not require such approval. If we become subject to Section&nbsp;2115(b),
we may have to obtain the vote of a greater percentage of the stockholders to approve a merger that treats shares of a class or
series differently or where a surviving or parent party to the merger represents more than 50% of the voting power of the other
corporation prior to the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">California law requires
the vote of each class to approve a reorganization or a conversion of a corporation into another entity. Nevada law does not require
a separate vote for each class. If we become subject to Section&nbsp;2115(b), we may have to obtain the approval of each class
if we desire to reorganize or convert into another type of entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">California law provides
greater dissenters&rsquo; rights to stockholders than Nevada law. If we become subject to Section&nbsp;2115(b), more stockholders
may be entitled to dissenters&rsquo; rights, which may limit our ability to merge with another entity or reorganize.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our stock is
deemed to be penny stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our stock is currently
traded on the OTCQB, operated by the OTC Markets Group, Inc., and is subject to the &ldquo;penny stock rules&rdquo; adopted pursuant
to Section 15(g) of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;). The penny stock rules apply
to companies not listed on a national exchange whose common stock trades at less than $5.00 per share or which have tangible net
worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). Such rules require, among
other things, that brokers who trade &ldquo;penny stock&rdquo; to persons other than &ldquo;established customers&rdquo; complete
certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading
in the security, including a risk disclosure document and quote information under certain circumstances. Penny stocks sold in violation
of the applicable rules may entitle the buyer of the stock to rescind the sale and receive a full refund from the broker.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Many brokers have decided
not to trade &ldquo;penny stock&rdquo; because of the requirements of the penny stock rules and, as a result, the number of broker-dealers
willing to act as market makers in such securities is limited. In the event that we remain subject to the &ldquo;penny stock rules&rdquo;
for any significant period, there may develop an adverse impact on the market, if any, for our securities. Because our securities
are subject to the &ldquo;penny stock rules,&rdquo; investors will find it more difficult to dispose of our securities. Further,
for companies whose securities are traded on the OTCQB, it is more difficult: (i) to obtain accurate quotations, (ii)
to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not
publish press releases about such companies, and (iii) to obtain needed capital.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">If we fail to
maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results, and current and potential stockholders may lose confidence in our financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We are required by the
SEC to establish and maintain adequate internal control over financial reporting that provides reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting
principles. We are likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose
any changes and material weaknesses in those internal controls.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Any failure to maintain
such internal controls in the future could adversely impact our ability to report our financial results on a timely and accurate
basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise,
if our financial statements are not filed on a timely basis as required by the SEC and the OTCQB, we could face severe
consequences from those authorities. In either case, there could result a material adverse effect on our business. Inferior internal
controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our publicly-filed
SEC reports are reviewed by the SEC from time to time and any significant changes required as a result of any such review may result
in material liability to us and have a material adverse impact on the trading price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The reports of publicly-traded
companies are subject to review by the SEC from time to time for the purpose of assisting companies in complying with applicable
disclosure requirements and to enhance the overall effectiveness of companies&rsquo; public filings, and reviews of such reports
are now required at least every three years under the Sarbanes-Oxley Act of 2002. SEC reviews may be initiated at any time, and
we could be required to modify or reformulate information contained in prior filings as a result of an SEC review. Any modification
or reformulation of information contained in such reports could be significant and could result in material liability to us and
have a material adverse impact on the trading price of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 11.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B><I>The requirements
of being a U.S. public company may strain our resources and divert management&rsquo;s attention.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As a U.S. public company,
we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, certain listing requirements,
and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and
financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems
and resources. The Exchange Act requires, among other things, that we file annual and current reports with respect to our business
and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As a result of disclosure
of information in this prospectus and in filings required of a public company, our business and financial condition is more visible,
which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims
are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved
in our favor, these claims, and the time and resources necessary to resolve them, could divert resources of our management and
harm our business and operating results.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Risks Relating Principally
to This Offering and Our Capital Structure</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">We have broad
discretion in the use of the net proceeds from this offering and may not use them effectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We cannot specify with
certainty all of&nbsp;our potential uses for the estimated $13,600,000 in net proceeds we will receive from this offering.&nbsp;&nbsp;Our&nbsp;management
will have broad discretion in the application of the net proceeds. Accordingly, you will have to rely upon the judgment of our
management with respect to the use of the proceeds, with only limited information concerning management&rsquo;s specific intentions.
Our management may spend a portion or all of the net proceeds from this offering in ways that our stockholders may not desire or
that may not yield a favorable return. The failure by our management to apply these funds effectively could harm our business.
Pending its use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">An active market
for our common stock and warrants may not develop or be maintained, which could limit your ability to sell your common stock and/or
warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Prior to this offering,
there has been a limited public market for our common stock and no market for our warrants and the public offering price may bear
no relationship to the price at which our common stock and warrants will trade after this offering.&nbsp;&nbsp;There can be no
assurance that an active public market for our common stock or warrants will develop or be sustained after this offering or how
liquid that market might become.&nbsp;&nbsp;As a result, investors may not be able to sell their common stock or warrants at or
above the public offering price or at the time that they would like to sell.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Our stock and
warrant price may be volatile.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt">The market price of our
common stock and warrants is likely to be highly volatile and could fluctuate widely in price in response to various factors, many
of which are beyond our control, including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">technological innovations or new products and services
by us or our competitors,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">additions or departures of key personnel,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">sales of our common stock,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to integrate operations, technology, products
and services,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our ability to execute our business plan,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">operating results below expectations,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">loss of any strategic relationship,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">industry developments,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">economic and other external factors, and</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">period-to-period fluctuations in our financial results.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">You may consider any one
of these factors to be material.&nbsp;&nbsp;The price of common stock and warrants may fluctuate widely as a result of any of the
above listed factors.&nbsp;&nbsp;In addition, the securities markets have from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially
and adversely affect the market price of our common stock and warrants.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">A significant
portion of our total outstanding shares of common stock may be sold into the public market in the near future, which could cause
the market price of our common stock and warrants to drop significantly, even if our business is doing well.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Sales of a substantial
number of shares of our common stock in the public market could occur at any time after the expiration of the lock-up agreements
described in &ldquo;Underwriting and Plan of Distribution.&rdquo; These sales, or the market perception that the holders of a large
number of shares of common stock intend to sell shares of common stock, could reduce the market price of our common stock and warrants.
After this offering, we will have up to 12,666,600 shares of common stock outstanding based on the number of shares of common stock
outstanding as of March 12, 2015 and after giving effect to the anticipated 8-to-1 reverse stock split. This amount includes the
3,409,091 shares of common stock that we are selling in this offering, which may be resold in the public market immediately and
1,719,145 shares of common stock that will be issued upon the mandatory conversion of Class A and Class B preferred stock. The
remaining 7,538,364 shares of common stock, or 60% of our outstanding shares of common stock after this offering, will be able
to be sold immediately, subject to any applicable volume limitations under federal securities laws, or within 180 days after the
date of this prospectus, subject to extension in specified instances, due to lock-up agreements between certain holders of some
of these shares of common stock and the underwriters (as described in &ldquo;Underwriting and Plan of Distribution&rdquo;). However,
the underwriters can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares of common
stock at any time.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">When we effect
a reverse stock split, the liquidity of our common stock and market capitalization could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Board of Directors
intends to effect a reverse stock split in order to increase the stock price to a level that will enable it to apply for listing
on the NASDAQ Capital Market or other national stock exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">A reverse stock split
is often viewed negatively by the market and, consequently, can lead to a decrease in our overall market capitalization.&nbsp;&nbsp;If
the per share market price does not increase proportionately as a result of the reverse split, then the value of our company as
measured by our market capitalization will be reduced, perhaps significantly. This also will significantly reduce the number of
shares of our common stock that are outstanding, and the liquidity of our common stock could be adversely affected and you may
find it more difficult to purchase or sell shares of our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>If you purchase shares
of common stock in this offering, you will suffer immediate dilution of your investment.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The public offering per
price per share of our common stock will be substantially higher than the net tangible book value per share of our common stock
immediately after the offering. At the assumed public offering price of $4.40 per share, purchasers of our common stock will incur
immediate dilution <FONT STYLE="background-color: yellow">of $3.42</FONT> per share in the net tangible book value of their purchased
shares. Conversely, the shares of our common stock that our existing stockholders currently own will receive an increase in net
tangible book value per share. See &ldquo;Dilution.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>You may be diluted
by exercises of outstanding options and warrants and conversions of outstanding convertible promissory notes.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of March 12, 2015,
we had outstanding options to purchase an aggregate of 2,621,716 shares of our common stock at a weighted average exercise price
of $3.01 per share, warrants to purchase an aggregate of 8,022,740 shares of our common stock at a weighted average exercise price
of $4.80 per share and convertible promissory notes convertible at a twenty percent (20%) discount to the price per share of the
securities issued by the Company in this public offering. The exercise of such outstanding options and warrants and the conversion
of such outstanding convertible promissory notes will result in further dilution of your investment. In addition, you may experience
additional dilution if we issue common stock in the future. As a result of this dilution, you may receive significantly less in
net tangible book value than the full purchase price you paid for the shares in the event of liquidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">There is no guarantee
that our shares of common stock or warrants will be listed on the NASDAQ Capital Market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with the
filing of the registration statement of which this prospectus forms a part, we applied for listing of our common stock and warrants
on the NASDAQ Capital Market.&nbsp;&nbsp;After the consummation of this offering, we believe that we will satisfy the listing requirements
and expect that our common stock and warrants will be listed on the NASDAQ Capital Market.&nbsp;&nbsp;Such listing, however, is
not guaranteed.&nbsp;&nbsp;If such listing is approved, there can be no assurance any broker will be interested in trading our
stock.&nbsp;&nbsp;Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them.&nbsp;&nbsp;Our
lead underwriter, Aegis Capital Corp., is not obligated to make a market in our securities, and even if they make a market, they
can discontinue market making at any time without notice.&nbsp;&nbsp;Neither we nor the underwriters can provide any assurance
that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If our common stock and
warrants are approved for listing on the NASDAQ Capital Market, there is no guarantee that we will be able to maintain such listing
for any period of time by perpetually satisfying NASDAQ&rsquo;s continued listing requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>Because we do not anticipate
paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source
of gain.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have not historically,
and do not anticipate paying future dividends on our capital stock. We currently intend to retain all of our future earnings, as
applicable, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude
us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the
foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B><I>Reports published by
securities or industry analysts, including projections in those reports that exceed our actual results, could adversely affect
our common stock price and trading volume. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Securities research analysts,
including those affiliated with our underwriters, may establish and publish their own periodic projections for our business. These
projections may vary widely from one another and may not accurately predict the results we actually achieve. Our stock price may
decline if our actual results do not match securities research analysts&rsquo; projections. Similarly, if one or more of the analysts
who writes reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price
could decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, our
stock price or trading volume could decline. While we expect securities research analyst coverage, if no securities or industry
analysts begin to cover us, the trading price for our stock and the trading volume could be adversely affected.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_003"></A>FORWARD-LOOKING STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This prospectus contains
forward-looking statements. All statements other than statements of historical fact contained in this prospectus, including statements
regarding our future results of operations and financial position, business strategy and plans and objectives of management for
future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In some cases, you can
identify forward-looking statements by terms such as &ldquo;may,&rdquo; &ldquo;will,&rdquo; &ldquo;should,&rdquo; &ldquo;expects,&rdquo;
&ldquo;plans,&rdquo; &ldquo;anticipates,&rdquo; &ldquo;could,&rdquo; &ldquo;intends,&rdquo; &ldquo;target,&rdquo; &ldquo;projects,&rdquo;
&ldquo;contemplates,&rdquo; &ldquo;believes,&rdquo; &ldquo;estimates,&rdquo; &ldquo;predicts,&rdquo; &ldquo;potential,&rdquo; &ldquo;continue,&rdquo;
or the negative of these terms or other similar words. These statements are only predictions. We have based these forward-looking
statements largely on our current expectations and projections about future events and financial trends that we believe may affect
our business, financial condition and results of operations. We discuss many of the risks in greater detail under the heading &ldquo;Risk
Factors.&rdquo; Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus.
Forward-looking statements in this prospectus include, but are not necessarily limited to, those relating to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our intention to introduce new products or services,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our expectations about securing strategic relationships
with global couriers or large clinical research organization,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our future capital needs,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">results of our research and development efforts, and</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">success of our patent applications.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Forward-looking statements
are subject to risks and uncertainties, certain of which are beyond our control. Actual results could differ materially from those
anticipated as a result of the factors described in &ldquo;Risk Factors&rdquo; in this prospectus and detailed in our other SEC
filings, including among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Symbol; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the effect of regulation by United States and foreign
governmental agencies,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">research and development efforts, including delays in
developing, or the failure to develop, our products,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the development of competing or more effective products
by other parties,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">uncertainty of market acceptance of our products,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">errors in business planning attributable to insufficient
market size or segmentation data,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">problems that we may face in manufacturing, marketing,
and distributing our products,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">problems that we may encounter in further development
of Cryoport Express&reg; Solutions, which includes the cloud-based logistics management software branded as Cryoportal&trade;,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">our inability to raise additional capital when needed,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">delays in the issuance of, or the failure to obtain,
patents for certain of our products and technologies,</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">problems with important suppliers and strategic business
partners, and</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">difficulties or delays in establishing marketing relationships
with international couriers.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Because of these risks
and uncertainties, the forward-looking events and circumstances discussed in this prospectus might not transpire. Except for our
ongoing obligations to disclose material information as required by the federal securities laws, we undertake no obligation to
release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may
materially affect our actual results and may be beyond our control. New factors emerge from time to time, and it is not possible
for our management to predict all of such factors or to assess the effect of each factor on our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This prospectus also contains
estimates and other industry and statistical data developed by independent parties and by us relating to market size, growth, and
segmentation of markets. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight
to such estimates. We have not independently verified these estimates generated by independent parties and contained in this prospectus
and, accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions, and estimates of our
future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of
uncertainty and risk due to a variety of factors, including those described in &ldquo;Risk Factors,&rdquo; &ldquo;Management&rsquo;s
Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; and elsewhere in this prospectus. These and other
factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_004"></A>USE OF PROCEEDS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We estimate that the net proceeds
to us from the sale of the shares of common stock and warrants that we are offering will be approximately $13,600,000, based on
an assumed public offering price of $4.40 per share of common stock and warrant to purchase one share of common stock and after
deducting underwriting discounts and commissions and estimated offering expenses that we must pay. We intend to use those net proceeds
primarily for working capital purposes and to partially repay certain secured promissory notes. Currently, our monthly operating
deficit is approximately $445,000 per month. Initially, we will have an increasing need for working capital to support our growth
strategy; hence, the amount of operating deficit may increase in advance of the anticipated substantial growth in our revenues.
With appropriate funding, such as receipt of proceeds from the issuance of substantially all of the shares of common stock and
warrants in this offering, we anticipate achieving cash flow breakeven involving an annual revenue run rate of $12&nbsp;million
in twelve to fourteen months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Between December 3, 2014 and
February 17, 2015, we issued our 7% Bridge Notes in the aggregate original principal amount of $915,000. Pursuant to the terms
of such notes, we are required to make prepayments in the amount equal to twenty five percent (25%) of the net cash proceeds received
by us from debt or equity offerings we complete. As of March 12, 2015, we have repaid approximately $173,600 of the original principal
amount of such notes. Accordingly, twenty five percent (25%) of the net cash proceeds received by us in the Offering will be used
to prepay such notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Pending any use, as described
above, we plan to invest the net proceeds in investment-grade, short-term, interest-bearing securities.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_005"></A>MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Market Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our common stock is traded
on the OTCQB, operated by the OTC Markets Group, Inc. under the symbol &ldquo;CYRX&rdquo;. We have also applied for listing of
our common stock on the NASDAQ Capital Market under the symbol [&ldquo;*&rdquo;]. No assurance can be given that our application
will be approved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 27pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 27pt">On March 12, 2015, the last
reported sale price for our common stock was $4.40 per share (after giving effect to the anticipated 8-to-1 reverse stock split).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">There can be no assurances
that an active public market for our common stock or warrants will develop or be sustained. The high and low closing sale prices
of our common stock reported by OTCQB during the periods indicated were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12pt; padding-left: 12pt">Year 2015:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; text-align: left; text-indent: -12pt; padding-left: 0.5in">Third Quarter Ended December 31, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3.84</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2.88</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Second Quarter Ended September&nbsp;30, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.92</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.20</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">First Quarter Ended June&nbsp;30, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.24</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.80</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12pt; padding-left: 12pt">Year 2014:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Fourth Quarter Ended March 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.56</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.72</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Third Quarter Ended December&nbsp;31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.40</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Second Quarter Ended September&nbsp;30, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.84</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">First Quarter Ended June&nbsp;30, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.48</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.28</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12pt; padding-left: 12pt">Year 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Fourth Quarter Ended March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.88</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.64</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Third Quarter Ended December&nbsp;31, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.88</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Second Quarter Ended September&nbsp;30, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.08</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.52</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">First Quarter Ended June&nbsp;30, 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5.60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.96</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Number of Stockholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of March 12, 2015,
there were 229 record holders of our common stock.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Dividend Policy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">No dividends on common
stock have been declared or paid by the Company. As of December 31, 2014, the Company had cumulative, undeclared dividends that
have not been accrued related to its outstanding preferred stock of $194,900. Upon the closing of this offering, the outstanding
Class A Convertible Preferred Stock and the Class B Convertible Preferred Stock, including the dividends that have accrued thereon,
will automatically convert into common stock and warrants. The Company intends to employ all available funds for the development
of its business and, accordingly, does not intend to pay any cash dividends in the foreseeable future.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Securities Authorized
For Issuance Under Equity Compensation Plans</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently maintain
three equity compensation plans, referred to as the 2002 Stock Incentive Plan (the &ldquo;2002 Plan&rdquo;), the 2009 Stock Incentive
Plan (the &ldquo;2009 Plan&rdquo;) and the 2011 Stock Incentive Plan (the &ldquo;2011 Plan&rdquo;). Our Compensation Committee
is responsible for making, reviewing and recommending grants of options and other awards under these plans which are approved by
the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2002 Plan, which was
approved by our stockholders in October 2002, allows for the grant of options to purchase up to 62,500 shares of the Company&rsquo;s
common stock. The 2002 Plan provides for the granting of options to purchase shares of our common stock at prices not less than
the fair market value of the stock at the date of grant and generally expire 10 years after the date of grant. The stock options
are subject to vesting requirements, generally three or four years. The 2002 Plan also provides for the granting of restricted
shares of common stock subject to vesting requirements. The 2002 Plan expired as of October 2012, and thus no shares are available
for issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2009 Plan, which was
approved by our stockholders at our 2009 Annual Meeting of Stockholders held on October&nbsp;9, 2009, provides for the grant of
stock-based incentives. The 2009 Plan allows for the grant of up to 150,000 shares of our common stock for awards to our officers,
directors, employees and consultants. The 2009 Plan provides for the grant of incentive stock options, nonqualified stock options,
restricted stock rights, restricted stock, performance share units, performance shares, performance cash awards, stock appreciation
rights, and stock grant awards. The 2009 Plan also permits the grant of awards that may qualify for the &ldquo;performance-based
compensation&rdquo; exception to the $1,000,000 limitation on the deduction of compensation imposed by Section&nbsp;162(m) of the
Code. As of December 31, 2014, a total of 37,971 shares of our common stock remained available for future grants under the 2009
Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2011 Plan, as amended,
which was approved by our stockholders at our 2011 Annual Meeting of Stockholders held on September&nbsp;22, 2011 and, with respect
to the amendments, at our 2012, 2013 and 2014 Annual Meeting of Stockholders held on September 13, 2012, September 6, 2013 and
August 29, 2014, respectively, provides for the grant of stock-based incentives. The 2011 Plan allows for the grant of up to 1,737,500
shares of our common stock for awards to our officers, directors, employees and consultants. The 2011 Plan provides for the grant
of incentive stock options, nonqualified stock options, restricted stock rights, restricted stock, performance share units, performance
shares, performance cash awards, stock appreciation rights, and stock grant awards. The 2011 Plan also permits the grant of awards
that may qualify for the &ldquo;performance-based compensation&rdquo; exception to the $1,000,000 limitation on the deduction of
compensation imposed by Section&nbsp;162(m) of the Code. Awards may be granted under the 2011 Plan until September&nbsp;21, 2021
or until all shares available for awards under the 2011 Plan have been purchased or acquired unless the stockholders of the Company
vote to approve an extension of the 2011 Plan prior to such expiration date. As of December 31, 2014, a total of 323,249 shares
remained available for future grants under the 2011 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition to the stock
options issued pursuant to the Company&rsquo;s incentive plans, the Company has granted warrants to employees, officers, non-employee
directors and consultants. The warrants are generally not subject to vesting requirements and have ten-year terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth certain information as of December 31, 2014 concerning the Company&rsquo;s common stock that may be issued upon the exercise
of options or warrants or pursuant to purchases of stock under the 2002 Plan, the 2009 Plan, the 2011 Plan and other stock based
compensation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Plan Category</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(a)<BR> &nbsp;Number&nbsp;of&nbsp;Securities<BR> &nbsp;to be Issued Upon the<BR> &nbsp;Exercise of<BR> &nbsp;Outstanding Options<BR> &nbsp;and Warrants</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(b)<BR> &nbsp;Weighted-Average<BR> &nbsp;Exercise Price of<BR> &nbsp;Outstanding<BR> &nbsp;Options and<BR> &nbsp;Warrants</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(c)<BR> Available&nbsp;for&nbsp;Future<BR> Issuance&nbsp;Under&nbsp;Equity<BR> Compensation Plans<BR> (Excluding Securities<BR> Reflected&nbsp;in&nbsp;Column&nbsp;(a))</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Equity compensation plans approved by stockholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">1,454,320</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">3.49</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">361,220</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in"><font style="font-size: 10pt">Equity compensation plans not approved by stockholders<sup>(1)</sup></font></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,245,180</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">4.13</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">N/A</font></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,699,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">361,220</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 4%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 96%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">During November 5, 2012 through December 31, 2014, a total of 1,212,322 options were granted to employees outside of an option plan. In the past the Company has issued warrants to purchase 40,927 shares of common stock in exchange for services provided to the Company, of which warrants to purchase 32,857 shares of common stock are outstanding. The exercise prices ranged from $22.40 to $86.40 and generally vested upon issuance. Fifteen consultants and former officers and directors received warrants to purchase 40,927 shares of common stock in this manner.</font></td></tr>
</table>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_006"></A>DETERMINATION OF THE
OFFERING PRICE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The public offering price
of the shares of common stock and warrants offered by this prospectus will be based on the closing market price of our common stock
immediately prior to the closing date of this offering and other factors described in &ldquo;Underwriting and Plan of Distribution.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 6pt; text-align: center; text-indent: 0in; background-color: transparent"><A NAME="a_025"></A><B>CAPITALIZATION</B></P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt; text-align: left; text-indent: 0in; background-color: transparent">The
following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2014, in each case after giving
effect to the proposed 8-to-1 reverse stock split of our common stock expected to be effected after the board files an amendment
to our certificate of incorporation. It is our intent to effect the reverse stock split prior to the closing of this offering:</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 0 0 37pt; text-align: justify; text-indent: -0.25in; background-color: transparent">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19pt"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify">On an actual basis;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19pt"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">On a proforma basis giving the effect the following transactions and adjustments
as if they had occurred on December 31, 2014:</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 37pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">The issuance of 1,719,145 shares of common stock issuable upon the mandatory
conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon
the closing of this financing (includes 11,862 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred
Stock issued at $12.00 per share during the period January 1, 2015 through March 12, 2015 and the conversion of unpaid dividends
for the Class A Preferred Stock and Class B Preferred Stock totaling $278,760 and $2,023, respectively, as of March 12, 2015).</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 19pt"></TD><TD STYLE="width: 18pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">On a proforma as adjusted basis, giving effect to the sale by us of 3,409,941
shares of common stock in this offering at an assumed public offering price of $4.40 per share, after deducting the estimated underwriting
discounts and commissions and estimated offering expenses payable to us.</TD></TR></TABLE>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt; text-align: justify; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt; text-align: justify; text-indent: 0in; background-color: transparent">You
should read this table together with &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt; text-align: justify; text-indent: 0in; background-color: transparent">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">December 31, 2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Pro Forma</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Actual</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Pro Forma</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">As Adjusted</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(unaudited)</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 61%; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 2.5pt">Cash and Cash Equivalents</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 2.5pt double">773,922</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 2.5pt double">1,229,874</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 10%; text-align: right; border-bottom: Black 2.5pt double">14,829,874</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Stockholders (Deficit) Equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">Preferred Stock, $0.001 par value; 2,500,000 shares authorized;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">Class A convertible preferred stock - $0.001 par value; 800,000 shares authorized 442,888 shares issued and outstanding, actual; no shares issued and outstanding pro forma; no shares issued and outstanding pro forma as adjusted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">443</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">Common stock, $0.001 par value; 250,000,000 shares
    authorized; 7,507,231 shares issued and outstanding, actual; 9,226,376 shares issued and outstanding pro forma; 12,635,467
    shares issued and outstanding, pro forma as adjusted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,507</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,226</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,635</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,802,795</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">93,538,254</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">107,134,845</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(93,928,378</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(94,209,161</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(94,209,161</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">Total capitalization</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(1,117,633</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(661,681</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,938,319</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin: 0 1pt 0 0; text-align: justify; text-indent: 0in; background-color: transparent">The
number of shares of our common stock to be outstanding after this offering is based on 7,507,231 shares outstanding as of December
31, 2014, and excludes:&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">2,666,642 shares of our common stock issuable upon the exercise of options
outstanding December 31, 2014 with a weighted average exercise price of $3.01 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">8,397,894 shares of common stock issuable upon the exercise of warrants outstanding
as of December 31, 2014 with a weighted average exercise price of $6.37 per share;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">361,220 shares of common stock available for future grant as of December 31,
2014 under our 2009 and 2011 Plans.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">3,409,091 shares of common stock issuable upon the exercise of the warrants
to be issued in connection with this offering;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">1,719,145 shares of our common stock issuable upon the exercise of warrants
that will be issued upon the mandatory conversion of the Class A Preferred Stock and Class B Preferred Stock that will occur upon
the closing of the offering;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">Warrants to purchase up to 136,364 shares of our common stock issuable to the
underwriter in connection with the completion of this offering;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">1,022,728 shares of common stock (including the shares of common stock underlying
the warrants included as part of the shares of common stock and warrants) that comprise the shares of common stock and warrants
that may be purchased by the underwriters&rsquo; representative upon the exercise of its 45-day option to cover over-allotments, if any;
and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt/normal Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; background-color: transparent"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: justify; padding-right: 1pt">273,065 shares of common stock and 273,065 shares of common stock
                                                                   issuable upon the exercise of warrants that may be issued upon the voluntary conversion of certain promissory notes as a
                                                                   result of this offering.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_007"></A>DILUTION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If you invest in our common
stock, your interest will be diluted to the extent of the difference between the public offering price you pay and the as adjusted
net tangible book value per share of our common stock after this offering, assuming no value is attributed to the warrants we are
offering by this prospectus. Our net tangible book value as of December 31, 2014 was $(1,263,948), or $(0.17) per share of common
stock (after giving effect to the anticipated 8-to-1 reverse stock split). We calculate net tangible book value per share by calculating
the difference between the total assets less goodwill and other intangible assets and total liabilities, and dividing the result
by the number of shares of common stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Net tangible book value
dilution per share represents the difference between the amount per share of common stock and warrant to purchase one share of
common stock paid by new investors who purchase shares of common stock and warrants in this offering and the pro forma net tangible
book value per share of common stock immediately after completion of this offering&nbsp;as of December 31, 2014, after giving effect
to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: left">the sale by us of 3,409,091 shares of common stock at an assumed public offering price of $4.40 per
share and the application of the estimated net proceeds to us in this offering as described under &ldquo;Use of Proceeds&rdquo;;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: left">the 8-to-1 reverse stock split;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: left">the issuance of 1,719,145 shares of common stock that will be issued upon the mandatory conversion
of 454,750 shares of Class A Preferred Stock and 26,134 shares of Class B Preferred Stock that will occur upon the closing of this
offering.; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt">&#9679;</TD><TD STYLE="text-align: left">the estimated underwriting discounts and commissions and offering expenses payable by us.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 90.7pt; text-align: left; text-indent: -27.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">Adjusted</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 75%; text-align: left; padding-bottom: 2.5pt; text-indent: 0in"><FONT STYLE="font-size: 9pt">Assumed public
    offering price per share of common stock and warrant to purchase one share of common stock</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 9pt">4.40</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-size: 9pt">Net tangible book deficit per share  as of
    December 31, 2014</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">$</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">(0.17</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">)</FONT></TD><TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt"></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in"><FONT STYLE="font-size: 9pt">Increase in net tangible
    book value per share attributable to this offering</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 9pt">1.15</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in"><FONT STYLE="font-size: 9pt">As adjusted net tangible
    book value per share after this offering</FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt"></FONT></TD>
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.98</TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in"><FONT STYLE="font-size: 9pt">Dilution in net tangible
    book value per share to new investors</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 9pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 9pt">3.42</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table summarizes
as of December 31, 2014, on a pro forma basis to reflect the same adjustments described above, the number of shares of common stock
purchased from us, the total consideration paid and the average price per share paid by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.65in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">the existing common stockholders and preferred stockholders
on an as converted basis; and</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.25in; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.65in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">the new investors in this offering, assuming the sale
of&nbsp;3,409,091 shares of common stock offered hereby at an assumed public offering price of $4.40 per share</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The calculations are based
upon total consideration given by new and existing stockholders, before any deduction of estimated underwriting discounts and commissions
and offering expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Shares of Common Stock<BR> Purchased</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">Total Consideration</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Average <BR>Price</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Per Share</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: 0in">Existing Stockholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">9,226,376</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">73</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">46,061,487</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">75</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">4.99</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">New Investors</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,409,091</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">27</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">15,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">4.40</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">12,635,467</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">61,061,487</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">100</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">$</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">4.83</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The above table excludes
an aggregate of up to 16,690,356 additional shares of common stock reserved and available for future issuance (i) upon the&nbsp;exercise
of all outstanding stock options and warrants to purchase common stock, (ii) upon the exercise of all warrants issued in connection
with this public offering, and (iii) under the 2009 Plan and the 2011 Plan.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_008"></A><B>MANAGEMENT&rsquo;S DISCUSSION
AND ANALYSIS OF</B><BR>
<B>FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and related notes that appear elsewhere in this prospectus. In addition to historical consolidated financial information,
the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these
differences include those discussed below and elsewhere in this prospectus, particularly in &ldquo;Risk Factors.&rdquo; We caution
the reader not to place undue reliance on these forward-looking statements, which reflect management&rsquo;s analysis only as of
the date of this prospectus. We undertake no obligation to update forward-looking statements to reflect events or circumstances
occurring after the date of this prospectus.</I></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">General Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We provide cryogenic logistics
solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology and
specialized cold chain logistics knowhow. We view our solutions as disruptive to the &ldquo;older technologies&rdquo; of dry ice
and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client&rsquo;s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;</SUP>
Solutions include a sophisticated cloud-based logistics operating platform that we have branded as the Cryoportal&trade;. The Cryoportal&trade;
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal&trade; records
and retains a fully documented &ldquo;chain-of-custody&rdquo; and, at the client&rsquo;s option, &ldquo;chain-of-condition&rdquo;
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The branded packaging
for our Cryoport Express<SUP>&reg;</SUP> Solutions includes our liquid nitrogen dry vapor shippers, The Cryoport Express<SUP>&reg;</SUP>
Shippers. Cryoport Express<SUP>&reg;</SUP> Shippers are cost-effective and reusable cryogenic transport containers (our standard
shipper is a patented vacuum flask) utilizing an innovative application of &ldquo;dry vapor&rdquo; liquid nitrogen (&ldquo;LN2&rdquo;)
technology. Cryoport Express<SUP>&reg;</SUP> Shippers are International Air Transport Association (&ldquo;IATA&rdquo;) certified
and validated to maintain stable temperatures of minus 150&deg; C and below for a 10-day dynamic shipment period. The Company currently
features three Cryoport Express<SUP>&reg;</SUP> Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials), the High Volume
Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express<SUP>&reg;</SUP> CXVC1 Shipper (holding
up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials, canes, straws,
plates, etc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our most used solution
is the &ldquo;turnkey&rdquo; solution, which can be accessed directly through our cloud-based Cryoportal&trade; or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express<SUP>&reg;</SUP>
Shipper package to the client who conveniently loads its frozen commodity into the inner chamber of the Cryoport Express<SUP>&reg;</SUP>
Shipper.&nbsp; The customer then closes the shipper package and reseals the shipping box displaying the next recipient&rsquo;s
address (&ldquo;Flap A&rdquo;) for pre-arranged carrier pick up.&nbsp; Cryoport arranges for the pick-up of the parcel by a shipping
service provider, which is designated by the client or chosen by Cryoport, for delivery to the client&rsquo;s intended recipient.&nbsp;
The recipient simply opens the shipper package and removes the frozen commodity that has been shipped.&nbsp; The recipient then
reseals the package, displaying the nearest Cryoport Operations Center address (&ldquo;Flap&nbsp;B&rdquo;) making it ready for
pre-arranged carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express<SUP>&reg;</SUP> Shipper, it is
cleaned, put through quality assurance testing, and returned to inventory for reuse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard &ldquo;Turn-key Solution,&rdquo; described above, we also provide the following
customer facing, value-added solutions to address our various clients&rsquo; needs:</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer
Staged Solution</I></B>,&rdquo; designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express<SUP>&reg; </SUP>Shipper packages to our customer, in an uncharged state, enabling our customer
(after training/certification) to charge them with liquid nitrogen and use our Cryoportal&trade; to enter orders with shipping
and delivery service providers for the transportation of the package. Once the order is released, our customer services professionals
monitor the shipment and the return of the shipper for cleaning, quality assurance testing and reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer
Managed Solution</I></B>,&rdquo; a limited customer implemented solution whereby we supply our Cryoport Express<SUP>&reg;</SUP>
Shippers packages to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection
of the shipping and delivery service provider and the return of the shipper to us. Under this solution, the customer accepts a
significant level of risk for a successful shipment.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>powered
by Cryoport</I></B><SUP>SM</SUP>,&rdquo; made available to providers of shipping and delivery services who seek to offer a &ldquo;branded&rdquo;
cryogenic logistics solution as part of their service offerings, with &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; appearing
prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements,
such as minimum required shipping volumes.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Integrated
Solution,</I></B>&rdquo;<I> </I>which is our outsource solution. It is our most comprehensive and complex solution. It involves
our management of the entire cryogenic logistics process for our client, including Cryoport employees at the client&rsquo;s site
to manage the client&rsquo;s cryogenic logistics function in total.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Regenerative
Medicine Point-of-Care Repository Solution,</I></B>&rdquo; designed for allogeneic therapies. In this model we supply our Cryoport
Express<SUP>&reg;</SUP> Shipper package to ship and store cryogenically preserved life science products for up to 6 days (or longer
periods with supplementary shippers) at a point-of-care site, with the Cryoport Express<SUP>&reg;</SUP> Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service
professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport
Operations Center receives the Cryoport Express<SUP>&reg; </SUP>Shipper package it is cleaned, put through quality assurance testing,
and returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Personalized
Medicine and Cell-based Immunotherapy Solution,</I></B>&rdquo; designed for autologous therapies. In this model, our Cryoport
Express<SUP>&reg;</SUP> Shipper package serves as an enabling technology for the safe transportation of manufactured autologous
cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition
transport from, (a) the collection of the patient&rsquo;s cells in a hospital setting, to (b) a central processing facility where
they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells
to a point-of-care treatment facility.&nbsp; If required, the Cryoport Express<SUP>&reg;</SUP> Shipper can then serve as a temporary
freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where the medical
provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device.
Our customer service professionals monitor each shipment throughout the predetermined process, including the return of the shipper
to us. When the Cryoport Operations Center receives the Cryoport Express<SUP>&reg; </SUP>Shipper package it is cleaned, put through
quality assurance testing, and returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Strategic Logistics
Alliances</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have sought to establish
strategic alliances as a method of marketing our solutions providing minus 150&deg; C shipping conditions to the life sciences
industry. We have focused our efforts on leading companies in the logistics services industry as well as participants in the life
sciences industry. In connection with our alliances with providers of shipping services, we refer to their offerings as &ldquo;<I>powered
by Cryoport</I><SUP>SM</SUP>&rdquo; to reflect our solutions being integrated into our alliance partner&rsquo;s services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>FedEx.</B> In January
2013, we entered into a master agreement with Federal Express Corporation (&ldquo;FedEx&rdquo;) (the &ldquo;FedEx Agreement&rdquo;)
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal<SUP>TM</SUP>
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days&rsquo; notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport&rsquo;s services for frozen temperature-controlled cold chain transportation
as its FedEx<SUP>&reg;</SUP> Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx&rsquo;s
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal<SUP>TM</SUP> software
platform, which is &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>DHL.</B> In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding (&ldquo;DHL&rdquo;). This relationship with
DHL is a further implementation of the Company&rsquo;s expansion of distribution partnerships under the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo;
model described above, allowing us to expand our sales and marketing reach through our partners and build awareness of the benefits
of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold chain logistics offerings to its life
sciences and healthcare customers with Cryoport&rsquo;s validated cryogenic solutions. DHL added 15 additional certified Life Sciences
stations in the second quarter of 2014 bringing the Thermonet network to 60 stations in operation. Over the course of rolling out
our new relationship, this expanded network will offer Cryoport&rsquo;s cryogenic solutions under the DHL brands as &ldquo;<I>powered
by Cryoport<SUP>SM</SUP></I>&rdquo;. In addition, DHL&rsquo;s customers will be able to have direct access to our cloud-based order
entry and tracking portal to order Cryoport Express<SUP>&reg;</SUP> Solutions and receive preferred DHL shipping rates and discounts.
Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>, is integrated with DHL&rsquo;s tracking and
billing systems to provide DHL life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>UPS.</B> In October
2014, we added United Parcel Services, Inc. (&ldquo;UPS&rdquo;) as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company&rsquo;s
expansion of distributors under the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Over the course of rolling
out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal to
order Cryoport Express<SUP>&reg;</SUP> Solutions and gain access to UPS&rsquo;s broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>,
is integrated with UPS&rsquo;s tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">These agreements
the three largest integrators in the world represent a significant validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Life Sciences Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Zoetis.</B> In December&nbsp;2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal<SUP>TM</SUP> to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis&rsquo; total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport&rsquo;s scope to manage all logistics
of Zoetis&rsquo; key frozen poultry vaccine to all Zoetis&rsquo; international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport&rsquo;s role to include the logistics management
for a second poultry vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Liventa Biosciences.</B>
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express<SUP>&reg;</SUP> Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport&rsquo;s proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa&rsquo;s distribution capability to orthopedic care providers.
The implementation of Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express<SUP>&reg;</SUP>
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In summary, we serve the
life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Companies or institutions
such as therapy developers for personalized medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic
laboratories, contract manufacturers, cord blood repositories, vaccine manufacturers, animal husbandry related companies, in-vitro
fertilization clinics, and other organizations handling commodities requiring reliable cryogenic logistics solutions are amongst
our clients. These companies usually operate within heavily regulated environments and as such, changing vendors and distribution
practices typically require a number of steps, which may include the audit of our facilities, review of our procedures, qualifying
us as a vendor, and performing test shipments. This process can take three to nine months or longer to complete prior to a potential
customer adopting one or more of our Cryoport Express<SUP>&reg;</SUP> Solutions.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Going Concern</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As reported in the Report
of Independent Registered Public Accounting Firm to our March&nbsp;31, 2014 and 2013 consolidated financial statements, we have
incurred recurring losses and negative cash flows from operations since inception. These factors, among others, raise substantial
doubt about our ability to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express<SUP>&reg;</SUP>
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at March 31, 2014, and funds currently being raised through a preferred stock offering together
with the revenues generated from our services will be sufficient to sustain our planned operations into the second quarter of fiscal
year 2015; however, we must obtain additional capital to fund operations thereafter and for the achievement of sustained profitable
operations. These factors raise substantial doubt about our ability to continue as a going concern. We are currently working on
funding alternatives in order to secure sufficient operating capital to allow us to continue to operate as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express<SUP>&reg;</SUP> Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis on acceptable terms or at all. Management&rsquo;s inability to successfully achieve significant
revenue increases or its cost reduction strategies or to complete any other financing will adversely impact our ability to continue
as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts to become
a self-sustaining financially viable entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">At December 31, 2014,
we had an accumulated deficit of $93.9 million. During the nine months ended December&nbsp;31, 2014, we used cash in operations
of $2.8 million and had a net loss of $5.1 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While we increased revenues
year-over-year by 142% to $2.7 million for the fiscal year ended March 31, 2014, our revenues are still significantly lower than
our operating expenses during the year and we have no assurance of the level of future revenues. We incurred a net loss of $19.6
million and used cash of $4.4 million in our operating activities during the year ended March&nbsp;31, 2014. We had negative working
capital of $2.9 million, and had cash and cash equivalents of $369,600 at March&nbsp;31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-weight: normal">We
have funded our operations through a preferred stock offering and secured promissory notes (see Note 5 and Note 8 in the accompanying
December 31, 2014 condensed consolidated financial statements) and plan to raise additional funds through additional debt or equity
offerings to cover general working capital needs and sales and marketing initiatives to expand our customer base and increase sales.
There is no assurance that funds can be secured or if these funds would allow us to continue our operations until more significant
revenues can be generated or more funding can be secured. These matters raise substantial doubt about our ability to continue as
a going concern.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Results of Operations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B><I>Nine months ended
December 31, 2014 compared to nine months ended December 31, 2013:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table summarizes
certain information derived from our condensed consolidated statements of operations:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months&nbsp;Ended<BR> December&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$ Change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">% Change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">($ in 000&rsquo;s)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,737</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,825</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">912</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">50.0</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,938</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,531</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(407</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">26.6</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Gross margin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">294</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">505</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171.9</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,431</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,768</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(663</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(268</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(330</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18.8</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,714</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,714</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100.0</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,185</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(627</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(558</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89.1</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Change in fair value of derivatives</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(100.0</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100.0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(5,090</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(18,124</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">13,034</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(71.9</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Revenues</I>.</B>
We generated revenues from customers in all of our target life sciences markets, such as biotech and diagnostic companies, pharmaceutical
companies, central laboratories, contract research organizations, the reproductive medicine market, and research institutions.
Revenues increased $911,700 or 50.0% for the nine months ended December&nbsp;31, 2014, as compared to the nine months ended December
31, 2013. This increase is primarily driven by an overall increase in the number of customers utilizing our services and frequency
of shipments compared to the prior year, an increase in revenues in the reproductive medicine market and the ramp up and expansion
of logistics services provided to Zoetis. Revenues in the reproductive medicine market increased by 82% over the prior period to
$691,400 for the nine months ended December 31, 2014, driven by continued success of our telemarketing activities and email and
other targeted marketing campaigns and an increased awareness of our cryogenic logistics solutions in this market. Our revenues
from Zoetis were $685,000 for the nine months ended December 31, 2014, representing a 21% increase over the prior year period.
This is reflective of the expansion of our services, both domestically and globally, provided to Zoetis for a primary poultry vaccine,
and the addition of logistics management for a second vaccine that was introduced to the market during the fourth calendar quarter
of 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Gross margin and
cost of revenues.</I></B> Gross margin for the nine months ended December 31, 2014 was 29.2% of revenues, as compared to 16.1%
of revenues for the nine months ended December 31, 2013. The increase in gross margin is primarily due to the increase in revenues
combined with a reduction in freight as a percentage of revenues and a decrease of fixed manufacturing costs. Cost of revenues
for the nine months ended December 31, 2014 was 70.8% of revenues, as compared to 83.9% of revenues for the nine months ended December
31, 2013. Our cost of revenues are primarily comprised of freight charges, payroll and related expenses related to our operations
center in California, third-party charges for our European and Asian operations centers in Holland and Singapore, depreciation
expenses of our Cryoport Express<SUP>&reg;</SUP> Shippers and supplies and consumables used for our solutions. The increase in
cost of revenues is primarily due to freight charges from the growth in shipments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Selling, general
and administrative expenses</I>.</B> Selling, general and administrative expenses increased $663,200 for the nine months ended
December 31, 2014 or 17.6% as compared to the nine months ended December 31, 2013. The increase is primarily due to salaries and
recruiting fees incurred to expand our sales force, the engagement of an investor relations firm and related activities, equity
based compensation charges, public company related expenses including legal, SOX and financial reporting expenses, and banking
charges as a result of the higher business volume.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Research and development
expenses</I>.</B> Research and development expenses decreased $62,000 or 18.8% for the nine months ended December 31, 2014, as
compared to the nine months ended December 31, 2013. Our research and development efforts are focused on continually improving
the features of the Cryoport Express<SUP>&reg;</SUP> Solutions including the Company&rsquo;s cloud-based logistics management platform,
the Cryoportal<SUP>TM</SUP>, the Cryoport Express<SUP>&reg;</SUP>&nbsp;Shippers and development of new packaging solutions and
additional accessories to facilitate the efficient shipment of life science commodities using our solution. We use an outside software
development company and other third parties to provide some of these services. Research and development expenses to date have consisted
primarily of costs associated with continually improving the features of our Cryoport Express<FONT STYLE="font-size: 10pt"><SUP>&reg;</SUP></FONT>
Solution including the web based customer service portal and the Cryoport Express<FONT STYLE="font-size: 10pt"><SUP>&reg;</SUP></FONT>
Shippers. Further, these efforts are expected to lead to the introduction of shippers of varying sizes based on market requirements,
constructed of lower cost materials and utilizing high volume manufacturing methods that will make it practical to provide the
cryogenic packages offered by our Cryoport Express<FONT STYLE="font-size: 10pt"><SUP>&reg;</SUP></FONT> Solution. Other research
and development effort has been directed toward improvements to the liquid nitrogen retention system to render it more reliable
in the general shipping environment and to the design of the outer packaging. Alternative phase change materials in place of liquid
nitrogen may be used to increase the potential markets these shippers can serve such as ambient and 2&deg;- 8&deg;C markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Debt conversion
expense</I></B>. Debt conversion expense for the nine months ended December 31, 2013 of $13.7 million was related to the induced
conversion of $4.1 million of aggregate principal and interest from the bridge notes into shares of common stock and warrants.
Debt conversion expense represents the fair value of the securities transferred in excess of the fair value of the securities issuable
upon the original conversion terms of the bridge notes. The Company calculated the fair value of the common stock issued by using
the closing price of the stock on the date of issuance. The fair value of the warrants was calculated using Black-Scholes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Interest expense</I>.</B>
Interest expense increased $558,600 for the nine months ended December 31, 2014, as compared to the nine months ended December
31, 2013. Interest expense for the nine months ended December 31, 2014 included amortization of the debt discount and deferred
financing fees of approximately $1.1 million, of which $826,900 related to the fair value of the beneficial conversion feature
of the 5% Bridge Notes that was triggered by the convertible preferred stock offering, interest expense on our 5% Bridge Notes
of approximately $10,600, accrued interest on our related party notes payable of approximately $23,600, amortization of the debt
discount on the 7% Bridge Notes of $38,100 and related interest expense of $3,000. Interest expense for the nine months ended December
31, 2013 included accrued interest on our related party notes payable of approximately $27,900, amortization of the debt discount
and deferred financing fees of approximately $540,600 and interest expense on our bridge notes of approximately $58,600.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Change in fair value
of derivatives</I>.</B> The warrants classified as derivative liabilities expired in April 2014. The gain on the change in fair
value of derivative liabilities was $20,800 for the nine months ended December 31, 2013 as a result of a decrease in the value
of our warrant derivatives, due primarily to a decrease in our stock price.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B><I>Results of Operations
for Fiscal 2014 Compared to Fiscal 2013</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table summarizes
certain information derived from our consolidated statements of operations:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">$ Change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">% Change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">($ in 000&rsquo;s)</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: -26.1pt; padding-left: 26.1pt">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,660</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,101</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,559</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">141.7</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,223</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,588</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(635</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">40.0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Gross margin (loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(487</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">924</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">189.7</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,106</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,412</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">306</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5.6</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(409</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(425</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3.8</TD><TD STYLE="text-align: left">)%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,714</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,714</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(784</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(712</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">976.6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Change in fair value of derivatives</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(19,565</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,382</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(13,183</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">206.6</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Revenues</I>. </B>We
generated revenues from customers in all of our target life sciences markets, such as biotech and diagnostic companies, pharmaceutical
companies, central laboratories, contract research organizations, the reproductive medicine market/in vitro fertilization market,
and research institutions. Net revenues were $2.7 million for the year ended March 31, 2014, as compared to $1.1 million for the
year ended March 31, 2013. This $1.6 million or 142% increase is primarily driven by the ramp up and expansion of logistics services
provided to Zoetis, an increase in revenues in the reproductive medicine/in vitro fertilization market and an overall increase
in both the number of customers utilizing our services and frequency of shipments compared to the prior year. Our revenues from
Zoetis increased to $820,600 for the year ended March 31, 2014 from $62,300 during the prior year. This reflects the successful
implementation and expansion of our integrated model with Zoetis, which commenced in February of 2013, whereby we manage the cryogenic
shipments of a certain vaccine, both domestically and globally, and in October of 2013 expanded our services to include the logistics
management for a second vaccine. The increase in revenues in the reproductive medicine/in vitro fertilization market was particularly
strong, with revenues increasing from $238,000 to $614,000, an increase of $376,000 or 158%. This is partially the result of targeted
telemarketing activities and email marketing campaigns to broaden the awareness of our solution in this space.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Gross margin and
cost of revenues</I></B>. Gross margin for the year ended March&nbsp;31, 2014 was 16.4% of revenues, as compared to a gross loss
of 44.3% of revenues for the prior year. The increase in gross margin is primarily due to the increase in net revenues combined
with a reduction in freight as a percentage of revenues and a decrease of fixed manufacturing costs. Cost of revenues for the year
ended March&nbsp;31, 2014 was 83.6% of revenues, as compared to 144.3% of revenues for the prior year. Our cost of revenues are
primarily comprised of freight charges, payroll and related expenses related to our operations center in California, third-party
charges for our European and Asian operations centers in Holland and Singapore, depreciation expenses of our Cryoport Express<SUP>&reg;</SUP>
Shippers and supplies and consumables used for our solutions. The increase in cost of revenues is primarily due to freight charges
from the growth in shipments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Selling, general
and administrative expenses</I></B>. Selling, general and administrative expenses decreased $306,000, or 5.6% for the year ended
March&nbsp;31, 2014 as compared to the prior year. This decrease is primarily related to a severance payment of approximately $180,000
paid to the former Chief Executive Officer in April 2012 and a decrease in board of director stock-based compensation. Partially
offsetting these decreases is an increase in compensation related to replacement of the Chief Executive Officer and an increase
in expenses related to sales and marketing activities compared to previous year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Research and development
expenses</I></B>. Research and development expenses decreased $16,000 or 3.8% for the year ended March&nbsp;31, 2014, as compared
to the prior year. Our research and development efforts are focused on continually improving the features of the Cryoport Express<SUP>&reg;</SUP>
Solutions including the Company&rsquo;s cloud-based logistics management platform, the Cryoportal<SUP>TM</SUP>, the Cryoport Express<SUP>&reg;</SUP>&nbsp;Shippers
and development of additional accessories to facilitate the efficient shipment of life science commodities using our solution.
We use an outside software development company and other third parties to provide some of these services. Research and development
expenses to date have consisted primarily of costs associated with continually improving the features of the Cryoport Express<SUP>&reg;</SUP>
Solution including the web based customer service portal and the Cryoport Express<SUP>&reg;</SUP> Shippers. Further, these efforts
are expected to lead to the introduction of shippers of varying sizes based on market requirements, constructed of lower cost materials
and utilizing high volume manufacturing methods that will make it practical to provide the cryogenic packages offered by the Cryoport
Express<SUP>&reg;</SUP> Solution. Other research and development effort has been directed toward improvements to the liquid nitrogen
retention system to render it more reliable in the general shipping environment and to the design of the outer packaging. Alternative
phase change materials in place of liquid nitrogen may be used to increase the potential markets these shippers can serve such
as ambient and 2&deg;- 8&deg;C markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Debt conversion
expense. </I></B>Debt conversion expense for the year ended March 31, 2014 of&nbsp;$13.7 million was related to the induced conversion
of $4.1 million of aggregate principal and accrued interest from the convertible bridge notes&nbsp;into shares of common stock
and warrants. Debt conversion expense represents the fair value of the securities transferred in excess of the fair value of the
securities issuable upon the original conversion terms of the bridge notes.&nbsp; The Company calculated the fair value of the
common stock issued by using the closing price of the stock on the date of issuance.&nbsp; The fair value of the warrants was calculated
using the Black-Scholes option pricing model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Interest expense</I></B>.
Interest expense increased $712,000 for the year ended March&nbsp;31, 2014, as compared to the prior year. Interest expense for
the year ended March 31, 2014 included amortization of the debt discount and deferred financing fees of approximately $678,900,
interest expense on our bridge notes of approximately $71,600, and accrued interest on our related party notes payable of approximately
$36,500. Interest expense for the year ended March 31, 2013 included amortization of the debt discount of approximately $17,500,
interest expense on our convertible debentures of approximately $9,900, and accrued interest on our related party notes payable
of approximately $42,200.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Change in fair value
of derivatives</I></B>. The gain for the year ended March 31, 2014 was the result of a decrease in the value of our warrant derivatives,
due primarily to a decrease in our stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B><I>Other expense, net</I></B>.
The other expense, net for the year ended March&nbsp;31, 2014 is primarily due to administrative charges and foreign exchange losses
on accounts receivable and payable invoices.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Liquidity and Capital
Resources</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of December 31, 2014,
the Company had cash and cash equivalents of $773,900 and&nbsp;negative working capital of $1.6 million. Historically, we have
financed our operations primarily through sales of our debt and equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">For the nine months ended
December 31, 2014, we used $2.8 million of cash for operations primarily as a result of the net loss of $5.1 million offset by
non-cash expenses of $1.9 million primarily comprised of amortization of debt discount and deferred financing costs, stock-based
compensation expense, and depreciation and amortization. Also contributing to the cash impact of our net operating loss (excluding
non-cash items) was an increase in accounts payable and accruals of $317,600 and a reduction in accounts receivable of $107,900
due to improved collections. Net cash used in investing activities of $67,900 during the nine months ended December 31, 2014 was
due to the purchase of the recently introduced Cryoport Express<SUP>&reg;</SUP> CXVC1 Shippers (holding up to fifteen hundred 2.0
ml vials).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Net cash provided by financing
activities totaled $3.3 million during the nine months ended December 31, 2014, and resulted from net proceeds from the issuance
of convertible preferred stock of $2.8 million, proceeds from the exercise of stock options and warrants of $11,600 and proceeds
of $615,000 from notes payable, partially offset by the repayment of convertible debentures of $50,000 and the repayment of related
party notes of $72,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As discussed in Note&nbsp;2
of the accompanying condensed consolidated financial statements, there exists substantial doubt regarding the Company&rsquo;s ability
to continue as a going concern. The Company received gross proceeds of $3.4 million (approximately $2.8 million after offering
costs) in exchange for the issuance of 279,280 shares of convertible preferred stock in the first three quarters of fiscal 2015
which is further described in Note 8 in the accompanying condensed consolidated financial statements and proceeds of $865,000 from
the 7% Bridge Notes (see Notes 5 and 10 in the accompanying condensed consolidated financial statements). The funds raised are
being used for working capital purposes and to continue our sales efforts to advance the Company&rsquo;s commercialization of the
Cryoport Express<SUP>&reg;</SUP> Solutions. However, the Company&rsquo;s management recognizes that the Company will need to obtain
additional capital to fund its operations until sustained profitable operations are achieved. Management is currently working on
such funding alternatives in order to secure sufficient operating capital through the end of fiscal year 2015. In addition, management
will continue to review its operations for further cost reductions to extend the time that the Company can operate with its current
cash on hand and additional bridge financing and to utilize third parties for services such as its international recycling and
refurbishment centers to provide for greater flexibility in aligning operational expenses with the changes in sales volumes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Additional funding plans
may include obtaining additional capital through equity and/or debt funding sources; however, no assurance can be given that additional
capital, if needed, will be available when required or upon terms acceptable to the Company.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Off-Balance Sheet
Arrangements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We do not have any off
balance sheet arrangements within the meaning of Item&nbsp;303(a)(4) of Regulation S-K.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Contractual Obligations</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table summarizes
our contractual obligations as of December 31, 2014, and the effects such obligations are expected to have on liquidity and cash
flow in future periods ($ in &lsquo;000&rsquo;s):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 92%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Total</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Less&nbsp;than</b></font><br>
<font style="font-size: 10pt"><b>1&nbsp;Year</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>1-3&nbsp;Years</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>4-5&nbsp;Years</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>After</b></font><br>
<font style="font-size: 10pt"><b>5&nbsp;Years</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 35%; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt"><b>Contractual obligations</b></font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">Operating lease obligations<sup>(1)</sup></font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">56</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">56</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">Notes payable<sup>(2)</sup></font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">615</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">615</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: white">
    <td style="padding-bottom: 1pt; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">Other obligations <sup>(3)</sup></font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right; text-indent: 0in"><font style="font-size: 10pt">1,310</font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right; text-indent: 0in"><font style="font-size: 10pt">1,310</font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-bottom: 2.5pt; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">Total</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 2.25pt double; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; text-indent: 0in"><font style="font-size: 10pt">1,981</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 2.25pt double; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; text-indent: 0in"><font style="font-size: 10pt">1,981</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 2.25pt double; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 2.25pt double; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 2.25pt double; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <td style="border-bottom: black 2.25pt double; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <td style="padding-bottom: 2.5pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.5pt; text-align: justify; text-indent: -24.5pt">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.5pt; text-align: justify; text-indent: -24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.5pt; text-align: justify; text-indent: -24.5pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt">(1)</TD><TD STYLE="text-align: justify">The operating lease obligations are primarily related to the facility lease for our principal executive
office in Lake Forest, California expiring June&nbsp;30, 2015.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt">(2)</TD><TD STYLE="text-align: justify">Notes payable represent secured convertible promissory notes and accrued interest at 7% per annum
which were issued in December 2014 to certain accredited investors pursuant to the terms of subscription agreements and letters
of investment intent. All principal and accrued interest is due July 1, 2015. However, the Company may elect to extend the maturity
date to January 1, 2016.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">(3)</TD><TD STYLE="text-align: justify">Other obligations represent outstanding unsecured
indebtedness and accrued interest owed to four related parties which bear interest at the rate of 6% per annum. The unpaid principal
and accrued interest was due at maturity on various dates through March 1, 2015. In March 2015, the Company entered into definitive
agreements to exchange or amend the unpaid principal and interest which are due at various dates through May 1, 2016.</TD>
</TR></TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Impact of
Inflation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">From time to time, Cryoport
experiences price increases from third party manufacturers and these increases cannot always be passed on to Cryoport&rsquo;s customers.
While these price increases have not had a material impact on Cryoport&rsquo;s historical operations or profitability in the past,
they could affect revenues in the future.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B>Critical Accounting
Policies and Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Management&rsquo;s discussion
and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this prospectus, are
based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted
in the U.S. (&ldquo;U.S. GAAP&rdquo;) Our significant accounting policies are described in the notes to the audited consolidated
financial statements contained elsewhere in this prospectus. Included within these policies are our &ldquo;critical accounting
policies.&rdquo; Critical accounting policies are those policies that are most important to the preparation of our consolidated
financial statements and require management&rsquo;s most subjective and complex judgment due to the need to make estimates about
matters that are inherently uncertain. Although we believe that our estimates and assumptions are reasonable, actual results may
differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact
on our results of operations and/or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe that the critical
accounting policies that most impact the consolidated financial statements are as described below.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Basis of Presentation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The accompanying consolidated
financial statements have been prepared in accordance with U.S. GAAP.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Principles
of Consolidation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The consolidated financial
statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany accounts
and transactions have been eliminated.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Use of Estimates</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts. The Company&rsquo;s
significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance for inventory obsolescence,
deferred taxes and their accompanying valuations, valuation of derivative liabilities and valuation of common stock, warrants and
stock options issued for products or services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Fair Value
of Financial Instruments</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s financial
instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible notes payable,
accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value at March&nbsp;31, 2014
and 2013 due to their short-term nature. The difference between the fair value and recorded values of the related party notes payable
is not significant.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Cash and Cash
Equivalents</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Concentrations
of Credit Risk</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company maintains
its cash accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation
(&ldquo;FDIC&rdquo;) with basic deposit insurance coverage limits up to $250,000 per owner. At March&nbsp;31, 2014 and 2013, the
Company had cash balances of approximately $159,000 and $214,000, respectively. The Company performs ongoing evaluations of these
institutions to limit its concentration risk exposure.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Customers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company grants credit
to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues from
international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company&rsquo;s ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at March&nbsp;31, 2014 and 2013 are net of reserves for doubtful accounts of $24,600 and $8,700,
respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The majority of the Company&rsquo;s
customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration of accounts
receivable within these industries, which is subject to normal credit risk. At March 31, 2014, there was one customer that accounted
for 30.6% of net accounts receivable. No other single customer owed us more than 10% of net accounts receivable at March 31, 2014
and 2013. The Company maintains reserves for bad debt and such losses, in the aggregate, historically have not exceeded our estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During fiscal years 2014 and 2013, the Company
had revenues from foreign customers of approximately $434,000 and $161,000, respectively, which constituted approximately 16.3%
and 14.6% of total revenues, respectively. For the fiscal year ended March&nbsp;31, 2014, there was one customer that accounted
for 30.8% of net revenues. No other single customer generated over 10% of net revenues during 2014 and 2013.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Inventories</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s inventories
consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned to the Company
with the containers at the culmination of the customer&rsquo;s shipping cycle. Inventories are stated at the lower of cost or current
estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire method.
Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of its inventories
to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs of inventories
are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and finished goods
include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level of inventories
considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories at its
net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic conditions,
customer demand, competition or other relevant factors differ from expectations. These estimates require us to make assessments
about future demand for the Company&rsquo;s products in order to categorize the status of such inventories items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company&rsquo;s forecasts of market conditions,
industry trends, competition and other factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Property and
Equipment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements are similar
to the accounting standard for leases since they convey the right to use the container over a period of time. The Company retains
the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer&rsquo;s shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Property and equipment
are recorded at cost. Cryogenic shippers, which comprise of 89% and 87% of the Company&rsquo;s net property and equipment balance
at March&nbsp;31, 2014 and 2013, respectively, are depreciated using the straight-line method over their estimated useful lives
of three years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally
three to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of
the asset or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful
life of the assets or term of the lease, whichever is shorter and included in depreciation expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Intangible
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Intangible assets are
comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and trademarks,
which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes certain
costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Long-lived
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets&rsquo; carrying value, and accordingly, we have not recognized any impairment losses through March&nbsp;31, 2014.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Deferred Financing
Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Deferred financing costs
represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred
financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with the
5% bridge notes, during the third and fourth quarter of fiscal 2014, the Company incurred financing costs that have been capitalized
and are being amortized over the term of the convertible bridge notes payable using the straight-line method which approximates
the effective interest method.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Convertible
Debentures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature (&ldquo;BCF&rdquo;). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Derivative
Liabilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Certain of the Company&rsquo;s
issued and outstanding common stock purchase warrants which have exercise price reset features are treated as derivatives for accounting
purposes. The common stock purchase warrants were not issued with the intent of effectively hedging any future cash flow, fair
value of any asset, liability or any net investment in a foreign operation. The warrants do not qualify for hedge accounting, and
as such, all future changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants
are exercised, expire or the related rights have been waived. These common stock purchase warrants do not trade in an active securities
market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model (&ldquo;Black-Scholes&rdquo;).</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Income Taxes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company accounts for
income taxes under the provision of the Financial Accounting Standards Board (&ldquo;FASB&rdquo;) Accounting Standards Codification
(&ldquo;ASC&rdquo;) 740, <I>Income Taxes</I>, or ASC 740. As of March 31, 2014 and 2013, there were no unrecognized tax benefits
included in the accompanying consolidated balance sheets that would, if recognized, affect the effective tax rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight of available
evidence, the Company&rsquo;s management has determined that it is more likely than not that the net deferred tax assets will not
be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company&rsquo;s
income tax provision consists of state minimum taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s policy
is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest
or penalties on its consolidated balance sheets at March&nbsp;31, 2014 and 2013, respectively and has not recognized interest and/or
penalties in the consolidated statement of operations for the years ended March&nbsp;31, 2014 and 2013. The Company is subject
to taxation in the U.S. and various state jurisdictions. As of March&nbsp;31, 2014, the Company is no longer subject to U.S. federal
examinations for years before 2010 and for California franchise and income tax examinations for years before 2009. However, to
the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses were generated
and carried forward, and make adjustments up to the amount of the net operating loss carry forward amount. The Company is not currently
under examination by U.S. federal or state jurisdictions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Revenue Recognition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements are similar
to the accounting standard for leases since they convey the right to use the containers over a period of time. The Company retains
title to the containers and provides its customers the use of the container for a specified shipping cycle. At the culmination
of the customer&rsquo;s shipping cycle, the container is returned to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the enclosed materials, and at
the time that collectability is reasonably certain. Revenue is based on gross net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel. Revenue is recognized for these
services as services are rendered and at the time that collectability is reasonably certain.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Accounting
for Shipping and Handling Revenue, Fees and Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying consolidated statements of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Research and
Development Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Expenditures relating
to research and development are expensed in the period incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Stock-based
Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company accounts for
stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all stock-based
payments to employees and directors, including grants of employee stock options and warrants, to be recognized based upon their
fair values. The fair value of stock-based awards is estimated at grant date using Black-Scholes and the portion that is ultimately
expected to vest is recognized as compensation cost over the requisite service period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since stock-based compensation
is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate
to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods
if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in which the
change in estimate occurs. The estimated forfeiture rates at March&nbsp;31, 2014 and 2013 were zero as the Company had not had
a significant history of forfeitures and does not expect significant forfeitures in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cash flows from the tax
benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company&rsquo;s loss position, there were no such tax benefits during years ended March&nbsp;31,
2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company&rsquo;s
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Issuances of the Company&rsquo;s
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i)&nbsp;the date at which a commitment for performance to earn
the equity instruments is reached (a &ldquo;performance commitment&rdquo; which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii)&nbsp;the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Basic and
Diluted Net Income (Loss) Per Share</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We calculate basic and
diluted net income (loss) per share using the weighted average number of common shares outstanding during the periods presented,
and adjust the amount of net income (loss) used in this calculation for preferred stock dividends (if any) declared during the
period. In periods of a net loss position, basic and diluted weighted average shares are the same. For the diluted earnings per
share calculation, we adjust the weighted average number of common shares outstanding to include dilutive stock options, warrants
and other common stock equivalents outstanding during the periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following shows the
amounts used in computing net loss per share for each of the years ended March 31, 2014 and 2013 after giving effect to the proposed
8-to-1 reverse stock split:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(19,565,426</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(6,382,433</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Less:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in; padding-left: 0.25in">Preferred dividends paid in cash or stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Loss attributable to Cryoport stockholders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,565,426</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,382,433</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Weighted average shares issued and outstanding</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6,106,315</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,720,079</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Basic and diluted net loss per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1.35</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been anti-dilutive:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Stock options</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">432,290</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">51,471</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">402,716</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">835,006</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51,471</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Segment Reporting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently operate in
one reportable segment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Fair Value Measurements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;1:</I>&nbsp;Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level&nbsp;1 inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;2:</I>&nbsp;Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;3:</I>&nbsp;Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level&nbsp;3
inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In determining fair value,
we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible, as well as consider counterparty credit risk in the assessment of fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We did not elect the fair
value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value. Therefore,
material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and payable, are
reported at their historical carrying values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The carrying values of
our assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014 and 2013 are
classified in the table below in one of the three categories of the fair value hierarchy described below. We have no assets or
liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 92%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in; padding-left: 0">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="14" STYLE="border-bottom: black 1pt solid; padding-left: 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Fair Value Measurements</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in; padding-left: 0">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-left: 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Level 1</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-left: 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Level 2</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-left: 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Level&nbsp;3</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; padding-left: 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Total</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in; padding-left: 0"><font style="font-size: 10pt"><b>March 31, 2013</b></font></td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0"><font style="font-size: 10pt">Liabilities:</font></td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: right; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0.25in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Derivative liabilities</font></td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: right; text-indent: 0in"><font style="font-size: 10pt">20,848</font></td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="border-bottom: black 2.25pt double; padding-left: 0; text-align: right; text-indent: 0in"><font style="font-size: 10pt">20,848</font></td>
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 0; text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 22.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following summarizes
the activity of Level&nbsp;3 inputs measured on a recurring basis for the years ended March&nbsp;31, 2014 and 2013:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair&nbsp;Value&nbsp;Measurements&nbsp;of&nbsp;&nbsp;<BR> Unobservable&nbsp;Inputs&nbsp;(Level&nbsp;3)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 77%; text-align: left; text-indent: -12pt; padding-left: 12pt">Balance at March 31, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 20%; text-align: right">37,334</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Transfers in / (out) of Level&nbsp;3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -12pt; padding-left: 0.5in">Adjustments resulting from a change in fair value of derivative liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Balance at March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,848</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Transfers in / (out) of Level&nbsp;3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -12pt; padding-left: 0.5in">Adjustments resulting from a change in fair value of derivative liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(20,848</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -12pt; padding-left: 12pt">Balance at March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The fair value of derivative
liabilities were measured on their respective origination dates and at the end of each reporting period using Level&nbsp;3 inputs.
The significant assumptions we use in the calculations under Black-Scholes as of March 31, 2014 and 2013 included an expected term
based on the remaining contractual life of the warrants, a risk-free interest rate based upon observed interest rates appropriate
for the expected term of the instruments, volatility based on the historical volatility of our common stock, and a zero dividend
rate based on our past, current and expected practices of granting dividends on common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Foreign Currency Translation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We record foreign currency
transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included in results
of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Recent Accounting Pronouncements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In August 2014, the FASB
issued ASU 2014-15, &ldquo;Presentation of Financial Statements-Going Concern&rdquo;. Currently, there is no guidance in U.S. GAAP
about management&rsquo;s responsibility to evaluate whether there is substantial doubt about an entity&rsquo;s ability to continue
as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity&rsquo;s ability
to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.
Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting
period including interim periods, (3) provide principles for considering the mitigating effect of management&rsquo;s plans, (4)
require certain disclosures when substantial doubt is alleviated as a result of consideration of management&rsquo;s plans, (5)
require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for
a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this
ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. Management is
currently assessing the impact the adoption of ASU 2014-15 will have on our consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In May 2014, the FASB
issued ASU No. 2014-09, &ldquo;Revenue from Contracts with Customers&rdquo;. ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, &ldquo;Revenue Recognition&rdquo;. The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our consolidated financial statements.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_009"></A>BUSINESS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Overview</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We provide cryogenic logistics
solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology and
specialized cold chain logistics knowhow. We view our solutions as disruptive to the &ldquo;older technologies&rdquo; of dry ice
and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client&rsquo;s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;</SUP>
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal&trade;. The Cryoportal&trade;
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal&trade; records
and retains a fully documented &ldquo;chain-of-custody&rdquo; and, at the client&rsquo;s option, &ldquo;chain-of-condition&rdquo;
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The branded packaging
for our Cryoport Express<SUP>&reg;</SUP> Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express<SUP>&reg;</SUP>
Shippers. The Cryoport Express<SUP>&reg;</SUP> Shippers<SUP> </SUP>are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of &ldquo;dry vapor&rdquo; liquid nitrogen
(&ldquo;LN2&rdquo;) technology. Cryoport Express<SUP>&reg;</SUP> Shippers are International Air Transport Association (&ldquo;IATA&rdquo;)
certified and validated to maintain stable temperatures of minus 150&deg; C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express<SUP>&reg;</SUP> Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express<SUP>&reg;</SUP> CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our most used solution
is the &ldquo;turnkey&rdquo; solution, which can be accessed directly through our cloud-based Cryoportal&trade; or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express<SUP>&reg;</SUP>
Shipper to the client <FONT STYLE="color: #1A1A1A">who conveniently loads its frozen commodity into the inner chamber of the </FONT>Cryoport
Express<SUP>&reg;</SUP> Shipper<FONT STYLE="color: #1A1A1A">.&nbsp; The customer then closes the shipper package and reseals the
shipping box displaying the next recipient&rsquo;s address (&ldquo;Flap A&rdquo;) for pre-arranged carrier pick up.&nbsp; </FONT>Cryoport
arranges for the pick-up of the parcel by a shipping service provider, which is designated by the client or chosen by Cryoport,
for delivery to the client&rsquo;s intended recipient.&nbsp; The recipient simply opens the shipper package and removes the frozen
commodity that has been shipped.&nbsp; The recipient then reseals the package, displaying the nearest Cryoport Operations Center
address (&ldquo;Flap B&rdquo;), making it ready for pre-arranged carrier pick-up. The When the Cryoport Operations Center receives
the Cryoport Express<SUP>&reg;</SUP> Shipper, it is cleaned, put through quality assurance testing, and returned to inventory for
reuse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard &ldquo;Turn-key Solution,&rdquo; described above, we also provide the following
customer facing, value-added solutions to address our various clients&rsquo; needs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer
Staged Solution</I></B>,&rdquo; designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express<SUP>&reg; </SUP>Shippers to our customer, in an uncharged state, enabling our customer (after
training/certification) to charge them with liquid nitrogen and use our Cryoportal&trade; to enter orders with shipping and delivery
service providers for the transportation of the package. Once the order is released, our customer services professionals monitor
the shipment and the return of the shipper to us for cleaning, quality assurance testing and reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Customer
Managed Solution</I></B>,&rdquo; a limited customer implemented solution whereby we supply our Cryoport Express<SUP>&reg;</SUP>
Shippers to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of
the shipping and delivery service provider and the return of the shipper to us. .</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>powered
by Cryoport</I></B><SUP>SM</SUP>,&rdquo; available to providers of shipping and delivery services who seek to offer a &ldquo;branded&rdquo;
cryogenic logistics solution as part of their service offerings, with &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; appearing
prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements,
such as minimum required shipping volumes.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Integrated
Solution,</I></B>&rdquo;<I> </I>which is our outsource solution. It is our most comprehensive solution and involves our management
of the entire cryogenic logistics process for our client, including Cryoport employees at the client&rsquo;s site to manage the
client&rsquo;s cryogenic logistics function in total.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Regenerative
Medicine Point-of-Care Repository Solution,</I></B>&rdquo; designed for allogeneic therapies. In this model we supply our Cryoport
Express<SUP>&reg;</SUP> Shipper to ship and store cryogenically preserved life science products for up to 6 days (or longer periods
with supplementary shippers) at a point-of-care site, with the Cryoport Express<SUP>&reg;</SUP> Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service
professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport
Operations Center receives the Cryoport Express<SUP>&reg; </SUP>Shipper package it is cleaned, put through quality assurance testing,
and returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>


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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Personalized
Medicine and Cell-based Immunotherapy Solution,</I></B>&rdquo; designed for autologous therapies. In this model our Cryoport Express<SUP>&reg;
</SUP>Shipper serves as an enabling technology for the safe transportation of manufactured autologous cellular-based immunotherapy
market by providing a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the
collection of the patient&rsquo;s cells in a hospital setting, to (b) a central processing facility where they are manufactured
into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care
treatment facility.&nbsp; If required, the Cryoport Express<SUP>&reg;</SUP> Shipper can then serve as a temporary freezer/repository
to allow the efficient distribution of this personalized medicine to the patient when and where the medical provider needs it
most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer services
professionals monitor each shipment throughout the predetermined process, including the return of the shipper to us. When the
Cryoport Operations Center receives the Cryoport Express<SUP>&reg; </SUP>Shipper package it is cleaned, put through quality assurance
testing, and returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Strategic Logistics
Alliances</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have sought to establish
strategic alliances as a method of marketing our solutions providing minus 150&deg; C shipping conditions to the life sciences
industry. We have focused our efforts on leading companies in the logistics services industry as well as participants in the life
sciences industry. In connection with our alliances with providers of shipping services, we refer to their offerings as &ldquo;<I>powered
by Cryoport</I><SUP>SM</SUP>&rdquo; to reflect our solutions being integrated into our alliance partner&rsquo;s services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>FedEx.</B> In January
2013, we entered into a master agreement with Federal Express Corporation (&ldquo;FedEx&rdquo;) (the &ldquo;FedEx Agreement&rdquo;)
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal<SUP>TM</SUP>
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days&rsquo; notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport&rsquo;s services for frozen temperature-controlled cold chain transportation
as its FedEx<SUP>&reg;</SUP> Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx&rsquo;s
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal<SUP>TM</SUP> software
platform, which is &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>DHL.</B> In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding (&ldquo;DHL&rdquo;). This relationship with
DHL is a further implementation of the Company&rsquo;s expansion of distribution partnerships under the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo;
model described above, allowing us to expand our sales and marketing reach through our partners and build awareness of the benefits
of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold chain logistics offerings to its life
sciences and healthcare customers with Cryoport&rsquo;s validated cryogenic solutions. DHL added 15 additional certified Life Sciences
stations in the second quarter of 2014 bringing the Thermonet network to 60 stations in operation. Over the course of rolling out
our new relationship, this expanded network will offer Cryoport&rsquo;s cryogenic solutions under the DHL brands as &ldquo;<I>powered
by Cryoport<SUP>SM</SUP></I>&rdquo;. In addition, DHL&rsquo;s customers will be able to have direct access to our cloud-based order
entry and tracking portal to order Cryoport Express<SUP>&reg;</SUP> Solutions and receive preferred DHL shipping rates and discounts.
Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>, is integrated with DHL&rsquo;s tracking and
billing systems to provide DHL life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>UPS.</B> In October
2014, we added United Parcel Services, Inc. (&ldquo;UPS&rdquo;) as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company&rsquo;s
expansion of distributors under the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Over the course of rolling
out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal to
order Cryoport Express<SUP>&reg;</SUP> Solutions and gain access to UPS&rsquo;s broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>,
is integrated with UPS&rsquo;s tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">These agreements the three
largest integrators in the world represent a significant validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>Life Sciences Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Zoetis.</B> In December&nbsp;2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal<SUP>TM</SUP> to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis&rsquo; total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport&rsquo;s scope to manage all logistics
of Zoetis&rsquo; key frozen poultry vaccine to all Zoetis&rsquo; international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport&rsquo;s role to include the logistics management
for a second poultry vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><B>Liventa Biosciences.</B>
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express<SUP>&reg;</SUP> Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport&rsquo;s proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa&rsquo;s distribution capability to orthopedic care providers.
The implementation of Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express<SUP>&reg;</SUP>
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In summary, we serve
the life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Corporate History and
Structure</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We are a Nevada corporation
originally incorporated under the name G.T.5-Limited (&ldquo;GT5&rdquo;) on May&nbsp;25, 1990. In connection with a Share Exchange
Agreement, on March&nbsp;15, 2005 we changed our name to Cryoport, Inc. and acquired all of the issued and outstanding shares of
common stock of Cryoport Systems, Inc., a California corporation, in exchange for 301,352 shares of our common stock (which represented
approximately 81% of the total issued and outstanding shares of common stock following the close of the transaction). Cryoport
Systems, Inc., which was originally formed in 1999 as a California limited liability company, and subsequently reorganized into
a California corporation on December&nbsp;11, 2000, remains the operating company under Cryoport, Inc. Our principal executive
offices are located at 20382 Barents Sea Circle, Lake Forest, CA 92630. The telephone number of our principal executive offices
is (949) 470-2300, and our main corporate website is www.cryoport.com. The information on, or that can be accessed through our
website is not part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company became public
by a reverse merger with a shell company in May 2005. Over time the Company has transitioned from being a development company to
a fully operational public company, providing cold chain logistics solutions to the biotechnology and life sciences industries
globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since fiscal year 2011,
the Company has taken significant steps towards commercialization of the Cryoport Express<SUP>&reg;</SUP> logistics solutions in
validating, perfecting and expanding its features. The Company has now managed shipments of its Cryoport Express<SUP>&reg; </SUP>Shippers
through its Cryoportal<SUP>TM</SUP> into and out of more than 80 countries, handling a vast array of different biological products
and specimens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During fiscal year 2012,
the Company completed the external validation of its Cryoport Express Standard Shipper to ISTA 7E standards and introduced the
Cryoport Express<SUP>&reg;</SUP> High Volume Shipper in response to customer demand. The Company also set up its European distribution
depot in Holland to better serve its customer base and support sales efforts in Europe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During fiscal year 2013,
the Company elected Jerrell Shelton as President and CEO, realigned its sales team and introduced a solutions sales and operating
strategy. In addition, and as part of its global expansion plans, the Company set up its Asian distribution depot in Singapore.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since the beginning of
fiscal year 2014, the Company&rsquo;s Board of Directors (&ldquo;Board&rdquo;) has added certain members to better align the experience
and competencies of the directors with the Company&rsquo;s strategic direction. In March 2013, Richard G. Rathmann, a fund manager,
investor, and advisor to life science companies over the past 20 years, was appointed to the Board.&nbsp; In September 2013, Mr.&nbsp;Rathmann
was elected Chairman of the Board. Also in September 2013, Mr.&nbsp;Edward Zecchini, an executive with more than thirty years of
experience in the healthcare and information technology industries was appointed to the Board. In June 2014, Dr. Ramkumar Mandalam
was appointed to the Board. Dr. Mandalam has more than twenty years of experience in the development of biologics and is currently
the President and Chief Executive Officer of Cellerant Therapeutics, Inc., a clinical-stage biotechnology company. Most recently,
in January 2015, Richard Berman was appointed to the Board. Mr.&nbsp;Berman&rsquo;s business career consists of more than 35 years
of venture capital, management and merger and acquisitions experience. The Company&rsquo;s remaining Board member, Jerrell Shelton,
the President and Chief Executive Officer of Cryoport, joined the Board in October 2012. The Company&rsquo;s five person Board
has four independent Board members, as determined by NASDAQ Rule 5605(a)(2) and the related rules of the Securities and Exchange
Commission.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;
</SUP>Solutions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;
</SUP>Solutions are currently made up primarily of the Cryoportal&trade; software platform, Cryoport Express<SUP>&reg;</SUP> Shippers,
Cryoport Express&reg; Smart Pak data loggers and our life sciences cold chain logistics expertise. Cryoport Express<SUP>&reg;</SUP>
Solutions are focused on improving the reliability of frozen shipping while reducing our clients&rsquo; overall operating costs.
This is accomplished by providing complete end-to-end solutions for the transport and monitoring of frozen or cryogenically preserved
biological or other materials shipped primarily through distribution partners, such as FedEx, UPS, and DHL, and specialty couriers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The information technology
is centered on a cryogenic logistics operating platform called the Cryoportal<SUP>TM</SUP>. The Cryoportal<SUP>TM</SUP> is a cloud-based
cryogenic logistics operating platform. Among its functions, the Cryoportal<SUP>TM</SUP> programmatically assists in the management
of all aspects of the logistics operations beginning with order entry and continuing to monitor, log data, track shipments and
store vital information. The Cryoportal<SUP>TM</SUP> is capable of producing a variety of Cryoport Express<SUP>&reg; </SUP>Analytics
which report shipment performance metrics and evaluates temperature-monitoring data collected by the Cryoport Express<SUP>&reg;</SUP>
Smart Pak during shipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport Express<SUP>&reg;</SUP>
Solutions are focused on improving the reliability of cryogenic logistics while reducing our clients&rsquo; overall operating costs.
This is accomplished by providing tailored and complete end-to-end solutions for cryogenic logistics requirements including management,
transport, monitoring and data collection regarding frozen/cryogenically preserved biological commodities or pharmaceutical materials
shipped primarily though integrators and Cryoport&rsquo;s logistics network which includes specialty couriers, brokers and other
intermediaries. Certain of the intellectual property underlying our Cryoport Express<SUP>&reg;</SUP> Solutions, other than that
related to the Cryoport Express<SUP>&reg;</SUP> Shippers, has been, and continues to be, developed under a contract with an outside
software development company, with the underlying technology licensed to Cryoport for exclusive use in our field of use.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoportal<SUP>TM</SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoportal<SUP>TM
</SUP>is used by Cryoport, our clients and business partners to automate the entry of orders, prepare customs documentation and
to facilitate status and location monitoring of shipped orders while in transit. It is used by Cryoport to assist in managing logistics
operations and to reduce administrative costs typically provisioned through manual labor relating to order-entry, order processing,
preparation of shipping documents and back-office accounting. It is also used to support the high level of customer service expected
by the industry. Certain features of the Cryoportal<SUP>TM</SUP> reduce operating costs and facilitate the scaling of Cryoport&rsquo;s
business, but more importantly they offer significant value to the customer in terms of cost avoidance and risk mitigation. Examples
of these features include automation of order entry, development of Key Performance Indicators (&ldquo;KPI&rsquo;s&rdquo;) to support
our efforts for continuous process improvements in our business, and programmatic exception monitoring to detect and sometimes
anticipate delays in the shipping process, often before the customer or the shipping company becomes aware of them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoportal<SUP>TM
</SUP>also serves as the communications center for the management, collection and analysis of Smart Pak data collected from Smart
Pak data loggers in the field. Data is converted into pre-designed reports containing valuable and often actionable information
that becomes the quality control standard or &ldquo;pedigree&rdquo; of the shipment. This information can be utilized by Cryoport
to provide valuable feedback to our clients relating to their shipments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoportal&trade;
software platform has been developed as a &ldquo;carrier-agnostic&rdquo; system, allowing the client and the Cryoport Client Care
team to work with a single or multiple integrators, freight forwarders, couriers and/or brokers depending on the specific requirements
and client preferences. To increase operational efficiencies, Cryoportal&trade; has already been integrated with the tracking systems
of FedEx, DHL and UPS and we plan to integrate it with other key logistics providers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoportal<SUP>TM
</SUP>was developed for time- and temperature-sensitive shipments that are required to be maintained at specific temperatures,
such as ambient (between 20&deg; and 25&deg;C), chilled (between 2&deg; and 8&deg;C) or frozen (minus 10&deg;C or less all the
way down to cryogenic temperatures (minus 150&deg;C) to ensure that the shipped specimen is not subject to degradation or out of
its designated &ldquo;safe&rdquo; range. While our current focus is on cryogenic logistics within the life sciences industry using
the logistics solutions described herein, the use of the Cryoportal<SUP>TM</SUP> can and may be extended into other temperature
ranges of the cold chain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">To our knowledge, the
Cryoportal&trade; software platform is unique to cold chain logistics in the life sciences industry. It is robust and has considerable
capabilities. We frequently are complimented about the Cryoportal&trade; and our strategic alliance partners chose to license the
Cryoportal&trade; rather than attempt to duplicate its features in their logistics management software. We have engineered in a
way that gives us the ability to offer the &ldquo;<I>powered by Cryoport</I><SUP>SM</SUP>&rdquo; strategy to our strategic alliance
partners.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Cryoport
Express<SUP>&reg; </SUP>Shippers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;
</SUP>Shippers are cryogenic dry vapor shippers capable of maintaining cryogenic temperatures of minus 150&deg; Celsius or below
for a dynamic shipping period of 10 or more days. A dry vapor cryogenic shipper is a device that uses liquid nitrogen contained
inside a vacuum insulated vessel which serves as a refrigerant to provide stable storage temperatures below minus 150&deg; Celsius.
Our Cryoport Express<SUP>&reg;</SUP> Shippers are designed to ensure that there is no pressure build up as the liquid nitrogen
evaporates. We have developed a proprietary retention system to ensure that liquid nitrogen stays inside the vacuum container,
which allows the shipper to be designated as a dry vapor shipper meeting IATA requirements. Biological or pharmaceutical specimens
are stored in a specimen chamber, referred to as a &ldquo;well&rdquo; inside the container and refrigeration is provided by gas
evolving from the liquid nitrogen entrapped within the proprietary retention system. Specimens that may be transported using our
cryogenic shipper include: live cells, scientific or pharmaceutical commodities such as cancer vaccines, diagnostic materials,
semen, eggs, embryos, infectious substances, and other commodities that require continuous exposure to frozen/cryogenic temperatures,
i.e.,&nbsp;temperatures below minus 150&deg; Celsius.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">An important feature of
our Cryoport Express<SUP>&reg;</SUP> Shippers, except for the newly introduced Cryoport Express<SUP>&reg; </SUP>CXVC1 Shipper,
is their compliance with the stringent packaging requirements of IATA Packing Instructions 602 and 650, respectively. These specifications
include meeting internal pressure (hydraulic) and drop performance requirements. Under IATA guidelines, Cryoport Express<SUP>&reg;</SUP>
Shippers are classified as &ldquo;Non-hazardous.&rdquo; Dry ice and liquid nitrogen are classified as &ldquo;Dangerous Goods.&rdquo;
Our shippers are also in compliance with International Civil Aviation Organization (&ldquo;ICAO&rdquo;) regulations that prohibit
egress of liquid nitrogen residue from the shipping packages. The ICAO is a United Nations organization that develops regulations
for the safe transport of dangerous goods by air.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently offer three
sizes of dry vapor shippers, the Cryoport Express<SUP>&reg;</SUP> Standard Shipper with a storage capacity of up to 75 2.0 ml vials,
the Cryoport Express<SUP>&reg;</SUP> High Volume Shipper, which has a storage capacity of up to 500 2.0 ml vials, and the Cryoport
Express<SUP>&reg; </SUP>CXVC1 Shipper, introduced in August 2014, which has a storage capacity of up to 1,500 2.0 ml vials. Our
Cryoport Express&reg; Shippers are composed of an aluminum (aircraft-grade) dewar flask, containing a well for holding the high
value biological or other materials in its inner chamber and our proprietary retention foam that absorbs the liquid nitrogen placed
in the shipper to provide it with its extreme cold temperature. The dewar flask is vacuum insulated to limit the transmission of
heat from outside the flask to the liquid nitrogen captured within the absorption foam and the well.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;
</SUP>Standard Shippers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoport Express<SUP>&reg;
</SUP>Standard Shippers are lightweight, low-cost, re-usable dry vapor liquid nitrogen storage containers that, we believe, combine
the best features of life sciences packaging, cryogenics science and vacuum insulation technology. A Cryoport Express<SUP>&reg;</SUP>
Standard Shipper is composed of an aluminum metallic dewar flask, with a well for holding the biological material in the inner
chamber. The dewar vessel is a device in which the conduction, convection and radiation of heat are reduced as much as possible
giving it the capability of maintaining its contents at a near-constant temperature over relatively long periods of time. The inner
chamber of the shipper is surrounded by a high surface, low-density material which retains the liquid nitrogen in-situ by absorption,
adsorption, and surface tension. Absorption is defined as the taking up of matter in bulk by other matter, as in the dissolving
of a gas by a liquid, whereas adsorption is the surface retention of solid, liquid or gas molecules, atoms or ions by a solid or
liquid. This material absorbs liquid nitrogen several times faster than currently used materials, while providing the shipper with
a hold time and capacity to transport biological materials safely and conveniently. The annular space between the inner and outer
dewar walls is evacuated to a very high vacuum (10<FONT STYLE="font-size: 10pt">-6</FONT> Torr). The specimen-holding chamber has
a primary cap to enclose the specimens/commodities, and a removable and replaceable secondary cap to further enclose the specimen/commodity-holding
container and to contain the liquid nitrogen dry vapor. The entire dewar vessel is then wrapped in a plurality of insulating and
cushioning materials and placed in a disposable outer packaging made of recyclable material. The Cryoport Express<SUP>&reg; </SUP>Standard
Shippers has a storage capacity of up to 75 2.0 ml vials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The technology underlying
the Cryoport Express<SUP>&reg;</SUP> Standard Shipper is under constant refinement to further improve its performance and reliability.
Our current shippers use aircraft grade aluminum and other lower weight materials, reducing freight cost which is based on dimensional-weight.
We maintain ongoing development efforts related to our shippers that are principally focused on material properties, particularly
those properties related to our low-temperature requirement, vacuum retention characteristics, such as the permeability of the
materials, and lower weight materials in an effort to meet the life sciences market requirements for achieving the most reliable,
lowest cost, frozen and cryogenic logistic solutions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;
</SUP>High Volume Shippers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoport Express<SUP>&reg;
</SUP>High Volume Shipper also uses a dry vapor liquid nitrogen (LN2) technology to maintain minus 150&deg; C temperatures with
a dynamic shipping endurance of 10 days. The Cryoport Express<SUP>&reg;</SUP> High Volume Shipper is based on the same dry vapor
technology as Cryoport&rsquo;s original standard dry shipper and utilizes an absorbent material to hold LN2, thus&nbsp;providing
the extended endurance time and IATA validation as a non-hazardous shipping container. The high volume dry shipper is reusable
and recyclable, making it a highly sustainable and cost&nbsp;effective method of transporting life science materials. The Cryoport
Express<SUP>&reg;</SUP> High Volume Shipper has a storage capacity of up to 500 2.0ml vials.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;
</SUP>CXVC1 Shippers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Cryoport Express<SUP>&reg;
</SUP>CXVC1 Shipper is our largest shipper and can be used either as a dry vapor shipper or a liquid shipper. It is designed to
focus on vaccine ampoules or cryovial shipments in canisters. In the case of dry vapor liquid nitrogen (LN2), it maintains minus
150&deg; C temperatures with a dynamic shipping endurance of 20 days. In the case of liquid nitrogen (LN2), it maintains minus
150&deg; C temperatures with a shipping endurance of 72 days. The Cryoport Express<SUP>&reg;</SUP> CXVC1 Shipper, in dry vapor
form, is based on the same technology as Cryoport&rsquo;s original standard dry shipper and utilizes an absorbent material to hold
LN2, thus&nbsp;providing the extended endurance time and IATA validation as a non-hazardous shipping container. The Cryoport Express<SUP>&reg;</SUP>
CXVC1 Shipper, in liquid form, is a straightforward wet dewar with all the characteristics attendant to a wet dewar and with a
holding time of 72 days. The Cryoport Express<SUP>&reg; </SUP>CXVC1 Shipper is reusable and recyclable, making it a highly sustainable
and cost&nbsp;effective method of transporting life science materials. As a point of reference, the Cryoport Express<SUP>&reg;</SUP>
CXVC1 Shipper has a storage capacity of up to 1,500 0.2ml vials.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;</SUP>
Shipper Summary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe Cryoport Express<SUP>&reg;</SUP>
Solutions are the best and most cost effective solution available in the biotechnology and life sciences markets and satisfy customer
needs and scientific and regulatory requirements relating to the shipment of time- and temperature-critical, frozen and refrigerated
transport of biological materials, such as stem cells, cell lines, pharmaceutical clinical trial samples, gene biotechnology, infectious
materials handling, animal and human reproduction markets. Due to our proprietary technology and innovative design, our shippers
are less prone to losing functional hold time when not kept in an upright position than the competing products because our proprietary
dry vapor technology and innovative design prevent the spilling or leakage of the liquid nitrogen when the container is tipped
or on its side which would otherwise adversely affect the functional hold time of the shipper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Cryoport
Express<SUP>&reg; </SUP>Smart Pak Temperature Monitoring System</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Temperature monitoring
is a high-value feature from our client&rsquo;s perspective as it is an effective and reliable method to determine that the shipment
materials were not damaged and did not experience degradation during shipment due to temperature fluctuations. Our Smart Pak System
consists of a self-contained automated data logger and thermocouple capable of recording cryogenic temperatures of samples shipped
in our Cryoport Express<SUP>&reg;</SUP> Shippers. The data-logging temperature probe is positioned within the shipper to record
the most accurate reading. The resultant temperature mapping includes both the temperature inside the chamber (which is closest
to the actual biomaterial) and the external temperature. This reading, combined with the mapping of shipment check-in points, can
provide a holistic view of the complete shipping process. At the client&rsquo;s election, shipments can have a full chain-of-custody
and chain-of-condition&nbsp;with data monitoring, analysis, archival storage available.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Chain-of-Condition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Chain-of-Condition information
is essential for many life sciences materials, for laboratories and in some cases for compliance with regulatory authorities. Data
monitoring starts with our custom built data logger (the Cryoport Express<SUP>&reg;</SUP> Smart Pak). The Cryoport Express&reg;
Smart Pak can be set up to report during a shipment and/or after the shipment. For those shipments involving biologics, clinical
trials or any other material that needs to be verified before receiving, the information recorded by the data logger can be downloaded
to the data station onsite. Alternatively, Cryoport can upload the temperature data from the Cryoport Express&reg; Smart Pak for
analysis to the Cryoportal upon return of the shipper. The report from the data monitor serves as analysis for temperature monitoring
of the entire shipment as well as a tamper warning. The Cryoportal&trade; also acts as the data repository for all shipment and
temperature information, which the customer can access remotely through the Internet. Chain of condition service provided via Cryoport
Express<SUP>&reg;</SUP> Smart Pak is available at the client&rsquo;s election.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Chain-of-Custody</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">When overlaid with the
carrier check-ins, the data monitor and analysis also provides a chain of custody. The report from the data monitor serves as analysis
for temperature monitoring of the entire shipment as well as a tampering warning. If the client has elected to have chain of condition
monitoring, each time the container is opened there is a temperature record. The report identifies outlier temperature excursions
such as opening the shipment in customs or tampering and thus will allow for more conclusive investigations to ensure that specimens
were not adversely impacted during shipment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express<SUP>&reg;
</SUP>Analytics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport Express<SUP>&reg;</SUP>
Analytics information is captured by the Cryoportal&trade; to provide us and our customers access to important information from
the shipments recorded in the Cryoportal&trade; to assist in management of our customers&rsquo; shipping. For us, we use the information
to support planned future features to allow for an expansion of our solutions offering. Analytics is a term used by IT professionals
to refer to performance benchmarks or Key Performance Indicators (&ldquo;KPI&rsquo;s&rdquo;) that management utilizes to measure
performance against desired standards. Examples for analytics tracked through the Cryoportal&trade; include time-based metrics
for order processing time and on-time deliveries by our shipping partners, as well as profiling shipping lanes to determine average
transit times and predicting potential shipping exceptions based on historical metrics. The analytical results are being utilized
by Cryoport to render consultative and proactive client services.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Biological Material
Holders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">A patented containment
bag is used in connection with the shipment of infectious or dangerous goods using the Cryoport Express<SUP>&reg;</SUP> Shippers.
Up to 75 cryovials (polypropylene vials with high-density polyethylene closures), set on aluminum canes are placed into an absorbent
pouch, which is designed to contain the entire contents of all the vials in the event of leakage. This pouch is then placed in
a watertight Tyvek bag (secondary packaging) capable of withstanding cryogenic temperatures, and then sealed. This bag is then
placed into the well of the Cryoport Express<SUP>&reg;</SUP> Shipper.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Logistics Expertise
and Support</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport&rsquo;s client
services professionals provide 24/7/365 live logistics and monitoring services with specialized knowledge in the domestic and global
logistics of life sciences material requiring cryogenic temperatures. The Cryoport logistics professionals have validated shipping
lanes in and out of more than 80 countries to date to ensure shipments maintain cryogenic temperatures and arrive securely and
on time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Other Development
Activities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We are continuing our
research and development efforts to further refine our current technology as well as explore opportunities with partners to offer
complementary packaging solutions for frozen temperature (minus 10&deg; Celsius or less), chilled temperature (2&deg; to 8&deg;
Celsius) and ambient temperature (between 20&deg; and 25&deg; Celsius) shipping markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We also continue to further
expand the functionality of our Cryoportal<SUP>TM</SUP> to ensure a high level of effectiveness and efficiency in the cold chain
logistics process and to allow for intelligent and easy data monitoring and analysis.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Government Regulation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The shipping of diagnostic
specimens, infectious substances and dangerous goods, whether via air or ground, falls under the jurisdiction of many state, federal
and international agencies. The quality of the containers, packaging materials and insulation that protect a specimen determine
whether or not it will arrive in a usable condition. Many of the regulations for transporting dangerous goods in the United States
are determined by international rules formulated under the auspices of the United Nations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The International Civil
Aviation Organization (&ldquo;ICAO&rdquo;) is the United Nations organization that develops regulations (Technical Instructions)
for the safe transport of dangerous goods by air. If shipment is by air, compliance with the rules established by International
Air Transport Association (&ldquo;IATA&rdquo;) is required. IATA is a trade association made up of airlines and air cargo couriers
that publishes annual editions of the IATA Dangerous Goods Regulations. These regulations interpret and add to the ICAO Technical
Instructions to reflect industry practices. Additionally, the Centers for Disease Control (&ldquo;CDC&rdquo;) has regulations (published
in the Code of Federal Regulations) for interstate shipping of specimens, and OSHA also addresses the safe handling of Class 6.2
Substances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;</SUP>
Shippers meet Packing Instructions 602 and 650 and are certified for the shipment of Class 6.2 Dangerous Goods per the requirements
of the ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air and IATA. Our present and planned future versions
of the Cryoport Smart Pak data logger will likely be subject to regulation by the FAA, FCC, FDA, IATA and possibly other agencies
which may be difficult to determine on a global basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We are also subject to
numerous other federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs
to comply with such laws and regulations now or in the future.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Manufacturing and Raw
Materials</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Manufacturing</I>.
Due to our currently adequate levels of dewar inventories, manufacturing is currently suspended. The component parts for our shippers
are primarily manufactured at third party manufacturing facilities. We also have a warehouse at our facility in Lake Forest, California,
where we are capable of manufacturing certain parts and to fully assemble our shippers. Most of the components that we use in the
manufacture of our shippers are available from more than one qualified supplier. For some components, however, there are relatively
few alternate sources of supply and the establishment of additional or replacement suppliers may not be accomplished immediately,
however, we have identified alternate qualified suppliers. Should this occur, we believe that with our current level of shippers,
we have enough inventory to cover our forecasted demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">There are no specific
agreements with any manufacturer nor are there any long term commitments to any manufacturer. We believe that most of the manufacturers
currently used by us could be replaced within a short period of time as none have a proprietary component or a substantial capital
investment specific to our shippers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our production and manufacturing
process incorporates innovative technologies developed for aerospace and other industries which are cost effective, easier to use
and more functional than the traditional dry ice devices and other methods currently used for the shipment of temperature-sensitive
materials. Our manufacturing process uses non-hazardous cleaning solutions, which are provided and disposed of by a supplier approved
by the Environmental Protection Agency (the &ldquo;EPA&rdquo;). EPA compliance costs for us are therefore negligible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport Express <SUP>&reg;</SUP>
High Volume Shippers are purchased from a third party and modified to meet our specifications using our proprietary technology
and know-how.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our data loggers have
been acquired from a single source with the calibration done by an independent third party. We are currently considering adding
alternate data loggers with greater range of functionality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Raw Materials</I>.
Various common raw materials are used in the manufacture of our shippers and in the development of our technologies. These raw
materials are generally available from several alternate distributors and manufactures. We have not experienced any significant
difficulty in obtaining these raw materials and we do not consider raw material availability to be a significant factor in our
business.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Patents and Proprietary
Rights</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In order to remain competitive,
we must develop and maintain protection on the proprietary aspects of our technologies. We rely on a combination of patents, copyrights,
trademarks, trade secret laws and confidentiality agreements to protect our intellectual property rights. We currently own three
registered U.S. trademarks and three issued U.S. patents primarily covering various aspects of our Cryoport Express<SUP>&reg;</SUP>
Shippers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition, we have a
pending U.S. patent application for various aspects of our shipper and web-portal, which includes, in part, various aspects of
our business model referred to as the Cryoport Express&reg; System. We have also filed a U.S. provisional patent application for
a smart label which will communicate electronically with our data logger. We intend to file additional patent applications to strengthen
our intellectual property rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The technology covered
by the above indicated issued patents relates to matters specific to the use of liquid nitrogen shippers in connection with the
shipment of biological materials. The concepts include those of disposability, package configuration details, liquid nitrogen retention
systems, systems related to thermal performance, systems related to packaging integrity, and matters generally relevant to the
containment of liquid nitrogen. Similarly, the trademarks mentioned relate to the cryogenic temperature shipping activity. Issued
patents and trademarks currently owned by us and a patent application include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 92%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Type:</b></font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>No.</b></font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Issued</b></font></td>
    <td style="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Expiration</b></font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 45%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Patent</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 15%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">6,467,642</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 15%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Oct.&nbsp;22,&nbsp;2002</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 20%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Jan.&nbsp;2,&nbsp;2021</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Patent</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6,119,465</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Sep.&nbsp;19,&nbsp;2000</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Feb.&nbsp;10,&nbsp;2019</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Patent</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6,539,726</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Apr. 1, 2003</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">May 8, 2021</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Patent Application&nbsp;</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">12/656,641</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Trademark</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">3,569,471</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Feb. 3, 2009</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Feb. 3, 2019</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Trademark</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">3,589,928</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Mar.&nbsp;17,&nbsp;2009</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Mar. 17, 2019</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Trademark</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">2,632,328</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Oct. 8, 2002</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Oct. 8, 2022</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our success depends in
part upon our ability to develop proprietary products and technologies and to obtain patent coverage for these products and technologies.
We intend to file trademark and patent applications covering any newly developed products, methods and technologies. However, there
can be no guarantee that any of our pending or future filed applications will be issued as patents. There can be no guarantee that
the U.S. Patent and Trademark Office or some third party will not initiate an interference proceeding involving any of our pending
applications or issued patents. Finally, there can be no guarantee that our issued patents or future issued patents, if any, will
provide adequate protection from competition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Patents provide some degree
of protection for our proprietary technology. However, the pursuit and assertion of patent rights involve complex legal and factual
determinations and, therefore, are characterized by significant uncertainty. In addition, the laws governing patent issuance and
the scope of patent coverage continue to evolve. Moreover, the patent rights we possess or are pursuing generally cover our technologies
to varying degrees. As a result, we cannot ensure that patents will issue from any of our patent applications, or that any of its
issued patents will offer meaningful protection. In addition, our issued patents may be successfully challenged, invalidated, circumvented
or rendered unenforceable so that our patent rights may not create an effective barrier to competition. Moreover, the laws of some
foreign countries may not protect our proprietary rights to the same extent as the laws of the United States. There can be no assurance
that any patents issued to us will provide a legal basis for establishing an exclusive market for our products or provide us with
any competitive advantages, or that patents of others will not have an adverse effect on our ability to do business or to continue
to use our technologies freely.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We granted a first priority
security interest in generally all of our assets, including our intellectual property, to secure the repayment of the 7% Bridge
Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We may be subject to third
parties filing claims that our technologies or products infringe on their intellectual property. We cannot predict whether third
parties will assert such claims against us or whether those claims will hurt our business. If we are forced to defend against such
claims, regardless of their merit, we may face costly litigation and diversion of management&rsquo;s attention and resources. As
a result of any such disputes, we may have to develop, at a substantial cost, non-infringing technology or enter into licensing
agreements. These agreements may be unavailable on terms acceptable to such third parties, or at all, which could seriously harm
our business or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We also rely on trade
secret protection of our intellectual property. We attempt to protect trade secrets by entering into confidentiality agreements
with third parties, employees and consultants, although, in the past, we have not always obtained such agreements. It is possible
that these agreements may be breached, invalidated or rendered unenforceable, and if so, our trade secrets could be disclosed to
our competitors. Despite the measures we have taken to protect our intellectual property, parties to such agreements may breach
confidentiality provisions in our contracts or infringe or misappropriate our patents, copyrights, trademarks, trade secrets and
other proprietary rights. In addition, third parties may independently discover or invent competitive technologies, or reverse
engineer our trade secrets or other technology. Therefore, the measures we are taking to protect our proprietary technology may
not be adequate.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Customers and Distribution</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As a result of growing
globalization, including such areas as biotechnology and life science, clinical trials, distribution of pharmaceutical products
and reproductive medicine, the requirement for effective and reliable solutions for keeping clinical samples, pharmaceutical products
and other specimen at frozen temperatures takes on added significance due to more complex shipping routes, extended shipping times,
custom delays and logistics challenges. Today, such specimens are traditionally shipped in styrofoam cardboard insulated containers
packed with dry ice, gel/freezer packs or a combination thereof. The current dry ice solutions have limitations that severely limit
their effective use for both short and long-distances (e.g., international). Conventional dry ice shipments often require labor-intensive
&ldquo;re-icing&rdquo; operations resulting in higher labor and shipping costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe our patented
Cryoport Express<SUP>&reg;</SUP> Shippers, the Cryoportal&trade; and our logistics expertise make us well positioned to take advantage
of the growing demand for effective and efficient international transport of temperature sensitive materials resulting from continued
globalization. Of particular significance is the trend within the life sciences and biotechnology industries toward globalization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We provide domestic shipping
solutions in situations where specimens must be kept at frozen temperatures and in regions where there is a high priority placed
on maintaining the integrity of materials shipped at these temperatures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Pharmaceutical Clinical
Trials</I>. Every United States based pharmaceutical company developing a new drug must seek drug development protocol approval
by the FDA. These clinical trials are to test the safety and efficacy of the potential new drug among other things. A significant
amount of clinical trial activity is managed by a number of large Clinical Research Organizations (&ldquo;CROs&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with the
clinical trials, due to globalization, companies can be enrolled from all over the world and may need to regularly submit a blood
or other specimen at the local hospital, doctor&rsquo;s office or laboratory. These samples are then sent to specified testing
laboratories, which may be local or in another country. The testing laboratories will typically set the requirements for the storage
and shipment of blood specimens. In addition, drugs used by the patients may require frozen shipping to the sites of the clinical
trials. While both domestic and international shipping of these specimens is accomplished using dry ice today, international shipments
especially present several problems, as dry ice, under the best of circumstances, can only provide freezing for one to two days
in the absence of re-icing (which is quite costly). Because shipments of packages internationally can take longer than one to two
days or be delayed due to flight cancellations, incorrect destinations, labor problems, ground logistics, customs delays and safety
reasons, dry ice is not always a reliable and/or cost effective option. Clinical trial specimens are often irreplaceable because
each one represents clinical data at a prescribed point in time, in a series of specimens on a given patient, who may be participating
in a trial for years. Sample integrity during the shipping process is vital to retaining the maximum number of patients in each
trial. Our shippers are ideally suited for this market, as our longer hold time ensures that specimens can be sent over long distances
with minimal concern that they will arrive in a condition that will cause their exclusion from the trial. There are also many instances
in domestic shipments where Cryoport Express <SUP>&reg;</SUP> Shippers will provide higher reliability and be cost effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Furthermore, the IATA
requires that all airborne shipments of laboratory specimens be transmitted in either IATA Instruction 650 or 602 certified packaging.
We have developed and obtained IATA certification of our Cryoport Express<SUP>&reg;</SUP> System, which is ideally suited for this
market, in particular due to the elimination of the cost to return the reusable shipper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Biotechnology and Diagnostic
Companies</I>. The biotechnology market includes basic and applied research and development in diverse areas such as stem cells,
cloning, gene therapy, DNA tumor vaccines, tissue engineering, genomics, and blood products. Companies participating in the foregoing
fields rely on the frozen transport of specimens in connection with their research and development efforts, for which our Cryoport
Express<SUP>&reg;</SUP> Shippers are ideally suited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Cell Therapy Companies.
</I>Rapid advancements are underway in the research and development of cell based therapies, which involve cellular material being
injected into a patient. In allogeneic cell therapy, the donor is a different person to the recipient of the cells. Autologous
cell therapy is a therapeutic intervention that uses an individual&rsquo;s cells, which are cultured and expanded outside the body,
and reintroduced into the donor. Once cells are processed, in either case, they must be shipped cryogenically for which our Cryoport
Express<SUP>&reg;</SUP> Shippers are ideally suited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Central Laboratories.
</I>With the increase and globalization of clinical studies and trials, logistics has become more complex and ensuring sample integrity
has become more challenging. International courier costs are now consuming a significant portion of global protocol budgets. We
believe laboratories performing the testing of samples collected during the conduct of these global multi-site studies are looking
for reliable state-of-the-art logistics solutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Pharmaceutical Distribution</I>.
The current focus for the Cryoport Express<SUP>&reg;</SUP> System also includes the area of pharmaceutical distribution. There
are a significant number of therapeutic drugs and vaccines currently or anticipated soon to be undergoing clinical trials. After
the FDA approves them for commercial marketing, it will be necessary for the manufacturers to have a reliable and economical method
of distribution to the physician who will administer the product to the patient. It is likely that the most efficient and reliable
method of distribution will be to ship a single dosage to the administering physician. These drugs are typically identified to
individual patients and therefore will require a complete tracking history from the manufacturer to the patient. The most reliable
method of doing this is to ship a unit dosage specifically for each patient. If such drugs require maintenance at frozen or cryogenic
temperatures, each such shipment will require a frozen or cryogenic shipping package. Cryoport can provide the technology to meet
this anticipated need.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Distribution of Vaccines
and Biologic Therapies.</I> There are a variety of vaccines and other drugs or therapies that require distribution at frozen or
cryogenic temperatures. We anticipate significant growth in this area, in particular therapies based upon stem cells. It is likely
that the most efficient and reliable method of distribution will be to ship a single dosage or a limited supply to the physician
for administration to a patient.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In February 2013, we started
providing comprehensive logistics management services for the lead poultry vaccine distribution of Zoetis, Inc. In October 2013,
Zoetis engaged us to manage distribution of an additional vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One of our strategic alliance
partners, Liventa Bioscience, Inc., is, in part, basing its business strategy on using our Cryoport Express<SUP>&reg; </SUP>Shippers
to deliver supplies of cell-based therapies to physicians, which will be able to keep the shippers at the physician&rsquo;s facility
for up to one week and thus avoid the need to invest in costly cryogenic refrigeration equipment for commodity storage. With the
inclusion of our Cryoport Express<SUP>&reg;</SUP> Smart Pak data logger, Liventa and the physician will have assurance that cryogenic
temperatures were maintained within the shipper.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Fertility Clinics and
In Vitro Fertilization (&ldquo;IVF&rdquo;)</I>. Maintaining cryogenic temperatures during shipping and transfer of in vitro fertilization
specimens like eggs, sperm, or embryos is critical for cell integrity in order to retain viability, stabilize the cells, and ensure
reproducible results and successful IVF treatment. There are approximately 3,300 fertility clinics worldwide. Cryoport anticipates
that this market will continue to grow; in the United States alone, the fertility market has grown to more than $4.0 billion with
over 1.3 million women seeking treatment each year. In the worldwide market, it is reported that there are more than one billion
IVF cycles per year and growing.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Sales and Marketing</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently have two
sales directors in the United States, one sales director in Europe, one inside sales representative focused on Reproductive Medicine/IVF
and a part time senior director of marketing promoting the use of our Cryoport Express&reg; Solutions on a direct basis, in addition
to the distribution channels we are establishing. Given the global nature of our business, our sales and marketing initiatives
should more thoroughly cover the Americas, Europe and Asia. For the fiscal year ended March&nbsp;31, 2014, we had one customer
that accounted for 30.8% of net revenues. No other single customer generated over 10% of our net revenues during 2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our geographical revenues
for the fiscal year ended March&nbsp;31, 2014 were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 70%; border-collapse: collapse; margin-left: 0.65in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 87%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">USA</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 9%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">83.7</font></td>
    <TD STYLE="width: 2%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">%</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Europe</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6.7</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">%</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Asia</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">3.7</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">%</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Rest of World</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: right; text-indent: 0in"><font style="font-size: 10pt">5.9</font></td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">%</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We renewed our agreement
with FedEx and plan to further expand our revenues and marketing efforts through the establishment of additional strategic partnerships
with global integrators and freight forwarders. Subject to available financial resources, we also plan to hiring additional sales
and marketing personnel and implement marketing initiatives intended to increase awareness of the Cryoport Express<SUP>&reg;</SUP>
Solutions.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Operations
Centers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition to the services
provided through our facility in Lake Forest, California, we have contracted with third parties to run our European Operations
Center (located in Leiden, Holland) and Asian Operations Center (located in Singapore). The operations centers provide warehousing,
shipping, receiving, refurbishing and recycling services for our shipping containers. This approach is a cost-effective way to
initiate operations outside of the US and allows us to scale up as our business grows globally. In March 2013, we shut down a small
third-party operations center in New Delhi, India without impact on our business or customers.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Industry and Competition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our products and services
are sold into a rapidly growing segment of the logistics industry focused on the temperature sensitive packaging and shipping of
biological materials. Expenditures for &ldquo;value added&rdquo; packaging for frozen transport have been increasing for the past
several years and, due in part to continued globalization, are expected to continue to increase even more in the future as more
domestic and international biotechnology firms introduce pharmaceutical products that require continuous refrigeration at cryogenic
temperatures. We believe this will require a greater dependence on passively controlled temperature transport systems (i.e., systems
having no external power source). In addition, we expect that industry standards and regulations will be introduced globally, requiring
more comprehensive tracking and validation of shipping temperatures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We believe that growth
in the following markets has resulted in the need for increased reliability, efficiencies and greater flexibility in the temperature
sensitive segment of the logistics market:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">cell-based therapies</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">gene and stem cell biotechnology</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">cell lines</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">vaccine production</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">commercial drug product
distribution</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">clinical trials, including
transport of tissue culture samples</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">diagnostic specimens</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">infectious sample materials</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">inter/intra-laboratory
diagnostic testing</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">temperature-sensitive
specimens</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">biological samples,
in general</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">environmental sampling</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">IVF</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">animal husbandry</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Many of the biological
products in these above markets require transport in a frozen state as well as the need for shipping containers which have the
ability to maintain a frozen, cryogenic environment (e.g., minus 150&deg; Celsius) for a period ranging from two to ten days (depending
on the distance and mode of shipment). These products include stem cells, semen, embryo, tissue, tissue cultures, cultures of viruses
and bacteria, enzymes, DNA materials, vaccines and certain pharmaceutical products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One of the integral parts
of our solutions are our Cryoport Express<SUP>&reg;</SUP> Shippers that are based on a liquid nitrogen dry vapor technology. The
following paragraphs compare our shippers with dry ice and liquid nitrogen shipping methods. Our solutions integrate the Cryoport
Express&reg; Shippers with our Cryoportal<SUP>TM</SUP> logistics software platform and our cold chain logistics know-how that are
comprehensive and tailored to client requirements.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express
Shippers (Liquid Nitrogen Dry Vapor) compared to Dry Ice Shipments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One problem faced by many
companies operating in these specialized markets is the limited number of cryogenic shipping systems serving their needs. The currently
adopted protocol and the most common method for packaging frozen transport in these industries is the use of solid-state carbon
dioxide (dry ice). Dry ice is and has been used extensively in shipping to maintain a frozen state for a period of one to four
days. Dry ice is used in the transport of many biological products, such as pharmaceuticals, laboratory specimens and certain infectious
materials. The common approach to shipping these items via ground freight is to pack the product in a container, such as an expanded
polystyrene (styrofoam) box or a molded polyurethane box, with a variable quantity of dry ice. The box is taped or strapped shut
and shipped to its destination with freight charges based on its initial shipping weight. All dry ice shipping is considered dangerous
goods shipping, requiring extra packaging steps and adding costs. It gives off carbon dioxide and sublimates unevenly and in short
duration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">With respect to shipments
via specialized courier services, there is no standardized method or device currently in use for the purpose of transporting temperature-sensitive
frozen biological specimens. One common method for courier transport of biological materials is to place frozen specimens, refrigerated
specimens, and ambient specimens into a compartmentalized container, similar in size to a 55 quart Coleman or Igloo cooler. The
freezer compartment in the container is loaded with a quantity of dry ice at minus 78&deg; Celsius, while the refrigerated compartment
at 8&deg; Celsius utilizes ice substitutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Two manufacturers of the
polystyrene and polyurethane containers frequently used in the shipping and courier transport of dry ice frozen specimens are Insulated
Shipping Containers, Inc. and Tegrant (formerly SCA Thermosafe). When these containers are used with dry ice, the average sublimation
rate (e.g., the rate at which dry ice turns from a solid to a gaseous state) in a container with a 1 <SUP>1</SUP>/<SUB>2 </SUB>inch
wall thickness is slightly less than three pounds per 24 hours. Other existing refrigerant systems employ the use of gel packs
and ice substitutes for temperature maintenance. Gels and eutectic solutions (phase changing materials) with a wide range of phasing
temperatures have been developed in recent years to meet the needs of products with varying specific temperature control requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The use of dry ice and
ice substitutes, however, regardless of external packaging used, are frequently inadequate because they do not provide low enough
storage temperatures and, in the case of dry ice, last for only a few days without re-icing. As a result, companies run the risk
of increased costs due to lost specimens and additional shipping charges due to the need to re-ice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Some of the other disadvantages
to using dry ice for shipping or transporting temperature sensitive products are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">availability of a dry
ice source;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">handling and storage
of the dry ice;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">cost of the dry ice;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">compliance with local,
state and federal regulations relating to the storage and use of dry ice;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">dangerous goods shipping
regulations;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">weight of containers
when packed with dry ice;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">securing a shipping
container with a high enough R-value (which is a measure of thermal resistance) to hold the dry ice and product for the required
time period;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">securing a shipping container
that meets the requirements of IATA, the DOT, the CDC, and other regulatory agencies; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">emission of greenhouse
gases (primarily carbon dioxide) into the environment.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Due to the limitations
of dry ice, specimens that require frozen shipping are more securely shipped at true cryogenic temperatures using a service such
as liquid nitrogen dry vapor shippers (Cryoport Express Shippers), or liquid nitrogen shippers where the specimen is kept over
actual liquid nitrogen. However, liquid nitrogen is hazardous and has many pitfalls including safety and expense.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Cryoport Express
Shippers (Liquid Nitrogen Dry Vapor) compared to Liquid Nitrogen Dewars/Tanks</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">There are distinct disadvantages
when using liquid nitrogen compared to the dry vapor liquid nitrogen used in Cryoport Express<SUP>&reg;</SUP> Shippers. Liquid
nitrogen dewars/tanks are classified as dangerous goods and cannot be shipped as parcel. In addition, the liquid nitrogen has to
be disposed of prior to returning the dewar/tank to its origin. These issues add additional procedural steps and costs to the shipment.
In addition, there is a risk of liquid nitrogen leakage if the dewar/tank tips to the side during transport, which can cause bodily
injury and compromise the specimen being shipped. Due to the use of our proprietary technology, our Cryoport Express<SUP>&reg;</SUP>
Shippers are not prone to leakage when on their side or inverted, thereby protecting the integrity of our shipper&rsquo;s hold
time and being safe for handling.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">While both liquid nitrogen
dry vapor and liquid nitrogen shippers provide solutions to the issues encountered when shipping with dry ice, liquid nitrogen
shippers have some draw backs. For example, the cost for a liquid nitrogen shipper typically can range from $650 to $4,000 per
unit, which can substantially limit their use for the transport of many common biologics, particularly with respect to small quantities
such as is the case with direct to the physician drug delivery. Because of the initial cost and limited production of these containers,
they are designed to be reusable. However, the cost of returning these containers can be significant, particularly in international
markets, because most applications require only one-way shipping. In addition, the logistics support of cryogenic shippers requires
more sophisticated logistics management and discipline to ensure shippers are returned and recycled, especially for international
shipments, which many companies do not have in place.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport&rsquo;s solutions
are totally comprehensive and integrated for maximum reliability, economy and total effectiveness. Cryoport&rsquo;s total logistics
solution enables life sciences companies to utilize the superior liquid nitrogen dry vapor technology without having to make capital
investments or developing in-house logistics expertise and systems by offering a complete solution, which includes the cloud-based
Cryoportal<SUP>TM</SUP> logistics management platform, the temperature monitoring system and the 24/7/365 logistics support. Cryoport
allows the customer to outsource logistics and focus on its core competencies while maintaining visibility of all shipping related
information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Within our intended biotechnology
and life sciences markets for Cryoport Express<SUP>&reg;</SUP> Shippers, there is limited known direct competition. We compete
with liquid nitrogen and dry ice solutions by reason of the improved and integrated hardware and software technology in our products
including our comprehensive logistics management software and through the use of our service enabled business model. The Cryoport
Express<SUP>&reg;</SUP> Solution provides a simple and cost effective solution for the frozen or cryogenic transport of biotech
and life sciences materials. The Cryoportal<SUP>TM</SUP> assists with the management, scheduling and shipping of the Cryoport Express<SUP>&reg;</SUP>
Shippers, removing the burdens associated with other methods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Traditional dry ice shippers
and liquid nitrogen tank suppliers, such as MVE/Chart Industries, Taylor Wharton, and Air Liquide, offer various models of dry
vapor liquid nitrogen shippers that are not as cost efficient for multi-use and multi-shipment purposes due to their significantly
greater unit costs and unit weight (which may substantially increase the shipping cost). On the other hand, they are more established
and have larger organizations and have greater financial, operational, sales and marketing resources, have a broader manufactured
product offering of other liquid nitrogen products and more experience in research and development than we do.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Factors that we believe
give us a competitive advantage are attributable to our software and shipping containers, which allow our shipper to retain liquid
nitrogen when placed in non-upright positions, the overall &ldquo;leak-proofness&rdquo; of our package which determines compliance
with shipping regulations, the overall weight and volume of the package which determines shipping costs, and our business model
represented by the merged integration of our shipper with Cryoportal<SUP>TM</SUP> and Smart Pak data logger into a seamless shipping,
tracking and monitoring solution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Other companies that offer
potentially competitive products include Industrial Insulation Systems, which offers cryogenic transport units and has partnered
with Marathon Products Inc., a manufacturer and global supplier of wireless temperature data collecting devices used for documenting
environmentally sensitive products through the cold chain, and Kodiak Thermal Technologies, Inc. which offers, among other containers,
a repeat use active-cool container that uses free piston stirling cycle technology. While not having their own shipping devices,
BioStorage Technologies is potentially a competitive company through their management services offered for cold-chain logistics
and long-term biomaterial storage. Cryogena offers a single use disposable LN2 shipper with better performance than dry ice, but
it does not perform as well and is not as cost-effective as the Cryoport solution when all costs are considered. In addition, BioMatrica,
Inc. is developing and offering technology that stabilizes biological samples and research materials at room temperature. They
presently offer these technologies primarily to research and academic institutions; however, their technology may eventually enter
the broader cold-chain market. Fisher BioServices, part of Thermo Fisher Scientific, provides cell therapy logistics services,&nbsp;maintaining
cold chain from manufacturer to patient bedside.&nbsp;&nbsp;They provide customized solutions in biospecimen collection kits, biospecimen
shipping, lab processing, biobanking and&nbsp;clinical trial support&nbsp;services.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Research and Development</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our research and development
efforts are focused on continually improving the features of our Cryoport Express<SUP>&reg;</SUP> Solutions including the cloud-based
Cryoportal<SUP>TM</SUP> and the Cryoport Express<SUP>&reg;</SUP> Shippers. These efforts are expected to lead to the introduction
of shippers of varying sizes based on market requirements, constructed of lower cost materials and utilizing high volume manufacturing
methods that will make it practical to provide the cryogenic packages offered with the Cryoport Express<SUP>&reg; </SUP>Solutions.
Alternative phase change materials in place of liquid nitrogen may be used to increase the potential markets these shippers can
serve such as ambient and 2&deg;- 8&deg;C markets. Our research and development expenditures for the fiscal years ended March&nbsp;31,
2014 and 2013 were $409,100 and $425,400, respectively with the largest portion being spent on software maintenance and development.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Employees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The efforts of our employees
are critical to our success. We believe that we have assembled a strong management team with the experience and expertise needed
to execute our business strategy. We anticipate hiring additional personnel as needs dictate to implement our growth strategy.
As of December 31, 2014, we had twenty-three full-time employees, three consultants and three temporary employees.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Insurance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently maintain
general liability insurance, with coverage in the amount of $1 million per occurrence, subject to a $2 million annual limitation.
Claims may be made against us that exceed these limits. In fiscal year 2014, we did not experience any claims against our professional
liability insurance. Our liability policy is an &ldquo;occurrence&rdquo; based policy. Thus, our policy was complete when we purchased
it, and following cancellation of the policy, it will continue to provide coverage for future claims based on conduct that took
place during the policy term. However, our insurance may not protect us against all liability because our policies typically have
various exceptions to the claims covered and also require us to assume some costs of the claim even though a portion of the claim
may be covered. In addition, if we expand into new markets, we may not be aware of the need for, or be able to obtain insurance
coverage for such activities or, if insurance is obtained, the dollar amount of any liabilities incurred could exceed our insurance
coverage. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse
effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We also maintain product
liability insurance with coverage in the amount of $1,000,000 per year. In addition, we currently maintain cargo insurance for
shipments for one customer, with coverage of up to $10,000 per shipment.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_010"></A>DESCRIPTION OF PROPERTY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We do not own real property.
We currently lease one facility, with approximately 12,000 square feet of corporate, research and development, and warehouse facilities,
located in Lake Forest, California under an operating lease expiring June 30, 2015, which we do not intend to renew. We are currently
exploring other facilities to meet our growing demands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company currently
makes base lease payments of approximately $10,000 per month, due at the beginning of each month. We believe that these facilities
are adequate, suitable and of sufficient capacity to support our immediate needs. Additional space may be required, however, as
we expand our research and development, manufacturing and selling and marketing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_011"></A>LEGAL PROCEEDINGS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In the ordinary course
of business, we are at times subject to various legal proceedings and disputes, including product liability claims. We currently
are not aware of any such legal proceedings or claim that we believe will have, individually or in the aggregate, a material adverse
effect on our business, operating results or cash flows. It is our practice to accrue for open claims based on our historical experience
and available insurance coverage.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_012"></A>DIRECTORS AND EXECUTIVE
OFFICERS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Directors and Executive
Officers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
for the name and age of each director and executive officer, the year first elected as a director and/or executive officer and
the position(s) held with Cryoport:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 30%; border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Name</b></font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="width: 8%; border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Age</b></font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="width: 46%; border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Position</b></font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="width: 13%; border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9.5pt; text-align: center; text-indent: 24.5pt"><b>Date</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 9.5pt; text-align: center; text-indent: 24.5pt"><b>Elected</b></P></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Jerrell W. Shelton</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">69</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">President, Chief Executive Officer, Director</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2012</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Robert S. Stefanovich</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">50</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Chief Financial Officer, Treasurer and Corporate Secretary</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2011</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Richard J. Berman</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">72</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2014</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Edward J. Zecchini</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">53</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2013</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Richard G. Rathmann</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">53</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Chairman</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2013</font></td></tr>
<tr style="vertical-align: top">
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Ramkumar Mandalam</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">49</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <td style="text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="text-align: center; text-indent: 0in"><font style="font-size: 10pt">2014</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Background of Directors
and Officers:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Jerrell W. Shelton</I>,
age 69, became President and Chief Executive Officer of the Company on November 5, 2012. He served on the Board of Directors and
standing committees of Solera Holdings, Inc. from April 2007 through November 2011. From June 2004 to May 2006, Mr.&nbsp;Shelton
was the Chairman and CEO of Wellness, Inc., a provider of advanced, integrated hospital and clinical environments. Prior to that,
he served as CEO of IBM&rsquo;s WebFountain. From October 1998 to October 1999, Mr.&nbsp;Shelton was Chairman, President and CEO
of NDC Holdings II, Inc. Between October 1996 and July 1998, he was President and CEO of Continental Graphics Holdings, Inc. and
from October 1991 to July 1996, Mr.&nbsp;Shelton served as President and CEO of Thomson Business Information Group. Mr.&nbsp;Shelton
has a B.S. in Business Administration from the University of Tennessee and an M.B.A. from Harvard University. Mr.&nbsp;Shelton
currently serves on the Advisory Board of Directors and the Nominating and Stewardship committee of the Smithsonian Institution
Libraries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Robert S. Stefanovich</I>,
age 50, became Chief Financial Officer, Treasurer and Corporate Secretary for the Company on June&nbsp;27, 2011 following the Company&rsquo;s
filing of its Form&nbsp;10&ndash;K for the fiscal year ended March&nbsp;31, 2011. On June 15, 2012, Mr.&nbsp;Stefanovich served
as the Principal Executive Officer of the Company. From November&nbsp;2007 through March&nbsp;2011, Mr.&nbsp;Stefanovich served
as Chief Financial Officer of Novalar Pharmaceuticals, Inc., a venture-backed specialty pharmaceutical company. Prior to that,
he held several senior positions, including interim Chief Financial Officer of Xcorporeal, Inc., a publicly traded medical device
company, Executive Vice President and Chief Financial Officer of Artemis International Solutions Corporation, a publicly traded
software company, Chief Financial Officer and Secretary of Aethlon Medical Inc., a publicly traded medical device company and Vice
President of Administration at SAIC, a Fortune 500 company. Mr.&nbsp;Stefanovich also served as a member of the Software Advisory
Group and an Audit Manager with Price Waterhouse LLP&rsquo;s (now PricewaterhouseCoopers) hi-tech practice in San Jose, CA and
Frankfurt, Germany. He currently also serves as a board member of Project InVision International, a provider of business performance
improvement solutions. He received his Masters of Business Administration and Engineering from University of Darmstadt, Germany.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Richard J. Berman</I>,
age 72 became a member of the Board in January 2015, and serves as Chairman of the Audit and Compensation Committee and member
of the Nominating and Governance Committee of the Board. Mr.&nbsp;Berman&rsquo;s business career consists of more than 35 years
of venture capital, management and merger and acquisitions experience. He currently serves as a director of four public companies:
NeoStem, Inc. (NASDAQ: NBS), Advaxis, Inc. (OTC: ADXS), Lustros, Inc. (OTC: LSLD) and MetaStat Inc. (OTC: MTST), where he is the
chairman, and has served as a director and/or officer of more than a dozen public and private companies. His previous experience
includes positions at Goldman Sachs and as Senior Vice President of Bankers Trust Company. Some of his more notable positions include
his service from 2006-2011 as Chairman of National Investment Managers (OTC: NIVM.OB), a company with $12 billion in pension administration
assets. In 2012, he sold Easylink Services for over $300 million, where he was chairman and CEO from 1999 to 2000 and director
from 1998 to 2012. From 2004-2010, Mr.&nbsp;Berman served as a Director of NexMed Inc., a public biotech company. In 2008, Mr.&nbsp;Berman
became its Chairman and CEO. In 2010 he merged the company with Apricus Biosciences. Mr.&nbsp;Berman is a past director of the
Stern School of Business of NYU, where he received his B.S. and M.B.A. He also holds two law degrees, a J.D. from Boston College
and a Special Certificate from The Hague Academy of International Law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Edward J.
Zecchini</I>, age 53 became a member of the Board on September 13, 2013, and serves as Chairman of the Nominating and
Governance Committee of the Board and member of the Audit Committee and the Compensation Committee. Mr.&nbsp;Zecchini
currently serves as Chief Information Officer at Remedy Partners, Inc. Prior to that, Mr. Zecchini served as Executive Vice
President and Chief Technology Officer at Sandata Technologies, LLC, from May 2010 to March 2014, as President and Chief Executive Officer of IT Analytics LLC from March 2008 to
April 2010, Executive Vice President of Operations and Chief Information Officer of Touchstone Healthcare Partnership from
May 2007 to February 2008 and Senior Vice President and Chief Information Officer of HealthMarkets, Inc. from October 2004 to
April 2007. Earlier in his career he held senior level positions at Thomson Healthcare and SportsTicker, Inc.
Mr.&nbsp;Zecchini has over thirty years of experience in the healthcare and information technology
industries. Mr.&nbsp;Zecchini holds a Bachelor of Arts degree from the State University of New York. Mr.&nbsp;Zecchini
currently serves on the board of directors of Insur I.Q. LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Richard G. Rathmann</I>,
age 53, became a member of our Board in March 2013 and serves as the Chairman of the Board and member of the Audit, Compensation,
and Nomination and Governance Committees. Mr.&nbsp;Rathmann served for the past eighteen years as a director of various for-profit
and non-profit companies.&nbsp;He has served as the manager of GBR Investments, LLC since 2005 and has served as the Executive
Director of the Rathmann Family Foundation since 2002. Mr.&nbsp;Rathmann received his bachelor&rsquo;s degree from the University
of Colorado and his juris doctor degree from Boston College Law School. Mr.&nbsp;Rathmann currently serves on the board of directors
of PIN Pharma, the Rathmann Family Foundation, and Cellerant Therapeutics, where he served as Chairman from 2007 to 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Ramkumar Mandalam,
Ph.D</I>., age 49, became a member of the Company&rsquo;s Board on June 16, 2014 and currently serves as a member of the Compensation
Committee and the Nomination and Governance Committee. Dr. Mandalam is the President and CEO of Cellerant Therapeutics, Inc., a
clinical stage biotechnology company developing novel cell-based and antibody therapies for cancer treatment and blood-related
disorders. Prior to joining Cellerant in 2005, he was the Executive Director of Product Development at Geron Corporation, a biopharmaceutical
company where he managed the development and manufacturing of cell based therapies for treatment of degenerative diseases and cancer.
From 1994 to 2000, he held various positions in research and development at Aastrom Biosciences, where he was responsible for programs
involving ex vivo expansion of human bone marrow stem cells and dendritic cells. Dr. Mandalam received his Ph.D. in Chemical Engineering
from the University of Michigan, Ann Arbor, Michigan. Dr. Mandalam is the author or co-author of several publications, patent applications,
and abstracts. The directors and officers of Cryoport hold office until their successors are elected and qualified, or until their
death, resignation, or removal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">None of the directors
or officers listed above has:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Had a bankruptcy petition
filed by or against any business of which that person was a general partner of executive officer either at the time of the bankruptcy
or within two years prior to that time;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -18.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Had any conviction in
a criminal proceeding, or been subject to a pending criminal proceeding;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -18.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Been subject to any order,
judgment, or decree by any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise
limiting such person&rsquo;s involvement in any type of business, securities or banking activities; and</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -18.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Been found by a court
of competent jurisdiction, the Commission, or the Commodity Futures Trading Commission to have violated a federal or state securities
or commodities law, or any law respecting financial institutions or insurance companies, or any law prohibiting mail or wire fraud
or fraud in connection with any business entity.</FONT></TD>
</TR></TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Director Independence</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company is quoted
on the Over-The-Counter Bulletin Board system, which does not require director independence requirements. However, for purposes
of determining director independence, we have applied the definitions set forth in NASDAQ Rule 5605(a)(2) which states, generally,
that a director is not considered to be independent if he or she is, or at any time during the past three years was an employee
of the Company; or if he or she (or his or her family member) accepted compensation from the Company in excess of $120,000 during
any twelve month period within the three years preceding the determination of independence. Our Board has affirmatively determined
that Mr.&nbsp;Mandalam, Mr.&nbsp;Rathmann, Mr.&nbsp;Zecchini and Mr.&nbsp;Berman are &ldquo;independent&rdquo; as such term is
defined under NASDAQ Rule 5605(a)(2) and the related rules of the Securities and Exchange Commission (the &ldquo;SEC&rdquo;). We
intend to maintain at least two independent directors on the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Committees of the Board
of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Board of Directors
has established an Audit Committee, a Compensation Committee and a Nomination and Governance Committee.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Audit Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The functions of the Audit
Committee are to (i)&nbsp;review the qualifications of the independent auditors, our annual and interim financial statements, the
independent auditor&rsquo;s report, significant reporting or operating issues and corporate policies and procedures as they relate
to accounting and financial controls; and (ii)&nbsp;to consider and review other matters relating to our financial and accounting
affairs. The Company&rsquo;s Board has a formally established Audit Committee and adopted an Audit Committee charter. The Audit
Committee&rsquo;s charter is available on the Company&rsquo;s website at www.cryoport.com under the tab &ldquo;Corporate Governance&rdquo;
which is found under the heading &ldquo;Company.&rdquo; Information on the website does not constitute a part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The current members of
the Audit Committee are Mr.&nbsp;Richard J. Berman, who is the Audit Committee Chairman, Mr.&nbsp;Richard G. Rathmann and Mr.&nbsp;Edward
J. Zecchini. The Company has determined that (i) Mr.&nbsp;Berman qualifies as an &ldquo;audit committee financial expert&rdquo;
as defined in Item 401(h) of Regulation S-K of the SEC rules and is &ldquo;independent&rdquo; within the meaning of NASDAQ Rule
5605(a)(2) and the related rules of the SEC, and (ii) Mr.&nbsp;Rathmann and Mr.&nbsp;Zecchini meet NASDAQ&rsquo;s financial literacy
and financial sophistication requirements and are &ldquo;independent&rdquo; within the meaning of NASDAQ Rule 5605(a)(2) and the
related rules of the SEC. During fiscal 2014, the Company&rsquo;s Audit Committee held four meetings during fiscal 2014. In addition,
the Audit Committee regularly held discussions regarding the consolidated financial statements of the Company during Board meetings.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Compensation
Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The purpose of the Compensation
Committee is to discharge the Board&rsquo;s responsibilities relating to compensation of the Company&rsquo;s directors and executive
officers, to produce an annual report on executive compensation for inclusion in the Company&rsquo;s Proxy Statement, as necessary,
and to oversee and advise the Board on the adoption of policies that govern the Company&rsquo;s compensation programs including
stock incentive and benefit plans. In May 2010, the Company&rsquo;s Board established the Compensation Committee. Previously, the
Committee was known as the &ldquo;Compensation and Governance Committee.&rdquo; The Compensation Committee&rsquo;s charter is available
on the Company&rsquo;s website at www.cryoport.com under the tab &ldquo;Corporate Governance&rdquo; which is found under the heading
&ldquo;Company.&rdquo; Information on the website does not constitute a part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The current members of
the Compensation Committee are Mr.&nbsp;Richard J. Berman, who is the Chairman, Mr.&nbsp;Richard G. Rathmann, Mr.&nbsp;Ramkumar
Mandalam, and Mr.&nbsp;Edward J. Zecchini, each of whom is independent under applicable independence requirements. Each of the
current members of the Compensation Committee is a &ldquo;non-employee director&rdquo; under Section&nbsp;16 of the Exchange Act
and an &ldquo;outside director&rdquo; for purposes of Section&nbsp;162(m) of the Internal Revenue Code of 1986, as amended (the
&ldquo;Code&rdquo;). The Compensation Committee met two times during fiscal year 2014.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Nomination and
Governance Committee</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In May 2010, the Company
established the Nomination and Governance Committee. The function of the Nomination and Governance Committee is to (i)&nbsp;make
recommendations to the Board regarding the size of the Board, (ii)&nbsp;make recommendations to the Board regarding criteria for
the selection of director nominees, (iii)&nbsp;identify and recommend to the Board for selection as director nominees individuals
qualified to become members of the Board, (iv)&nbsp;recommend committee assignments to the Board, (v)&nbsp;recommend to the Board
corporate governance principles and practices appropriate to the Company, and (vi)&nbsp;lead the Board in an annual review of its
performance. The Nomination and Governance Committee&rsquo;s charter is available on the Company&rsquo;s website at www.cryoport.com
under the tab &ldquo;Corporate Governance&rdquo; which is found under the heading &ldquo;Company.&rdquo; Information on the website
does not constitute a part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The current members of
the Nomination and Governance Committee are Mr.&nbsp;Edward J. Zecchini, who is the Chairperson, Mr.&nbsp;Richard J. Berman, Mr.&nbsp;Ramkumar
Mandalam, and Mr.&nbsp;Richard G. Rathmann. The Nomination and Governance Committee met two times during fiscal year 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">EXECUTIVE COMPENSATION</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Executive Officers of
the Company</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s current
executive officers are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Jerrell W. Shelton, age
69, became President and Chief Executive Officer of the Company on November 5, 2012. He served on the Board of Directors and standing
committees of Solera Holdings, Inc. from April 2007 through November 2011. From June 2004 to May 2006, Mr.&nbsp;Shelton was the
Chairman and CEO of Wellness, Inc., a provider of advanced, integrated hospital and clinical environments. Prior to that, he served
as CEO of IBM&rsquo;s WebFountain. From October 1998 to October 1999, Mr.&nbsp;Shelton was Chairman, President and CEO of NDC Holdings
II, Inc. Between October 1996 and July 1998, he was President and CEO of Continental Graphics Holdings, Inc. and from October 1991
to July 1996, Mr.&nbsp;Shelton served as President and CEO of Thomson Business Information Group. Mr.&nbsp;Shelton has a B.S. in
Business Administration from the University of Tennessee and an M.B.A. from Harvard University. Mr.&nbsp;Shelton currently serves
on the Advisory Board of Directors and the Nominating and Stewardship committee of the Smithsonian Institution Libraries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Robert S. Stefanovich,
age 50, became Chief Financial Officer, Treasurer and Corporate Secretary for the Company on June&nbsp;27, 2011 following the Company&rsquo;s
filing of its Form&nbsp;10&ndash;K for the fiscal year ended March&nbsp;31, 2011. From June 15, 2012 to November 4, 2012, Mr.&nbsp;Stefanovich
served as the Principal Executive Officer of the Company. From November&nbsp;2007 through March&nbsp;2011, Mr.&nbsp;Stefanovich
served as Chief Financial Officer of Novalar Pharmaceuticals, Inc., a venture-backed specialty pharmaceutical company. Prior to
that, he held several senior positions, including interim Chief Financial Officer of Xcorporeal, Inc., a publicly traded medical
device company, Executive Vice President and Chief Financial Officer of Artemis International Solutions Corporation, a publicly
traded software company, Chief Financial Officer and Secretary of Aethlon Medical Inc., a publicly traded medical device company
and Vice President of Administration at SAIC, a Fortune 500 company. Mr.&nbsp;Stefanovich also served as a member of the Software
Advisory Group and an Audit Manager with Price Waterhouse LLP&rsquo;s (now PricewaterhouseCoopers) hi-tech practice in San Jose,
CA and Frankfurt, Germany. He currently also serves as a board member of Project InVision International, a provider of business
performance improvement solutions. He received his Masters of Business Administration and Engineering from University of Darmstadt,
Germany.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_013"></A>SUMMARY COMPENSATION
TABLE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table contains
information with respect to the compensation for the fiscal years ended March&nbsp;31, 2014 and 2013 of our chief executive officer,
chief financial officer and former chief executive officer. We refer to the executive officers identified in this table as our
&ldquo;Named Executive Officers.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid">Name&nbsp;and&nbsp;Principal&nbsp;Position</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Fiscal&nbsp;<BR> Year</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Salary&nbsp;(1)&nbsp;<BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Bonus&nbsp;<BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option&nbsp;<BR> Awards&nbsp;(5)&nbsp;<BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All&nbsp;Other&nbsp;<BR> Compensation&nbsp;<BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total&nbsp;<BR> Compensation&nbsp;<BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 34%; text-align: left; text-indent: 0in">Jerrell W. Shelton</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: center">2014</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">300,000</TD><TD STYLE="width: 1%; text-align: left">(4)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">930,358</TD><TD STYLE="width: 1%; text-align: left">(3)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">1,230,358</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 9pt">President and Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,885</TD><TD STYLE="text-align: left">(9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">295,380</TD><TD STYLE="text-align: left">(7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,409</TD><TD STYLE="text-align: left">(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">422,674</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Robert S. Stefanovich</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,000</TD><TD STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">201,028</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">426,028</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 9pt">Chief Financial Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">225,000</TD><TD STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,652</TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">265,652</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Larry G. Stambaugh</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 9pt">Former President, Chief Executive Officer and Chairman</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,923</TD><TD STYLE="text-align: left">(2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">241,115</TD><TD STYLE="text-align: left">(10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">248,038</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 8.8pt; text-align: justify; text-indent: -8.8pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 7%; padding-left: 0; text-align: left"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 93%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This column represents salary as of the last payroll period prior to or immediately after March 31 of each fiscal year.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left"><font style="font-size: 10pt">(2)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">On August 21, 2009, the Compensation Committee approved an employment agreement with Mr.&nbsp;Stambaugh which had an effective commencement date of August 1, 2009, the details of which are described below. $57,794 and $360,000 were paid to Mr.&nbsp;Stambaugh in fiscal years 2013 and 2012, respectively, per the terms of the employment agreement. Mr.&nbsp;Stambaugh resigned as President, Chief Executive Officer and Chairman on April 5, 2012.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left"><font style="font-size: 10pt">(3)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents the fair value of all options granted to Mr.&nbsp;Shelton as compensation for services as a director and officer of the Company during fiscal year 2014. Based on the recommendation of the Compensation Committee and approval by the Board, on June 28, 2013, Mr.&nbsp;Shelton was granted an option to purchase 487,814 shares of common stock in connection with his engagement as Chief Executive Officer of the Company.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left"><font style="font-size: 10pt">(4)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents the annual base salary paid.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left"><font style="font-size: 10pt">(5)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This column represents the total grant date fair value of all stock options granted in the Company&rsquo;s fiscal year ended March 31, 2014 and the Company&rsquo;s fiscal year ended March 31, 2013. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For information on the valuation assumptions with respect to the grants made in fiscal years 2014 and 2013, refer to Note 2 &ldquo;<i>Summary of Significant Accounting Policies</i>&rdquo;<b> </b>in the accompanying consolidated financial statements.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 7%; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(6)</font></td>
    <TD STYLE="width: 93%; padding-left: 0; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents the fair value of all options granted to Mr.&nbsp;Stefanovich as compensation for services during fiscal years 2014 and 2013. Based on the recommendation of the Compensation Committee and approval by the Board, on June 28, 2013 and August 3, 2012, Mr.&nbsp;Stefanovich was granted an option to purchase 104,877 and 12,500 shares of common stock, respectively. The exercise prices of the options are equal to the fair value of the Company&rsquo;s stock as of the grant date.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(7)</font></td>
    <TD STYLE="padding-left: 0; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents the fair value of all options granted to Mr.&nbsp;Shelton as compensation for services as a director and officer of the Company during fiscal year 2013. Based on the recommendation of the Board, on October 22, 2012, Mr.&nbsp;Shelton was granted an option to purchase 12,500 shares of the Company&rsquo;s common stock upon joining the Board. Based on the recommendation of the Compensation Committee and approval by the Board, on November 5, 2012, Mr.&nbsp;Shelton was granted an option to purchase 206,250 shares of common stock in connection with his engagement as Chief Executive Officer of the Company</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(8)</font></td>
    <TD STYLE="padding-left: 0; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents board fees paid to Mr.&nbsp;Shelton as compensation for services as a director of the Company during fiscal year 2013 prior to becoming Chief Executive Officer of the Company.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(9)</font></td>
    <TD STYLE="padding-left: 0; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount reflects a pro-rated salary for Mr.&nbsp;Shelton who began employment with the Company on November 5, 2012.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 7%; padding-left: 0; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(10)</font></td>
    <TD STYLE="width: 93%; padding-left: 0; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">This amount represents $180,000 severance payment, $50,871 personal time off payout and $10,244 COBRA reimbursements to Mr.&nbsp;Stambaugh per the terms of his separation agreement.</font></td></tr>
</table>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Narrative Disclosure
to Summary Compensation Table</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Employment
Contracts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><I>Jerrell W. Shelton</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On November&nbsp;5, 2012,
the Company entered into an employment agreement (the &ldquo;Initial Agreement&rdquo;) with Mr.&nbsp;Shelton with respect to his
employment as President and Chief Executive Officer. The Initial Agreement provided a term of six months. The Initial Agreement
provided an initial annual base salary of $300,000 during the Term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition, on the date
of the Initial Agreement, Mr.&nbsp;Shelton was awarded two options giving him the right to acquire an aggregate of 206,250 shares
of the Company&rsquo;s common stock at an exercise price equal to the closing price of the Company&rsquo;s common stock on the
date of the Agreement, or $1.60 per share. The aggregate number of shares was determined by dividing $350,000 by the closing price
of the Company&rsquo;s common stock on the date of the Agreement, or $1.60 per share, and subtracting 12,500 shares, which is the
number of shares of common stock that Mr.&nbsp;Shelton was given the right to purchase pursuant to the option that was issued to
him in connection with his appointment to the Board of Directors on October&nbsp;22, 2012. The first option issued in connection
with the Agreement was issued under the Company&rsquo;s 2011 Stock Incentive Plan and provides Mr.&nbsp;Shelton the right to purchase
81,250 shares of the common stock of the Company, which is the maximum that may be awarded to Mr.&nbsp;Shelton in this fiscal year
under such plan. Mr.&nbsp;Shelton subsequently exercised 81,250 of these shares in May and November 2013. The second option provided
Mr.&nbsp;Shelton the right to purchase 125,000 shares of common stock of the Company and was granted outside of the Company&rsquo;s
incentive plans. The options vest in six equal monthly installments during the Term and expire at the earlier of (a)&nbsp;ten years
from the date of the Agreement, and (b)&nbsp;five (5)&nbsp;years from the date of the resignation and/or removal of the Mr.&nbsp;Shelton
as a member of the Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On June 28, 2013, after
the expiration of the Initial Agreement, the Company entered into a new employment agreement (the &ldquo;Agreement&rdquo;) with
Mr.&nbsp;Shelton with respect to his employment as President and Chief Executive Officer. The Agreement is effective through May
14, 2017 (the &ldquo;Term&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Agreement provides
an initial annual base salary of $300,000 during the Term. In addition, on the date of the Agreement, Mr.&nbsp;Shelton was awarded
options giving him the right to acquire an aggregate of 487,814 shares of the Company&rsquo;s common stock at an exercise price
equal to the closing price of the Company&rsquo;s common stock on the date of the Agreement, or $2.16 per share, and such options
were granted outside of the Company&rsquo;s incentive plans. The options vest immediately with respect to 20,326 shares and the
remaining right to purchase the remaining shares vest in equal monthly installments on the fifth day of each month for forty six
months beginning on July 5, 2013 and ending on May 5, 2017, provided that such vesting will be accelerated on the date that the
Company files a Form 10-Q or Form 10-K indicating an income from operations for the Company in two consecutive fiscal quarters
and immediately in the event of a change of control of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The options expire at
the earlier of (a) ten years from the date of the Agreement, and (b) twenty four (24) months from the date of the resignation and/or
removal of the Mr.&nbsp;Shelton as Chief Executive Officer of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Mr.&nbsp;Shelton has agreed
during the Term and for a period of one year following the termination of the Agreement not to solicit, induce, entice or attempt
to solicit, induce, or entice any employee of the Company to leave employment with the Company. Payments due to Mr.&nbsp;Shelton
upon a termination of his employment agreement are described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><I>Robert S. Stefanovich</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Although the Company does
not have a written employment agreement with Mr.&nbsp;Stefanovich, pursuant to the terms of his offer letter, the Company has agreed
to pay Mr.&nbsp;Stefanovich an annual base salary of $225,000 per year. In addition, he is eligible for an incentive bonus targeted
at 25% of his annual base salary. Mr.&nbsp;Stefanovich is eligible to participate in all employee benefits plans or arrangements
which may be offered by the Company during the term of his employment. The Company shall pay the cost of Mr.&nbsp;Stefanovich&rsquo;s
health insurance coverage in accordance with the Company&rsquo;s plans and policies while he is an employee of the Company. Mr.&nbsp;Stefanovich
is also eligible for fifteen (15)&nbsp;paid time-off days a year, and is entitled to receive fringe benefits ordinarily and customarily
provided by the Company to its senior officers. Payments due to Mr.&nbsp;Stefanovich upon a termination of his employment agreement
with the Company are described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><I>Larry G. Stambaugh
(former President and Chief Executive Officer)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On August&nbsp;21, 2009,
the Compensation Committee approved an employment agreement with Mr.&nbsp;Stambaugh, the Company&rsquo;s former Chief Executive
Officer, President and Chairman, which commenced effective as of August&nbsp;1, 2009 and continued in effect until April 5, 2012
(the &ldquo;Stambaugh Employment Agreement&rdquo;), the date of Mr.&nbsp;Stambaugh&rsquo;s resignation. Pursuant to the terms of
the Stambaugh Employment Agreement, Mr.&nbsp;Stambaugh was paid an annual base salary of $360,000. In connection with Mr.&nbsp;Stambaugh&rsquo;s
resignation as Chief Executive Officer and Chairman of the Board, the Company paid Mr.&nbsp;Stambaugh a lump sum severance payment
of $180,000 and extended the exercise period of two stock options granted to Mr.&nbsp;Stambaugh on September 10, 2010, with exercise
prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common stock vested as of April 5, 2012,
which amount to 45,279 and 26,250 shares of the Company&rsquo;s common stock, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company has no other
employment agreements with executive officers of the Company as of December 31, 2014.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_014"></A>OUTSTANDING EQUITY AWARDS
AT FISCAL YEAR END 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table shows
information regarding unexercised stock options held by our Named Executive Officers as of fiscal year ended March&nbsp;31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 98%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><b>&nbsp;</b></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><b>Name</b></P></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Number&nbsp;of </b></font><br>
<font style="font-size: 10pt"><b>Securities </b></font><br>
<font style="font-size: 10pt"><b>Underlying </b></font><br>
<font style="font-size: 10pt"><b>Unexercised </b></font><br>
<font style="font-size: 10pt"><b>Options </b></font><br>
<font style="font-size: 10pt"><b>(#) </b></font><br>
<font style="font-size: 10pt"><b>Exercisable</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Number&nbsp;of </b></font><br>
<font style="font-size: 10pt"><b>Securities </b></font><br>
<font style="font-size: 10pt"><b>Underlying </b></font><br>
<font style="font-size: 10pt"><b>Unexercised </b></font><br>
<font style="font-size: 10pt"><b>Options </b></font><br>
<font style="font-size: 10pt"><b>(#) </b></font><br>
<font style="font-size: 10pt"><b>Unexercisable</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Equity </b></font><br>
<font style="font-size: 10pt"><b>Incentive </b></font><br>
<font style="font-size: 10pt"><b>Plan&nbsp;Awards </b></font><br>
<font style="font-size: 10pt"><b>Number&nbsp;of </b></font><br>
<font style="font-size: 10pt"><b>Securities </b></font><br>
<font style="font-size: 10pt"><b>Underlying </b></font><br>
<font style="font-size: 10pt"><b>Unexercised </b></font><br>
<font style="font-size: 10pt"><b>Unearned </b></font><br>
<font style="font-size: 10pt"><b>Options </b></font><br>
<font style="font-size: 10pt"><b>(#)</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Option </b></font><br>
<font style="font-size: 10pt"><b>Exercise </b></font><br>
<font style="font-size: 10pt"><b>Price </b></font><br>
<font style="font-size: 10pt"><b>($)</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Option </b></font><br>
<font style="font-size: 10pt"><b>Expiration </b></font><br>
<font style="font-size: 10pt"><b>Date</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 35%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Jerrell W. Shelton</font></td>
    <TD STYLE="width: 0%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">12,500</font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 11%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="width: 10%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">1.52</font></td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in; width: 10%"><font style="font-size: 10pt">10/21/22</font></td>
    <TD NOWRAP STYLE="width: 1%; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">125,000</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(2)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">1.60</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">11/4/22</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">111,791</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(3)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">376,023</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(3)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">2.16</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6/27/23</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Robert Stefanovich</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">9,766</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(4)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">5,859</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(4)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6.88</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6/19/21</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(5)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">5,000</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(5)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">3.44</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">8/2/22</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">2,813</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(6)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">4,687</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(6)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">3.44</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">8/2/22</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">19,665</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(7)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">85,212</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(7)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">2.16</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">6/27/23</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Larry Stambaugh</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">45,279</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(8)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">5.28</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">4/5/17</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(10)</font></td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">26,250</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(9)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(9)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">$</font></td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">5.28</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: right; text-indent: 0in"><font style="font-size: 10pt">4/5/17</font></td>
    <TD NOWRAP STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">(10)</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Based on the recommendation
of the Compensation Committee and approval by the Board, Mr.&nbsp;Shelton was granted an option to purchase 12,500 shares of common
stock exercisable at $1.52 per share on October 22, 2012 upon joining the board of directors. Options vest in twelve equal monthly
installments. The exercise price for shares of common stock pursuant to the options is equal to the fair value of the Company&rsquo;s
stock as of the grant date.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in">&nbsp;</P>


<!-- Field: Page; Sequence: 67; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->63<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(2)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Shelton
was granted an option to purchase 206,250 shares of common stock exercisable at $1.60 per share on November 5, 2012, which vests
in six equal monthly installments. 81,250 of these options were issued under the 2011 stock option plan and exercised in May and
November 2013 and 125,000 were issued outside of a plan. The exercise price for shares of common stock pursuant to the option is
equal to the fair value of the Company&rsquo;s stock as of the grant date.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(3)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Shelton
was granted an option to purchase 487,814 shares of common stock exercisable at $2.16 per share on June 28, 2013. The option vests
2/48<SUP>th</SUP> immediately with the remainder vesting 1/48<SUP>th </SUP>per month for 46 months. The exercise price for the
shares of common stock pursuant to the option is equal to the fair value of the Company&rsquo;s stock on the date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(4)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stefanovich
was granted an option to purchase 15,625 shares of common stock exercisable at $6.88 per share on June 20, 2011. The option vests
in six month installments over a four year period. The exercise price for the shares of common stock pursuant to the option is
equal to the fair value of the Company&rsquo;s stock on the date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(5)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stefanovich
was granted an option to purchase 5,000 shares of common stock exercisable at $3.44 per share on August 3, 2012. The option vests
based on certain performance criteria. The exercise price for the shares of common stock pursuant to the option is equal to the
fair value of the Company&rsquo;s stock on the date of grant</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(6)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stefanovich
was granted an option to purchase 7,500 shares of common stock exercisable at $3.44 per share on August 3, 2012. The option vests
in six month installments over a four year period. The exercise price for the shares of common stock pursuant to the option is
equal to the fair value of the Company&rsquo;s stock on the date of grant</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(7)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stefanovich
was granted an option to purchase 104,877 shares of common stock exercisable at $2.16 per share on June 28, 2013. The options vest
in equal monthly installments over four years. The exercise price for the shares of common stock pursuant to the option is equal
to the fair value of the Company&rsquo;s stock on the date of grant.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(8)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stambaugh
was granted an option to purchase 45,279 shares of common stock exercisable at $5.28 per share on September 15, 2010, in lieu of
payment of his fiscal year 2010 cash bonus of $216,000. The option was fully vested at date of grant. The exercise price for shares
of common stock pursuant to the option is equal to the fair value of the Company&rsquo;s stock as of the grant date.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(9)</TD><TD STYLE="text-align: justify">Based on the recommendation of the Compensation Committee and approval by the Board, Mr.&nbsp;Stambaugh
was granted an option to purchase 52,500 shares of common stock exercisable at $5.28 per share on September 15, 2010. The right
to exercise the stock option vested as to 25% of the underlying shares of common stock upon grant, with the remaining underlying
shares vesting in equal installments on the first, second and third anniversary of the grant date. The exercise price for shares
of common stock pursuant to the option is equal to the fair value of the Company&rsquo;s stock as of the grant date.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.35in">(10)</TD><TD STYLE="text-align: justify">In connection with Mr.&nbsp;Stambaugh&rsquo;s resignation as Chief Executive Officer and Chairman
of the Board, which was effective on April 5, 2012, the Company extended the exercise period of two stock options granted to Mr.&nbsp;Stambaugh
on September 10, 2010, with exercise prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common
stock vested as of April 5, 2012, which amount to 45,279 and 26,250 shares of the Company&rsquo;s common stock, respectively.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0">Potential
Payments On Termination Or Change In Control</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Pursuant to Mr.&nbsp;Shelton&rsquo;s
employment agreement, if Mr.&nbsp;Shelton terminates the Agreement, dies, or is terminated for &ldquo;Cause&rdquo; (as defined
in the agreement), he will be entitled to all compensation and benefits that he earned through the date of termination. If he is
terminated for Cause, the Company may, to the extent allowed by law, set off losses, fines or damages that he has caused as a result
of his misconduct. If he is terminated &ldquo;without cause&rdquo; (as defined in the agreement), he will be entitled to a continuation
of his base salary for three months following termination and one half of unvested options as of date of termination shall become
fully vested. In the event the Company terminates his employment, except if for &ldquo;Cause&rdquo; (as defined in the agreement),
within twelve (12) months after a Change in Control (as defined in the Cryoport, Inc. 2011 Stock Incentive Plan), then, Mr.&nbsp;Shelton
will be entitled to: (i) the continuation of his base salary for twelve (12) months following the date of termination, which shall
be paid in accordance with the Company&rsquo;s ordinary payroll practices in effect from time to time, and which shall begin on
the first payroll period immediately following the date on which the general release and waiver becomes irrevocable; and (ii)&nbsp;all
options previously granted to Mr.&nbsp;Shelton will become fully vested and exercisable as of the date of termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Pursuant to Mr.&nbsp;Stefanovich&rsquo;s
employment offer, in the event that Mr.&nbsp;Stefanovich&rsquo;s employment with the Company is terminated as a result of a &ldquo;change
of control,&rdquo; as is defined in the Company&rsquo;s 2009 Stock Incentive Plan, he will be entitled to receive a severance payment
equal to twelve months of his base salary, continuation of health benefits for a period of twelve months, and the unvested portion
of his stock option grants immediately shall vest in full. Separately, in the event his employment is terminated by the Company
for reasons other than cause, Mr.&nbsp;Stefanovich will be entitled to receive a severance payment equal to six months of his base
salary plus continuation of health benefits for a period of six months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with Mr.&nbsp;Stambaugh&rsquo;s
resignation as Chief Executive Officer and Chairman of the Board, which was effective on April 5, 2012, the Company paid Mr.&nbsp;Stambaugh
a lump sum severance payment of $180,000 and extended the exercise period of two stock options granted to Mr.&nbsp;Stambaugh on
September 10, 2010, with exercise prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common
stock vested as of April 5, 2012, which amount to 45,279 and 26,250 shares of the Company&rsquo;s common stock, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2002 Plan, 2009 Plan
and 2011 Plan each provide that in the event of a &ldquo;change of control,&rdquo; the applicable option agreement may provide
that such options or shares will become fully vested and may be immediately exercised by the person who holds the option, at the
discretion of the board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company does not provide
any additional payments to named executive officers upon their resignation, termination, retirement, or upon a change of control.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_015"></A>DIRECTOR COMPENSATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Compensation for the Board
is governed by the Company&rsquo;s Compensation Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B><I>Director Fees</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Effective August&nbsp;21,
2009 through May&nbsp;2, 2012 the fees payable to non-employee directors were set at a flat fee of $15,000 per quarter with no
additional fees payable for committee membership or serving as chairman of a committee. Effective May&nbsp;3, 2012, the cash compensation
that each non-employee director is paid is $40,000 annually, except for the non-employee Chairman of the Board who is paid $56,000
annually. In addition, each non-employee director who serves as Chairman of one or more Board Committees will be paid additional
cash compensation of $8,000 annually for all Committee Chairmanships.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Effective January 1, 2015,
the compensation plan for non-employee directors was changed as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Director fees will be
paid in cash, restricted shares of the Company&rsquo;s common stock or a combination thereof, at the option of the director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Option 1: Cash compensation
of $40,000, paid quarterly,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Option 2: Cash compensation
of $13,000, paid quarterly and $27,000 converted into common stock using the volume weighted average price (VWAP) of the stock
for the last five days of the trading month ending each quarter, plus an annual grant of options, on the date of the Company&rsquo;s
annual meeting, to purchase 25,000 shares of the Company&rsquo;s common stock; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Option 3: No cash compensation
but $40,000 converted into common stock using the volume weighted average price (VWAP) of the stock for the last five days of the
trading month ending each quarter and paid quarterly. This option carries a 15% premium, as there is no cash outlay to the Company.
The calculation would be $40,000 X 1.15 = $46,000 / VWAP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition to the compensation
options above the following compensation applies to non-employee directors chairing a Board committee. This compensation will be
paid on the same basis as the Director chose from the options described above:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 23.1pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif; margin-left: 24.5pt">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: justify; text-indent: 0in">Chairman/Lead Director</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">25,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Audit Committee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">20,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in">Compensation Committee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Nominating and Corporate Governance Committee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 23.1pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 23.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0"><B><I>Director Stock Option
Grants</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Effective May&nbsp;3,
2012, each non-employee director was awarded a stock option to purchase 6,250 shares of the Company&rsquo;s common stock on the
date of the Company&rsquo;s annual meeting of stockholders, except for the non-employee Chairman of the Board who is awarded a
stock option to purchase 10,000 shares of the Company&rsquo;s common stock. In addition, each new non-employee director will be
granted a stock option to purchase 12,500 shares of the Company&rsquo;s common stock upon joining the Board. Effective January
1, 2015, each new non-employee director is granted stock options to purchase 25,000 shares of the Company&rsquo;s common stock
upon appointment to the Board. In addition, each non-employee director will receive an annual grant of stock options on the date
of the Company&rsquo;s annual meeting of stockholders to purchase 25,000 shares of the Company&rsquo;s common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On May 3, 2012, Mr.&nbsp;Adam
M. Michelin, a former director, was granted options to purchase a total of 7,500 shares of the Company&rsquo;s common stock with
an exercise price of $3.52 per share which vested on September 22, 2012 for his service as a director, Chairman of the Audit Committee,
and as a member of the Compensation Committee and the Nomination and Governance Committee during fiscal 2012 and fiscal 2013 and
Lead Independent Director during fiscal 2012. The options to purchase a total of 4,375 shares were issued in connection with the
services he provided during fiscal 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On May 3, 2012, Mr.&nbsp;Stephen
E. Wasserman, a former director, was granted options to purchase a total of 17,295 shares of the Company&rsquo;s common stock with
an exercise price of $3.52 per share which vested on March 29, 2013 for his service as a director, Chairman of the Board and member
of the Compensation Committee, Audit Committee and Governance and Nominating Committee during fiscal 2012 and fiscal 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On May 3, 2012, Ms. Karen
Muller, a former director, was granted options to purchase a total of 20,805 shares of the Company&rsquo;s common stock with an
exercise price of $3.52 per share of which 14,555 shares immediately vested and the remaining 6,250 shares vested on September
22, 2012 for her service as a director, Chairman of the Compensation Committee and Nomination and Governance Committee, and a member
of the Audit Committee during fiscal 2012 and fiscal 2013. The options to purchase a total of 15,972 shares were issued in connection
with the services she provided during fiscal 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On July 12, 2012, Mr.&nbsp;Michelin,
Mr.&nbsp;Wasserman, and Ms. Muller were each granted an option to purchase 12,500 shares of the Company&rsquo;s common stock with
an exercise price of $2.88 per share which were fully vested upon issuance for their service as the Office of the Chief Executive
for the months of April, May, and June 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Annual awards were granted
at the shareholders meeting on September 13, 2012. Mr.&nbsp;Michelin, Ms. Muller and Mr.&nbsp;Wasserman were each granted an option
to purchase 6,250, 6,250 and 10,000 shares, respectively, of the Company&rsquo;s common stock with an exercise price of $2.40 per
share</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On October 9, 2012, Mr.&nbsp;Michelin,
Mr.&nbsp;Wasserman, and Ms. Muller were each granted an option to purchase 15,625 shares of the Company&rsquo;s common stock with
an exercise price of $1.36 per share which were fully vested upon issuance for their service as the Office of the Chief Executive
for the months of July, August and September 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On December 12, 2012,
Mr.&nbsp;Michelin, Mr.&nbsp;Wasserman, and Ms. Muller were each granted an option to purchase 6,250, 12,500 and 12,500 shares,
respectively, of the Company&rsquo;s common stock with an exercise price of $1.44 per share which were fully vested upon issuance
for their service as the Office of the Chief Executive for the month of October and part of November 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Annual awards were granted
at the shareholders meeting on September 6, 2013. Mr.&nbsp;Rathmann and Mr.&nbsp;Wasserman were each granted an option to purchase
10,000 and 6,250 shares, respectively, of the Company&rsquo;s common stock with an exercise price of $3.04 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On September 13, 2013,
Mr.&nbsp;Zecchini was granted an option to purchase 12,500 shares of the Company&rsquo;s common stock with an exercise price of
$3.20 per share when he joined the board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On June 16, 2014, Dr.
Mandalam was granted an option to purchase 12,500 shares of the Company&rsquo;s common stock, with an exercise price of $3.60 per
share when he joined the board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Annual awards were granted
at the shareholders meeting on August 29, 2014. Mr.&nbsp;Rathmann, Mr.&nbsp;Zecchini and Mr.&nbsp;Mandalam were each granted an
option to purchase 10,000, 6,250 and 6,250 shares, respectively, of the Company&rsquo;s common stock with an exercise price of
$3.36 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On January 12, 2015, Mr.&nbsp;Berman
was granted an option to purchase 25,000 shares of the Company&rsquo;s common stock, with an exercise price of $3.04 per share
when he joined the board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth the director compensation of the non-employee directors of the Company during fiscal year 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Name</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fees&nbsp;Earned <BR> Or&nbsp;Paid&nbsp;in <BR> Cash <BR> ($)(1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Stock <BR> Awards <BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Option <BR> Awards <BR> ($)(2)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">All&nbsp;Other <BR> Compensation <BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total <BR> ($)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: justify; text-indent: -8.8pt; padding-left: 8.8pt">Richard Rathmann</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">56,445</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">26,300</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">82,745</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -8.8pt; padding-left: 8.8pt"><font style="font-size: 10pt">Stephen Wasserman<sup>(3)</sup></font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,438</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">68,546</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -8.8pt; padding-left: 8.8pt">Edward Zecchini</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,632</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">61,032</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -8.8pt; padding-left: 8.8pt"><font style="font-size: 10pt">Adam M. Michelin<sup>(4)</sup></font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -8.8pt; padding-left: 8.8pt"><font style="font-size: 10pt">Karen Muller<sup>(4)</sup></font></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Fees earned or paid in cash as shown in this schedule
represent payments and accruals for directors&rsquo; services earned during fiscal year 2014.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">This column represents the total grant date fair value
of all stock options granted in fiscal 2014. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions. For information on the valuation assumptions with respect to the grants made in fiscal
2014, refer to Note 2 &ldquo;<I>Summary of Significant Accounting Policies&rdquo; </I>in the accompanying consolidated financial
statements.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left">(3)</TD><TD STYLE="text-align: justify">Mr.&nbsp;Stephen Wasserman served as director of the
Company through the Company&rsquo;s annual meeting of stockholders on August 29, 2014.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in; text-align: left">(4)</TD><TD STYLE="text-align: justify">Mrs. Muller and Mr.&nbsp;Michelin served as directors
of the Company through the Company&rsquo;s annual meeting of stockholders on September 6, 2013.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_016"></A>COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">None.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><A NAME="a_017"></A>SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth information with respect to the beneficial ownership of the Company&rsquo;s common stock as of March 12, 2015, by each person
or group of affiliated persons known to the Company to beneficially own 5% or more of its common stock, each director, each named
executive officer, and all of its directors and named executive officers as a group. As of March 12, 2015, there were 7,538,364
shares of common stock outstanding. Unless otherwise indicated, the address of each beneficial owner listed below is c/o Cryoport,
Inc., 20382 Barents Sea Circle, Lake Forest, CA 92630.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table gives
effect to the shares of common stock issuable within 60 days of March 12, 2015, upon the exercise of all options and other rights
beneficially owned by the indicated stockholders on that date. The table reflects the anticipated 8-to-1 reverse stock split. Unless
otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares beneficially
owned.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 88%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Beneficial Owner</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares <BR> of Preferred Stock <BR> Beneficially&nbsp;Owned</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of <BR>
Shares <BR> of Common<BR>
 Stock <BR> Beneficially<BR>
Owned(2)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percentage&nbsp;of&nbsp;Shares <BR> of Common Stock <BR> Beneficially <BR> Owned(5)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Executive Officers and Directors:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 37%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Jerrell W. Shelton</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">15,481</TD><TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">616,374</TD><TD NOWRAP STYLE="width: 1%; text-align: left">(1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">7.6</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Robert S. Stefanovich</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">75,595</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Richard Rathmann</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,543</TD><TD NOWRAP STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">573,635</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7.3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Edward Zecchini</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,021</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10pt">*</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Ramkumar Mandalam Ph.D.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,938</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10pt">*</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Richard Berman</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,250</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><font style="font-size: 10pt">*</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">All directors and named executive officers as a group (6 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,305,813</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15.3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other Stockholders:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cranshire Capital Master Fund(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">431,204</TD><TD NOWRAP STYLE="text-align: left">(1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.4</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Total for all Directors, Executive Officers and Other Stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,737,017</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19.4</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0.2in">&nbsp;</P>


<!-- Field: Page; Sequence: 71; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0.2in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Represents less than
1%</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Includes shares which
individuals shown above have the right to acquire as of March 12, 2015, or within 60&nbsp;days thereafter, pursuant to outstanding
stock options, warrants and/or preferred stock as follows: Mr.&nbsp;Shelton&mdash;530,570 shares; Mr.&nbsp;Stefanovich&mdash;75,595
shares; Mr.&nbsp;Rathmann&mdash;335,465 of which 95,070 are individually owned by Mr.&nbsp;Rathmann and 238,137 are owned by GBR
Investments, LLC of which Mr.&nbsp;Rathmann is the manager; Mr.&nbsp;Zecchini&mdash;18,021; Dr. Mandalam&mdash;15,938 shares;
Mr.&nbsp;Berman&mdash;6,250 shares and Cranshire Capital&mdash;431,204 shares.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The number and percentage
of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information
is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any
shares as to which the selling security holder has sole or shared voting power or investment power and also any shares which the
selling security holder has the right to acquire within 60 days. Includes preferred stock on an as-converted basis of 30 shares
of common stock for each share of preferred stock.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Cranshire Capital Master
Fund, Ltd. address is 3100 Dundee Road, Suite 703, Northbrook, IL 60062.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">GBR Investments, LLC
of which Mr.&nbsp;Rathmann is the manager.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: -0.3in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.35in; text-align: left"><FONT STYLE="font-size: 10pt">(5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Includes preferred stock on an as-converted basis per the
                                                                                                                    conversion terms of the preferred stock.</FONT></TD>
</TR></TABLE>
<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Equity Compensation
Plan Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently maintain
three equity compensation plans, referred to as the 2002 Stock Incentive Plan (the &ldquo;2002 Plan&rdquo;), the 2009 Stock Incentive
Plan (the &ldquo;2009 Plan&rdquo;) and the 2011 Stock Incentive Plan (the &ldquo;2011 Plan&rdquo;). Our Compensation Committee
is responsible for making, reviewing and recommending grants of options and other awards under these plans which are approved by
the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2002 Plan, which was
approved by our stockholders in October 2002, allows for the grant of options to purchase up to 62,500 shares of the Company&rsquo;s
common stock. The 2002 Plan provides for the granting of options to purchase shares of our common stock at prices not less than
the fair market value of the stock at the date of grant and generally expire 10 years after the date of grant. The stock options
are subject to vesting requirements, generally three or four years. The 2002 Plan also provides for the granting of restricted
shares of common stock subject to vesting requirements. The 2002 Plan has expired as of October 2012, and thus no shares are available
for future issuances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2009 Plan, which was
approved by our stockholders at our 2009 Annual Meeting of Stockholders held on October&nbsp;9, 2009, provides for the grant of
stock-based incentives. The 2009 Plan allows for the grant of up to 150,000 shares of our common stock for awards to our officers,
directors, employees and consultants. The 2009 Plan provides for the grant of incentive stock options, nonqualified stock options,
restricted stock rights, restricted stock, performance share units, performance shares, performance cash awards, stock appreciation
rights, and stock grant awards. The 2009 Plan also permits the grant of awards that qualify for the &ldquo;performance-based compensation&rdquo;
exception to the $1,000,000 limitation on the deduction of compensation imposed by Section&nbsp;162(m) of the Code. As of March
12, 2015, a total of 37,971 shares of our common stock remained available for future grants under the 2009 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The 2011 Plan, as amended,
which was approved by our stockholders at our 2011 Annual Meeting of Stockholders held on September&nbsp;22, 2011 and, with respect
to the amendments, at our 2012, 2013 and 2014 Annual Meeting of Stockholders held on September 13, 2012, September 6, 2013 and
August 29, 2014, respectively, provides for the grant of stock-based incentives. The 2011 Plan allows for the grant of up to 1,737,500
shares of our common stock for awards to our officers, directors, employees and consultants. The 2011 Plan provides for the grant
of incentive stock options, nonqualified stock options, restricted stock rights, restricted stock, performance share units, performance
shares, performance cash awards, stock appreciation rights, and stock grant awards. The 2011 Plan also permits the grant of awards
that qualify for the &ldquo;performance-based compensation&rdquo; exception to the $1,000,000 limitation on the deduction of compensation
imposed by Section&nbsp;162(m) of the Code. Awards may be granted under the 2011 Plan until September&nbsp;21, 2021 or until all
shares available for Awards under the 2011 Plan have been purchased or acquired unless the stockholders of the Company vote to
approve an extension of the 2011 Plan prior to such expiration date. As of March 12, 2015, a total of 305,123 shares remained available
for future grants under the 2011 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In addition to the stock
options issued pursuant to the Company&rsquo;s three stock incentive plans, the Company has granted warrants to employees, officers,
non-employee directors and consultants. The warrants are generally not subject to vesting requirements and have ten-year terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth certain information as of December 31, 2014 concerning the Company&rsquo;s common stock that may be issued upon the exercise
of options or warrants or pursuant to purchases of stock under the 2002 Plan, the 2009 Plan, the 2011 Plan and other stock based
compensation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">Plan Category</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(a)<BR> &nbsp;Number&nbsp;of&nbsp;Securities<BR> &nbsp;to be Issued Upon the<BR> &nbsp;Exercise of<BR> &nbsp;Outstanding Options<BR> &nbsp;and Warrants</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(b)<BR> &nbsp;Weighted-Average<BR> &nbsp;Exercise Price of<BR> &nbsp;Outstanding<BR> &nbsp;Options and<BR> &nbsp;Warrants</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">(c)<BR> Available&nbsp;for&nbsp;Future<BR> Issuance&nbsp;Under&nbsp;Equity<BR> Compensation Plans<BR> (Excluding Securities<BR> Reflected&nbsp;in&nbsp;Column&nbsp;(a))</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 37%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Equity compensation plans approved by stockholders</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">1,454,320</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">3.49</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">361,220</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.25in; padding-left: 0.25in"><font style="font-size: 10pt">Equity compensation plans not approved by stockholders<sup>(1)</sup></font></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,245,180</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">4.13</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 10pt">N/A</font></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,699,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">361,220</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">During November 5, 2012 through December 31, 2014, a total of 1,212,322 options were granted to employees outside of an option plan. In the past the Company has issued warrants to purchase 40,927 shares of common stock in exchange for services provided to the Company, of which warrants to purchase 32,857 shares of common stock are outstanding. The exercise prices ranged from $22.40 to $86.40 and generally vested upon issuance. Fifteen consultants and former officers and directors received warrants to purchase 40,927 shares of common stock in this manner.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.3in; text-align: justify; text-indent: 0.3in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Change in
Control Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">There are no understandings,
arrangements or agreements known by management at this time which would result in a change in control of the Company or any subsidiary.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_018"></A>CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company has established
policies and other procedures regarding approval of transactions between the Company and any employee, officer, director, and certain
of their family members and other related persons, including those required to be reported under Item&nbsp;404 of Regulation S-K.
These policies and procedures are generally not in writing, but are evidenced by long standing principles set forth in our Code
of Conduct or adhered to by our Board. As set forth in the Audit Committee Charter, the Audit Committee reviews and approves all
related-party transactions after reviewing such transaction for potential conflicts of interests and improprieties. Accordingly,
all such related-party transactions are submitted to the Audit Committee for ongoing review and oversight. Generally speaking,
we enter into related-party transactions only on terms that we believe are at least as favorable to our company as those that we
could obtain from an unrelated third party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following related-party
transaction were approved or ratified by at least two independent directors and future material affiliated transactions will be
approved by a majority of the independent directors who do not have an interest in the transaction and who had access, at the issuer&rsquo;s
expense, to issuer&rsquo;s or independent legal counsel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">On May 9, 2013, Richard
Rathmann, Director, invested $100,000 in the Bridge Notes offered by the Company to certain accredited investors. For information
on terms related to the Bridge Notes, refer to Note 8 &ldquo;Convertible Debentures Payable&rdquo; in the accompanying March 31,
2014 consolidated financial statements.&nbsp; In addition, on July 12, 2013, GBR Investments, LLC, invested $100,000 in the Bridge
Notes offered by the Company to certain accredited investors and also received a warrant to purchase 50,000 shares of common stock
at an exercise price of $2.00 per share, pursuant to the terms of such offering. Richard Rathmann is the Manager of GBR Investments,
LLC and is considered an indirect beneficial owner of these securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During the year ended
March 31, 2014, the Company issued to certain accredited investors various unsecured promissory notes with the terms as described
under Note 7 in the accompanying March 31, 2014 consolidated financial statements. These unsecured promissory notes included $120,000
of the 5% Bridge Notes issued to Jerrell Shelton, the Company&rsquo;s Chief Executive Officer, $100,000 of the Bridge Notes issued
to Richard Rathmann, a member of the Board of Directors of the Company, $200,000 of the Bridge Notes and $100,000 of the 5% Bridge
Notes issued to GBR Investments, LLC, of which Richard Rathmann, is the manager. In May 2014, both note holders elected to convert
all principal and interest into a newly established Class A Convertible Preferred Stock and warrants to purchase common stock of
Cryoport as further described in Note 15 in the accompanying March 31, 2014 consolidated financial statements. In November 2014,
both Mr. Shelton and GBR Investments, LLC participated in the Class A convertible preferred stock offering and the Company issued
4,167 shares of Class A convertible preferred stock each in exchange for an aggregate amount of $100,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">As of March 12, 2015,
we had an aggregate principal balance of $1.3 million, in unsecured indebtedness owed to five related parties, including four former
members of the Board of Directors, representing working capital advances made to us from February 2001 through March 2005. Accrued
interest related to these notes amounted to $1,636 as of March 12, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In March 2015, we entered
into definitive agreements relating to the exchange or amendment of the notes evidencing such working capital advances. Three of
the notes, which as of March 12, 2015 had an outstanding principal balance of $923,791, were amended and the holders received warrants
for the purchase 56,021, 33,336, and 26,118 shares, respectively, of the our common stock at an exercise price of $4.00 per
share, exercisable on March 2, 2015 and expiring on March 1, 2020, and warrants to purchase 1,250, 625, and 625 shares, respectively,
of the our common stock, exercisable on March 2, 2015 and expiring on March 1, 2020, to reimburse the three note holders for any
fees or other expenses incurred in connection with this transaction. The notes, as amended, require interest payments on a calendar
quarterly basis and all outstanding principal and accrued interest on the maturity date, which is the earlier to occur of (i) March
1, 2016, (ii) the sale of all or substantially all of our assets, or (iii) the merger, consolidation or other similar reorganization
of the Company or an affiliate of our Company with another entity. Under the terms of such note, upon the closing of a public offering
pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $5,000,000
of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of Common Stock among
the sale of other securities, the holder has the option to convert into the securities issued in such offering at a twenty percent
(20%) to the price per share (or per unit, if applicable) of the securities issued by the Company in such offering. The securities
issued to the holder upon conversion will be restricted securities and are not being registered pursuant to this registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One note was exchanged
for (i) a new convertible promissory note with an original principal amount equal to the outstanding principal and interest of
the original note, and (ii) a warrant to purchase 2,235 shares of the Registrant&rsquo;s Common Stock at an exercise price of
$4.00 per share, exercisable on February 20, 2015 and expiring on February 19, 2018. The new note, which as of March 12, 2015
had an outstanding principal balance of $35,761, requires interest payments on a calendar quarterly basis and all outstanding
principal and accrued interest on the maturity date, which is March 1, 2016. Under the terms of such note, upon the closing of
a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at
least $5,000,000 of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of
Common Stock among the sale of other securities, the holder has the option to convert into the securities issued in such offering
at a twenty percent (20%) to the price per share (or per unit, if applicable) of the securities issued by the Company in such
offering. The securities issued to the holder upon conversion will be restricted securities and are not being registered pursuant
to this registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One note, which as of March 12, 2015 had an outstanding principal balance of $338,452, as amended,
now provides for interest at a rate of 6% per annum commencing on March 13, 2015; however, no interest payments will be due if
no event of default occurs and if the Company (i) complies with its regular payment obligations, reimburses the payee for
attorneys&rsquo; fees in connection with the negotiation of the Note Amendment, up to a maximum amount of $1,000, on the later
of (A) March 13, 2015, or (B) three (3) days after receiving written notice from the payee of the amount of attorneys&rsquo; fees
incurred by payee, and (iii) the Company immediately pays all unpaid amounts due and payable in full before the earlier of
May 1, 2016 or at the same time that payee(s) of any other promissory note(s) with the Company that were issued in 2005 are
paid in full before May 1, 2016, other than (Y) notes that are satisfied upon conversion into common stock, warrants or any other
equity of the Company, or (Z) notes that have been paid in full before March 2, 2015. All principal and interest under the
Original Note, as amended by the Note Amendment, will be due and shall be paid on May 1, 2016. The note requires monthly payments
of $20,000, except for the month of June 2015, where the monthly payment is $70,000.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Section 16(a) of the Exchange
Act requires the Company&rsquo;s directors and executive officers, and persons who own more than 10% of a registered class of the
Company&rsquo;s equity securities, to file with the SEC reports of beneficial ownership and reports of changes in beneficial ownership
in the Company&rsquo;s securities. Such directors, executive officers and 10% stockholders are also required to furnish the Company
with copies of all Section 16(a) forms they file.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Based solely on a review
of the copies of such forms received by it, the Company believes that during fiscal year 2014, all Section 16(a) filings applicable
to its directors, officers, and 10% stockholders were filed on a timely basis.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_019"></A>DESCRIPTION OF SECURITIES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our authorized capital
consists of 250,000,000 shares of common stock, $0.001 par value per share, of which 7,538,364 shares of common stock were issued
and outstanding as of March 12, 2015, and 2,500,000 shares of &ldquo;blank check&rdquo; preferred stock, $0.001 par value per share,
of which 800,000 shares have been designated as Class A Convertible Preferred Stock and 400,000 shares have been designated as
Class B Convertible Preferred Stock. 454,750 shares of Class&nbsp;A Convertible Preferred Stock and 26,134 shares of Class B Convertible
Preferred Stock were issued and outstanding as of March 12, 2015. Upon the closing of this offering, the outstanding Class A Convertible
Preferred Stock and the Class B Convertible Preferred Stock will automatically convert into common stock and warrants. The following
description is a summary and is qualified in its entirety by our Amended and Restated Articles of Incorporation and Bylaws as currently
in effect, copies of which are referenced as exhibits herein, and the provisions of the Nevada Revised Statutes.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Common Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Subject to the preferential
rights of any outstanding preferred stock, each holder of common stock is entitled to receive ratable dividends, if any, as may
be declared by the Board of Directors out of funds legally available for the payment of dividends. As of the date of this prospectus,
we have not paid any dividends on our common stock, and none are contemplated in the foreseeable future. We anticipate that all
earnings that may be generated from our operations will be used to finance our growth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Holders of common stock
are entitled to one vote for each share held of record. There are no cumulative voting rights in the election of directors. Thus
the holders of more than 50% of the outstanding shares of common stock can elect all of our directors if they choose to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The holders of our common
stock have no preemptive, subscription, conversion or redemption rights. Upon our liquidation, dissolution or winding-up, the holders
of our common stock are entitled to receive our assets pro rata.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Blank Check Preferred
Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Board of Directors
is empowered, without further action by stockholders, to issue from time to time one or more series of preferred stock, with such
designations, rights, preferences and limitations as the Board may determine by resolution. The rights, preferences and limitations
of separate series of preferred stock may differ with respect to such matters among such series as may be determined by the Board,
including, without limitation, the rate of dividends, method and nature of payment of dividends, terms of redemption, amounts payable
on liquidation, sinking fund provisions (if any), conversion rights (if any) and voting rights. Certain issuances of preferred
stock may have the effect of delaying or preventing a change in control of our company that some stockholders may believe is not
in their interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Class A Convertible
Preferred Stock and Class B Convertible Preferred Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This registration statement
does not register the resale of any shares of Class A Convertible Preferred Stock Class or Class B Convertible Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Dividends accrue on shares
of Class A Convertible Preferred Stock and Class B Convertible Preferred Stock (the &ldquo;Preferred Stock&rdquo;) at the rate
of $0.96 per annum. Such dividends accrue day-to-day and are cumulative, and payable when, as, and if declared by the Board of
Directors. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Preferred
Stock then outstanding are entitled to receive a preference payment equal to $12.00 per share (subject to appropriate adjustment
in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid
thereon, whether or not declared, together with any other dividends declared but unpaid thereon. Shares of Preferred Stock vote
together with the common stock on an as-converted basis; provided that the holder of Class A Convertible Preferred Stock will be
entitled to cast 3.75 votes for each whole share of Class A Convertible Preferred Stock held by such holder as of the record date
for determining stockholders entitled to vote on such matter. At any time after September 1, 2014, shares of Preferred Stock are
convertible into shares of Common Stock, at the rate of 3.75 shares of Common Stock for one share of Preferred Stock. In addition,
accrued but unpaid dividends on the Preferred Stock will also be convertible into common stock after September 1, 2014 at the rate
of one share for each $3.20 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination,
certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving
the Company. Shares of the Preferred Stock are subject to redemption by the Company at any time on or after January 15, 2017, upon
payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar
recapitalization) plus all accrued but unpaid dividends thereon. The Preferred Stock is subject to a liquidation preference over
common stock equal to $12 per share and the unpaid accrued dividend. Holders of the Preferred Stock will vote with holders of the
Company&rsquo;s common stock, but will have 3.75 votes per share of Preferred Stock held compared to one vote for each share of
common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Upon the closing of a
public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least
$5,000,000 of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of Common
Stock among the sale of other securities (a &ldquo;Qualified Offering&rdquo;), the Class A Preferred Stock and Class B Preferred
Stock will automatically convert into the securities issued in such Qualified Offering at a twenty percent (20%) to the price per
share (or per unit, if applicable) of the securities issued by the Company in such Qualified Offering. The securities issued to
the holder upon conversion will be restricted securities and are not being registered pursuant to this registration statement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Warrants</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Each purchaser in this
offering will receive a warrant to purchase one share of our common stock for each share of common stock it purchases in this offering.
The warrants are exercisable at an exercise price of $4.84 per share of common stock. The warrants are exercisable starting on
______________ and expire on ______________, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The warrant provides that
the warrant exercise price is subject to adjustment from time to time if we (i)&nbsp;pay a stock dividend or otherwise make a distribution
or distributions on shares of our common stock or any other equity or equity equivalent securities payable in shares of common
stock, (ii)&nbsp;subdivide outstanding shares of common stock into a larger number of shares, (iii)&nbsp;combine (including by
way of reverse stock split) outstanding shares of common stock into a smaller number of shares or (iv)&nbsp;issue by reclassification
of shares of the common stock any shares of our capital stock. For example, if we were to conduct a 4-for-1 stock split such that
each outstanding share became four shares of common stock, the exercise price of the warrant would be reduced to one-quarter of
the exercise price in effect immediately prior to the stock split and the number of shares acquirable upon a subsequent exercise
of the warrant shall be multiplied by four.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Transfer Agent and Registrar</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Transfer Agent and
Registrar for our common stock is Continental Stock Transfer&nbsp;&amp; Trust Company, 17 Battery Place, 8th Floor, New York, New
York 10004.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Nevada Anti-Takeover
Law and Charter and Bylaws Provisions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Nevada revised statutes
sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations
unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply.&nbsp;This
statute currently does not apply to our Company because in order to be applicable we would have to have as shareholders a specified
number of Nevada residents and we would have to do business in Nevada directly or through an affiliate.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="a_020"></A>UNDERWRITING</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Aegis Capital Corp. is
acting as the representative of the underwriters of the offering. We have entered into an underwriting agreement dated [&bull;],
2015 with the representative. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each
underwriter named below and each underwriter named below has agreed, severally but not jointly, to purchase from us, at the public
offering price less the underwriting discount set forth on the cover page of this prospectus, the number of shares of common stock
and warrants listed next to its name in the following table:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">Underwriters</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right; border-bottom: Black 1pt solid">Number&nbsp;of&nbsp;Shares&nbsp;of<BR> common&nbsp;stock&nbsp;and<BR> warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 82%; text-align: justify">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">Aegis Capital Corp.</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The underwriters are
committed to purchase all the shares of common stock and warrants offered by us other than those covered by the option to purchase
additional shares of common stock and warrants described below, if they purchase any shares of common stock and warrants. The
obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement.
Furthermore, pursuant to the underwriting agreement, the underwriters&rsquo; obligations are subject to customary conditions,
representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers&rsquo;
certificates and legal opinions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have agreed to indemnify
the underwriters against specified liabilities, including liabilities under the Securities Act of 1933, and to contribute to payments
the underwriters may be required to make in respect hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The underwriters are offering
the shares of common stock and warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Over-allotment Option</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have granted the underwriters
an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriters
to purchase a maximum of 511,364 additional shares of the common stock and warrants (15% of the shares of common stock and warrants
sold in this offering) from us to cover over-allotments, if any. If the underwriters exercise all or part of this option, they
will purchase shares of common stock and warrants covered by the option at the public offering price per share of common stock
and warrant to purchase one share of common stock that appears on the cover page of this prospectus, less the underwriting discount.
If this option is exercised in full, the total offering price to the public will be $[&bull;] and the total net proceeds, before
expenses, to us will be $[&bull;].</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Discount</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table shows
the public offering price, underwriting discount, and proceeds before expense to us. The information assumes either no exercise
or full exercise by the underwriters of the over-allotment option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Total</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Per Share of<BR> Common Stock<BR> and Warrant to<BR> purchase one Share<BR> of Common Stock</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Without Over-<BR> Allotment</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">With Over-<BR> Allotment</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Public Offering Price</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">17,250,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 46%; text-align: left; text-indent: 0in">Underwriting discount (1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.31</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">1,050,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">1,207,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Non-accountable expense allowance (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.04</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Proceeds, before offering expenses, to us</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.05</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,800,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">15,892,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 40.5pt; text-align: left; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 40.5pt; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">(1) Underwriting discount
is $0.31 per share of common stock and warrant to purchase one share of common stock (7% of the price of the shares of common stock
and warrants sold in this offering).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">(2) The non-accountable
expense allowance of 1% is not payable with respect to the shares of common stock and warrants sold upon exercise of the underwriters&rsquo;
over-allotment option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The underwriters propose
to offer the shares of common stock and warrants directly to the public at the public offering price set forth on the cover page
of this prospectus. In addition, the underwriters may offer some of the shares of common stock and warrants to other securities
dealers at such price less a concession of $[*] per share of common stock and warrant to purchase one share of common stock. After
this offering, this offering price and concessions and discounts to brokers and dealers and other selling terms may from time to
time be changed by the underwriters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have agreed to pay
the underwriters&rsquo; expenses relating to the offering, including (a) all filing fees and communication expenses relating to
the registration of the shares of common stock and warrants to be sold in this offering (including any over-allotment shares of
common stock and warrants); (b) all filing fees associated with the review of the offering by FINRA; (c) all fees and expenses
relating to the listing of the common stock and warrants on the NASDAQ Capital Market; (d) all fees, expenses and disbursements
relating to background checks of our officers and directors in an amount not to exceed $5,000 per individual and $15,000 in the
aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification of the shares of common stock
and warrants under the &ldquo;blue sky&rdquo; securities laws of such states and other jurisdictions as the representative may
reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements
of &ldquo;blue sky&rdquo; counsel, it being agreed that such fees and expenses will be limited as follows: (1) if the offering
is commenced on the NASDAQ Capital Market, the Company will make a payment of $5,000 to such counsel at closing, or (2) if the
offering is commenced on the Over-the-Counter Bulletin Board, the Company will make a payment of $10,000 to such counsel upon the
commencement of &ldquo;blue sky&rdquo; work by such counsel and an additional $5,000 at closing); (f) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the shares of common stock and warrants under the securities laws of
such foreign jurisdictions as the representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting
documents (including, without limitation, the Underwriting Agreement, any blue sky surveys and, if appropriate, any agreement among
underwriters, selected dealers&rsquo; agreement, underwriters&rsquo; questionnaire and power of attorney), registration statements,
prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final prospectuses as the representative
may reasonably deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and
delivering certificates representing the common stock and warrants to be offered in this offering; (j) fees and expenses of the
transfer agent for the common stock; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from
the Company to the underwriters; (l) the costs associated with post-closing advertising of the Offering in the national editions
of the Wall Street Journal and New York Times with the prior consent of the Company; (m) the costs associated with bound volumes
of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee
shall provide within a reasonable time after the consummation of the offering in such quantities as the representative may reasonably
request; (n) the fees and expenses of the Company&rsquo;s accountants; (o) the fees and expenses of the Company&rsquo;s legal counsel
and other agents and representatives; (p) the $21,775 cost associated with the representative&rsquo;s use of Ipreo&rsquo;s book-building,
prospectus tracking and compliance software for this offering; and (q) up to $20,000 of the representative&rsquo;s actual accountable
&ldquo;road show&rdquo; expenses for the Offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We estimate that the total
expenses of this offering, excluding the underwriting discount and the non-accountable expense allowance, will be approximately
$200,000.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Lock-Up Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">All of our officers, directors
and stockholders beneficially owning 5% or more of our outstanding common stock expect to enter into lock up agreements with the
representative prior to the commencement of this offering pursuant to which each of these persons or entities, for a period of
180 days from the effective date of the registration statement of which this prospectus forms a part, without the prior consent
of the representative, agree not to (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of,
directly or indirectly, any of our equity securities or securities convertible into or exercisable or exchangeable for shares of
our common stock owned or acquired on or prior to the closing of this offering (or any securities acquired after the closing of
this offering upon the conversion , exercise or exchange of such securities); (2) enter into any swap or other arrangement that
transfer to another, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise;
(3) make any demand for or exercise any right with respect to the registration of shares of our common stock; or (4) publicly disclose
the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement
relating to our securities. The lock-up restrictions are subject to certain exceptions and limitations. The restricted lock-up
period described above may be extended if (a) during the last 17 days of the lock-up period the Company issues an earnings release
or material news or a material event relating to the Company occurs or (b) prior to the expiration of the lock-up period, the Company
announces we will release earnings results or becomes aware that material news or a material event will occur in the 16-day beginning
on the last day of the lock-up period, in which case the restrictions imposed by the lock-up agreements will continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material
news or material event.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Representative&rsquo;s
Warrant</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have agreed to issue
to the representative a warrant&nbsp;to purchase up to a total of 136,364 shares of common stock&nbsp;(4% of the shares of common
stock included in the shares of common stock and warrants sold, excluding the over-allotment). The shares of common stock issuable
upon exercise of this warrant are identical to those offered by this prospectus. This warrant is exercisable at any time, and from
time to time, in whole or in part, at $6.05 per share (137.5% of the price of the&nbsp;shares of common stock and warrants sold
in this offering), commencing on a date which is one year from the effective date of the registration statement and expiring five
years from the effective date of the registration statement. The warrant may also be exercised on a cashless basis. The warrant
and the 136,364 shares of common stock underlying the warrant have been deemed compensation by FINRA and are therefore subject
to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The representative (or permitted assignees under the Rule) will not
sell, transfer, assign, pledge, or hypothecate this warrant or the securities underlying this warrant, nor will it engage in any
hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of this warrant
or the underlying securities for a period of 180 days from the date of the offering. Additionally, the warrant may not be sold
transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180 day period) following the effective
date of the registration statement except to any underwriter and selected dealer participating in this offering and their bona
fide officers or partners.&nbsp;The warrant grants holders&nbsp;&ldquo;piggy back&rdquo; registration rights. These rights apply
to all of the securities directly and indirectly issuable upon exercise of the warrant. We will bear all fees and expenses attendant
to registering the securities issuable on exercise of the warrant, other than underwriting commissions incurred and payable by
the holders. The exercise price and number of shares issuable upon exercise of the warrant may be adjusted in certain circumstances
including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation.
However, the warrant exercise price or underlying shares will not be adjusted for issuances of common stock at a price below the
warrant exercise price.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Right of First Refusal</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">For a period of [24] months
from the effective date of the offering, the representative has an irrevocable right of first refusal to act as sole and exclusive
investment banker, sole and exclusive book-runner, sole and exclusive financial advisor, sole and exclusive underwriter and/or
sole and exclusive placement agent, at the representative&rsquo;s sole and exclusive discretion, for each and every future public
and private equity and debt offering of the Company (or any successor or subsidiary of the Company) during such period.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Electronic Offer, Sale
and Distribution of Securities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">A prospectus in electronic
format may be made available on the websites maintained by one or more of the underwriters or selling group members, if any, participating
in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically.
The representative may agree to allocate a number of shares of common stock and warrants to underwriters and selling group members
for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group
members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format,
the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement
of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter,
and should not be relied upon by investors.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Stabilization</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with this
offering, the underwriters may engage in over-allotment transactions, syndicate-covering transactions, stabilizing transactions,
penalty bids and purchases to cover positions created by short sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Stabilizing transactions
permit bids to purchase securities, so long as stabilizing bids do not exceed a specified maximum and are engaged in for the purpose
of preventing or retarding a decline in the market price of the securities while the offering is in progress.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Over-allotment transactions involve sales by the underwriters of securities in excess of the number
of securities the underwriters are obligated to purchase. This creates a syndicate short position, which may be either a covered
short position or a naked short position. In a covered short position, the number of securities over-allotted by the underwriters
is not greater than the number of securities that they may purchase in the over-allotment option. In a naked short position, the
number of securities involved is greater than the number of securities in the over-allotment option. The underwriters may close
out any covered short position by either exercising their over-allotment option or purchasing shares of securities in the open
market.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.5pt; text-align: justify; text-indent: -24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Syndicate covering transactions involve the purchase of securities in the open market after the
distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out
the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open
market as compared to the price at which they may purchase securities through the exercise of the over-allotment option. If the
underwriters sell more shares of securities than could be covered by the exercise of the over-allotment option, creating a naked
short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely
to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the securities
in the open market that could adversely affect investors who purchase in this offering.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 24.5pt; text-align: justify; text-indent: -24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Penalty bids permit the representative to reclaim a selling concession from a syndicate member
when the securities originally sold by the syndicate member are purchased in stabilizing or syndicate covering transactions to
cover syndicate short positions.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">These stabilizing transactions,
syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities
or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open
market may be higher than it would be otherwise in the absence of these transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Neither we nor the underwriters
make any representation or prediction as to the effect that the transactions described above may have on the prices of our securities.
These transactions may occur on the NASDAQ Capital Market or on any other trading market. If any of these transactions are commenced,
they may be discontinued without notice at any time.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Passive Market Making</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with this
offering, underwriters and selling group members, if any, may engage in passive market making transactions in our common stock
in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales
of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price
not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market
maker&rsquo;s bid, then that bid must then be lowered when specified purchase limits are exceeded.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Other Relationships</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The underwriters and their
affiliates have provided, or may in the future provide, various investment banking, commercial banking, financial advisory, brokerage
and other services to us and our affiliates for which services they have received, and may in the future receive, customary fees
and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their affiliates
may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities)
and financial instruments (including bank loans) for their own accounts and for the accounts of their customers and such investment
and securities activities may involve securities and/or instruments of our company. The underwriters and their affiliates may also
make investment recommendations and/or publish or express independent research views in respect of such securities or instruments
and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Offer Restrictions Outside
the United States</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Other than in the United
States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this
prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by
this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Australia</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This prospectus is not
a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and
Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the
Australian Corporations Act. Accordingly, (1) the offer of the securities under this prospectus is only made to persons to whom
it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions
set out in section 708 of the Australian Corporations Act, (2) this prospectus is made available in Australia only to those persons
as set forth in clause (1) above, and (3) the offeree must be sent a notice stating in substance that by accepting this offer,
the offeree represents that the offeree is such a person as set forth in clause (1) above, and, unless permitted under the Australian
Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months
after its transfer for the offeree under this prospectus.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">China</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The information in this
document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People&rsquo;s Republic
of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region
and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than
directly to &ldquo;qualified domestic institutional investors.&rdquo;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">European Economic
Area &mdash; Belgium, Germany, Luxembourg and the Netherlands</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The information in this
document has been prepared on the basis that all offers of the shares of common stock and warrants will be made pursuant to an
exemption under the Directive 2003/71/EC (&ldquo;Prospectus Directive&rdquo;), as implemented in Member States of the European
Economic Area (each, a &ldquo;Relevant Member State&rdquo;), from the requirement to produce a prospectus for offers of securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">An offer to the public
of the shares of common stock and warrants has not been made, and may not be made, in a Relevant Member State except pursuant to
one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">to legal entities that are authorized or regulated
to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">to any legal entity that has two or more of (1) an
average of at least 250 employees during its last fiscal year; (2) a total balance sheet of more than &euro;43,000,000 (as shown
on its last annual unconsolidated or consolidated financial statements) and (3) an annual net turnover of more than &euro;50,000,000
(as shown on its last annual unconsolidated or consolidated financial statement);</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">to fewer than 100 natural or legal persons (other than
qualified investors within the meaning of Article 2(1)I of the Prospectus Directive) subject to obtaining the prior consent of
the company or any underwriter for any such offer; or</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">in any other circumstances falling within Article 3(2)
of the Prospectus Directive, provided that no such offer of the shares of common stock and warrants shall result in a requirement
for the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.</TD>
</TR></TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">France</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This document is not being
distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within
the meaning of Article L.411-1 of the French Monetary and Financial Code (Code mon&eacute;taire et financier) and Articles 211-1
et seq. of the General Regulation of the French Autorit&eacute; des march&eacute;s financiers (&ldquo;AMF&rdquo;). The not been
offered or sold and will not be offered or sold, directly or indirectly, to the public in France.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This document and any
other offering material relating to the shares of common stock and warrants have not been, and will not be, submitted to the AMF
for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public
in France.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Such offers, sales and
distributions have been and shall only be made in France to (1) qualified investors (investisseurs qualifi&eacute;s) acting for
their own account, as defined in and in accordance with Articles L.411-2-II-2&deg; and D.411-1 to D.411-3, D. 744-1, D.754-1 and
D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (2) a restricted number of non-qualified
investors (cercle restreint d&rsquo;investisseurs non-qualifi&eacute;s) acting for their own account, as defined in and in accordance
with Articles L.411-2-II-2&deg; and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing
regulation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Pursuant to Article 211-3
of the General Regulation of the AMF, investors in France are informed that the shares of common stock and warrants cannot be distributed
(directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and
L.621-8 to L.621-8-3 of the French Monetary and Financial Code.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Ireland</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The information in this
document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved
by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in
Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the &ldquo;Prospectus Regulations&rdquo;).
The shares of common stock and warrants have not been offered or sold, and will not be offered, sold or delivered directly or indirectly
in Ireland by way of a public offering, except to (1) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations
and (2) fewer than 100 natural or legal persons who are not qualified investors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The shares of common stock
and warrants offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or
ISA, nor have such shares of common stock and warrants been registered for sale in Israel. The shares and warrants may not be offered
or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits,
approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included
herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the shares of common stock and
warrants being offered. Any resale in Israel, directly or indirectly, to the public of the shares of common stock and warrants
offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli
securities laws and regulations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Italy</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The offering of the shares
of common stock and warrants in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission
(Commissione Nazionale per le Societ&agrave; e la Borsa, &ldquo;CONSOB&rdquo;) pursuant to the Italian securities legislation and,
accordingly, no offering material relating to the shares of common stock and warrants may be distributed in Italy and such securities
may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February
1998 (&ldquo;Decree No. 58&rdquo;), other than:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">to Italian qualified investors, as defined in Article
100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 (&ldquo;Regulation no. 1197l&rdquo;)
as amended (&ldquo;Qualified Investors&rdquo;); and</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.3pt; text-align: justify; text-indent: -22.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">in other circumstances that are exempt from the rules
on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Any offer, sale or delivery
of the shares of common stock and warrants or distribution of any offer document relating to the shares of common stock and warrants
in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">made by investment firms, banks or financial intermediaries
permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended),
Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: -22.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left">&bull;</TD><TD STYLE="text-align: justify">in compliance with all relevant Italian securities,
tax and exchange controls and any other applicable laws.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Any subsequent distribution
of the shares of common stock and warrants in Italy must be made in compliance with the public offer and prospectus requirement
rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure
to comply with such rules may result in the sale of such shares of common stock and warrants being declared null and void and in
the liability of the entity transferring the shares of common stock and warrants for any damages suffered by the investors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Japan</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The shares of common stock
and warrants have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law
of Japan (Law No. 25 of 1948), as amended (the &ldquo;FIEL&rdquo;) pursuant to an exemption from the registration requirements
applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article
2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the shares of common stock and warrants may
not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified
Institutional Investors. Any Qualified Institutional Investor who acquires the shares of common stock and warrants may not resell
them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of the shares of
common stock and warrants is conditional upon the execution of an agreement to that effect.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Portugal</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This document is not being
distributed in the context of a public offer of financial securities (oferta p&uacute;blica de valores mobili&aacute;rios) in Portugal,
within the meaning of Article 109 of the Portuguese Securities Code (C&oacute;digo dos Valores Mobili&aacute;rios). The shares
of common stock and warrants have not been offered or sold and will not be offered or sold, directly or indirectly, to the public
in Portugal. This document and any other offering material relating to the shares of common stock and warrants have not been, and
will not be, submitted to the Portuguese Securities Market Commission (Comiss&atilde;o do Mercado de Valores Mobili&aacute;rios)
for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public
in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code.
Such offers, sales and distributions of the shares of common stock and warrants in Portugal are limited to persons who are &ldquo;qualified
investors&rdquo; (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not
distribute it or the information contained in it to any other person.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Sweden</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This document has not
been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly,
this document may not be made available, nor may the shares of common stock and warrants be offered for sale in Sweden, other than
under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980)
(Sw. lag (1991:980) om handel med finansiella instrument). Any offering of the shares of common stock and warrants in Sweden is
limited to persons who are &ldquo;qualified investors&rdquo; (as defined in the Financial Instruments Trading Act). Only such investors
may receive this document and they may not distribute it or the information contained in it to any other person.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Switzerland</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The shares of common stock
and warrants may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (&ldquo;SIX&rdquo;) or
on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the
disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange
or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the shares of common
stock and warrants may be publicly distributed or otherwise made publicly available in Switzerland.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Neither this document
nor any other offering material relating to the shares of common stock and warrants have been or will be filed with or approved
by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of the shares of common stock
and warrants will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">This document is personal
to the recipient only and not for general circulation in Switzerland.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">United Arab Emirates</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Neither this document
nor the shares of common stock and warrants have been approved, disapproved or passed on in any way by the Central Bank of the
United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing
from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or
sell the shares of common stock and warrants within the United Arab Emirates. This document does not constitute and may not be
used for the purpose of an offer or invitation. No services relating to the shares of common stock and warrants, including the
receipt of applications and/or the allotment or redemption of such shares of common stock and warrants, may be rendered within
the United Arab Emirates by us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">No offer or invitation
to subscribe for the shares of common stock and warrants is valid or permitted in the Dubai International Financial Centre.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">United Kingdom</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Neither the information
in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority
in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended
(&ldquo;FSMA&rdquo;)) has been published or is intended to be published in respect of the shares of common stock and warrants.
This document is issued on a confidential basis to &ldquo;qualified investors&rdquo; (within the meaning of section 86(7) of FSMA)
in the United Kingdom, and the shares of common stock and warrants may not be offered or sold in the United Kingdom by means of
this document, any accompanying letter or any other document, except in circumstances that do not require the publication of a
prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part,
nor may its contents be disclosed by recipients to any other person in the United Kingdom.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Any invitation or inducement
to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the
shares of common stock and warrants has only been communicated or caused to be communicated and will only be communicated or caused
to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In the United Kingdom,
this document is being distributed only to, and is directed at, persons (1) who have professional experience in matters relating
to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2005 (&ldquo;FPO&rdquo;), (2) who fall within the categories of persons referred to in Article 49(2)(a) to (d)
(high net worth companies, unincorporated associations, etc.) of the FPO or (3) to whom it may otherwise be lawfully communicated
(together &ldquo;relevant persons&rdquo;). The investments to which this document relates are available only to, and any invitation,
offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not
act or rely on this document or any of its contents.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><A NAME="a_021"></A>LEGAL MATTERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Certain legal matters
in connection with the offering and the validity of the common stock offered by this prospectus was passed upon by Snell&nbsp;&amp;
Wilmer L.L.P., Costa Mesa, California. Certain legal matters in connection with the offering of common stock and warrants offered
by this prospectus was passed upon for the underwriter by Bryan Cave LLP, New York, New York.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><A NAME="a_022"></A>EXPERTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The consolidated financial
statements of Cryoport, Inc. as of March&nbsp;31, 2014 and 2013 and for the years then ended, included in this prospectus, have
been audited by KMJ Corbin&nbsp;&amp; Company LLP, an independent registered public accounting firm, as stated in their report
appearing herein, and elsewhere in the registration statement, and have been so included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><A NAME="a_023"></A>WHERE YOU CAN FIND
MORE INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We are required to comply
with the information and periodic reporting requirements of the Exchange Act, and, in accordance with the requirements of the Exchange
Act, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements
and other information will be available for inspection and copying at the regional offices, public reference facilities and internet
site of the SEC referred to below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We filed with the SEC
a registration statement on Form S-1 under the Securities Act for the common stock and warrants to be sold in this offering. This
prospectus does not contain all of the information in the registration statement and the exhibits and schedules that were filed
with the registration statement. For further information with respect to the common stock, warrants and us, we refer you to the
registration statement and the exhibits and schedules that were filed with the registration statement. Statements made in this
prospectus regarding the contents of any contract, agreement or other document that is filed as an exhibit to the registration
statement are not necessarily complete, and we refer you to the full text of the contract or other document filed as an exhibit
to the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">A copy of the registration
statement and the exhibits and schedules that were filed with the registration statement may be inspected without charge at the
public reference facilities maintained by the SEC, 100 F Street, Washington, DC 20549. Copies of all or any part of the registration
statement may be obtained from the SEC upon payment of the prescribed fee. Information regarding the operation of the public reference
rooms may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information
statements and other information regarding registrants that file electronically with the SEC. The address of the site is <U>http://www.sec.gov</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">You can find more information
about us on our website, which is located at <U>http://www.cryoport.com</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 24.5pt"><B><A NAME="a_024"></A>DISCLOSURE OF COMMISSION
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Under the Nevada Revised
Statutes and our Articles of Incorporation, as amended, our directors will have no personal liability to us or our stockholders
for monetary damages incurred as the result of the breach or alleged breach by a director of his &ldquo;duty of care.&rdquo; This
provision does not apply to the directors&rsquo; (i)&nbsp;acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii)&nbsp;acts or omissions that a director believes to be contrary to the best interests of the corporation
or its stockholders or that involve the absence of good faith on the part of the director, (iii)&nbsp;approval of any transaction
from which a director derives an improper personal benefit, (iv)&nbsp;acts or omissions that show a reckless disregard for the
director&rsquo;s duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been
aware, in the ordinary course of performing a director&rsquo;s duties, of a risk of serious injury to the corporation or its stockholders,
(v)&nbsp;acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director&rsquo;s
duty to the corporation or its stockholders, or (vi)&nbsp;approval of an unlawful dividend, distribution, stock repurchase or redemption.
This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross
negligence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">CRYOPORT, INC.<BR>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS<BR>
March 31, 2014 and 2013</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 0in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <td style="vertical-align: top; width: 90%; padding-right: 0.8pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td style="vertical-align: bottom; width: 10%; border-bottom: black 1pt solid; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt"><b>Page</b></font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_001"><font style="font-size: 10pt">Report of Independent Registered Public Accounting Firm</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-2</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_002"><font style="font-size: 10pt">Consolidated Balance Sheets as of March&nbsp;31, 2014 and 2013</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-3</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_003"><font style="font-size: 10pt">Consolidated Statements of Operations for the years ended March&nbsp;31, 2014 and 2013</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-4</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_004"><font style="font-size: 10pt">Consolidated Statements of Stockholders&rsquo; (Deficit) Equity for the years ended March&nbsp;31, 2014 and 2013</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-5</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_005"><font style="font-size: 10pt">Consolidated Statements of Cash Flows for the years ended March&nbsp;31, 2014 and 2013</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-6</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top; padding-left: 12pt; text-align: left; text-indent: -12pt"><A HREF="#fin_006"><font style="font-size: 10pt">Notes to Consolidated Financial Statements</font></A></td>
    <td style="vertical-align: bottom; padding-right: 0.8pt; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-7</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>December 31, 2014 and 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 90%; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt"><A HREF="#fin_007">Condensed Consolidated Balance Sheets at December 31, 2014 (Unaudited) and March 31, 2014</A></font></td>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-27</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><A HREF="#fin_008"><font style="font-size: 10pt">Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2014 and 2013</font></A></td>
    <TD STYLE="vertical-align: bottom; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-28</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><font style="font-size: 10pt"><A HREF="#fin_009">Unaudited Condensed Consolidated Statements of Cash Flows for the three and nine months ended December 31, 2014 and 2013</A></font></td>
    <TD STYLE="vertical-align: bottom; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-29</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><A HREF="#fin_010"><font style="font-size: 10pt">Notes to Condensed Consolidated Financial Statements (Unaudited)</font></A></td>
    <TD STYLE="vertical-align: bottom; text-align: right; text-indent: 0in"><font style="font-size: 10pt">F-30</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_001"></A><B>Report of Independent Registered
Public Accounting Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">The Board of Directors and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Stockholders of Cryoport,
Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We have audited the accompanying
consolidated balance sheets of Cryoport,&nbsp;Inc. (the &ldquo;Company&rdquo;) as of March 31, 2014 and 2013, and the related consolidated
statements of operations, stockholders&rsquo; (deficit) equity and cash flows for each of the years in the two-year period ended
March 31, 2014. These consolidated financial statements are the responsibility of the Company&rsquo;s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We conducted our audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cryoport,
Inc. at March 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year period
ended March 31, 2014 in conformity with accounting principles generally accepted in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The accompanying consolidated
financial statements have been prepared assuming the Company will continue as a going concern. As described in Note 1 to the consolidated
financial statements, the Company has incurred recurring operating losses and has had negative cash flows from operations since
inception. Although the Company has cash and cash equivalents of $369,581 at March 31, 2014, management has estimated that cash
on hand, which include proceeds from convertible bridge notes received in the fourth quarter of fiscal 2014, will only be sufficient
to allow the Company to continue its operations into the second quarter of fiscal 2015. These matters raise substantial doubt about
the Company&rsquo;s ability to continue as a going concern. Management&rsquo;s plans in regard to these matters are also described
in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">/s/ KMJ Corbin &amp; Company
LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">Costa Mesa, California<BR>
June 25, 2014</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_002"></A><B>Cryoport, Inc. and Subsidiary</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Consolidated Balance Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31,</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Current Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">369,581</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">563,104</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Accounts receivable, net of allowance for doubtful accounts of $24,600 and $8,700, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">515,825</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">217,097</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,703</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,212</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Other current assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">196,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">138,892</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,111,614</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">958,305</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">408,892</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">505,485</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,086</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272,263</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Deposits and other assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,358</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">19,744</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,709,950</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,755,797</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">LIABILITIES AND STOCKHOLDERS&rsquo; DEFICIT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Current Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Accounts payable and other accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">579,678</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">858,709</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Accrued compensation and related expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,288</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">217,432</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Convertible debentures payable and accrued interest, net of discount of $184,750 in 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,622,359</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,304,419</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Current portion of related party notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,358,120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Derivative liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,848</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,014,445</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,497,408</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Related party notes payable and accrued interest, net of current portion</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,321,664</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Total liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,014,445</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,819,072</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Commitments and contingencies</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Stockholders&rsquo; (Deficit) Equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Preferred stock, $0.001&nbsp;par value; 2,500,000&nbsp;shares authorized; no shares&nbsp;&nbsp;issued and outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Common stock, $0.001&nbsp;par value; 250,000,000&nbsp;shares authorized; 59,979,954 and 37,760,628 issued and outstanding at March 31, 2014 and 2013, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,761</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,512,399</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64,210,412</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(85,876,874</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(66,311,448</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Total stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,304,495</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,063,275</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 34.2pt">Total liabilities and stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,709,950</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,755,797</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">See accompanying notes to
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_003"></A><B>Cryoport, Inc. and Subsidiary</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Consolidated Statements
of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 74%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,659,943</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,100,539</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,222,988</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,587,823</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Gross margin (loss)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">436,955</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(487,284</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Operating costs and expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,106,219</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,411,728</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">409,111</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">425,446</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Total operating costs and expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,515,330</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,837,174</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,078,375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,324,458</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Other (expense) income:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,713,767</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(784,454</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72,861</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,078</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Change in fair value of derivatives</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,848</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">16,486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Loss before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(19,563,826</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,380,833</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(19,565,426</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,382,433</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Net loss per common share &ndash; basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.40</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.17</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Weighted average shares outstanding &ndash; basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">48,850,513</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,760,628</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">See accompanying notes to
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_004"></A><B>Cryoport, Inc. and Subsidiary</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Consolidated Statements
of Stockholders&rsquo; (Deficit) Equity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Preferred&nbsp;Stock</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Common
    Stock</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Additional</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Accumulated</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Stockholders&rsquo;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Shares</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Shares</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Paid-In&nbsp;Capital</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Deficit</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(Deficit)
    Equity</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 44%; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"><FONT STYLE="font-size: 8pt">Balance
    at March 31, 2012</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">37,760,628</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">37,761</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">63,620,774</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">(59,929,015</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 5%; text-align: right"><FONT STYLE="font-size: 8pt">3,729,520</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,382,433</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,382,433</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Offering costs in connection
    with the February 2012 private placement offering</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(103,542</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(103,542</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Stock-based
    compensation expense</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">693,180</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">693,180</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"><FONT STYLE="font-size: 8pt">Balance
    at March 31, 2013</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">37,760,628</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">37,761</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">64,210,412</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(66,311,448</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,063,275</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(19,565,426</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(19,565,426</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Stock-based compensation
    expense</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">678,119</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">678,119</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Estimated relative fair
    value of warrants issued in connection with convertible bridge notes payable</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">478,229</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">478,229</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Issuance of common stock
    upon exercise of options and warrants</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,583,315</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,583</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">325,307</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">326,890</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Issuance of common stock
    and warrants upon conversion of convertible bridge notes and accrued interest</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">20,636,011</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">20,636</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,106,565</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,127,201</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-size: 8pt">Induced
    debt conversion expense</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">13,713,767</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">13,713,767</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"><FONT STYLE="font-size: 8pt">Balance
    at March 31, 2014</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">59,979,954</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">59,980</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">83,512,399</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(85,876,874</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(2,304,495</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">See accompanying notes to
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_005"></A><B>Cryoport, Inc. and Subsidiary</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><B>Consolidated Statements
of Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Operating Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(19,565,426</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(6,382,433</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">311,590</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">393,959</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Amortization of debt discount and deferred financing costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">678,915</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,514</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Stock-based compensation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">678,119</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">693,180</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Change in fair value of derivative instruments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,848</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,486</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Loss on write-off of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Loss on disposal of cryogenic shippers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,066</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,033</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Reserve for bad debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,876</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,713,767</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(323,604</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(70,973</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,509</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,542</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,588</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,912</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Accounts payable and other accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(221,929</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">443,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Accrued compensation and related expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">236,856</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,564</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 34.2pt">Accrued interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">108,038</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">39,558</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 52.2pt">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,380,659</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4,785,144</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Investing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Purchases of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,482</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Purchases of property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(138,886</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(156,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 52.2pt">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(138,886</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(178,682</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Financing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Proceeds from exercise of stock options and warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">326,890</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Proceeds from issuance of convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,558,301</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,294,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Repayment of convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82,800</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Repayment of offering and deferred financing costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(463,169</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(206,305</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Repayment of related party notes payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(96,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(96,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 52.2pt">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,326,022</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">909,395</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Net decrease in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(193,523</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,054,431</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Cash and cash equivalents&nbsp;&mdash; beginning of year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">563,104</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,617,535</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Cash and cash equivalents&nbsp;&mdash; end of year</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">369,581</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">563,104</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Supplemental Disclosure of Cash Flow Information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Cash paid for interest</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">15,676</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Cash paid for income taxes</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Supplemental Disclosure of Non-Cash Investing and Financing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Offering costs in connection with equity financing included in accounts payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">53,747</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Deferred financing costs in connection with convertible debt payable included in accounts payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">30,120</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">38,475</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Release of restricted cash for repayment of convertible debentures</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">251,368</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Estimated relative fair value of warrants issued in connection with convertible bridge notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">478,229</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.35in">Conversion of bridge notes payable and accrued interest into common stock units</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,127,201</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in">See accompanying notes to
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0in"><A NAME="fin_006"></A>Cryoport, Inc. and Subsidiary<BR>
Notes to Consolidated Financial Statements</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Note 1.&nbsp;Nature
of the Business</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cryoport Inc. (the &ldquo;Company&rdquo;,
&ldquo;Cryoport&rdquo; or &ldquo;we&rdquo;) is a Nevada corporation originally incorporated under the name G.T.5-Limited (&ldquo;GT5&rdquo;)
on May 25, 1990. In connection with a Share Exchange Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired
all of the issued and outstanding shares of common stock of Cryoport Systems, Inc., a California corporation, in exchange for 2,410,811
shares of our common stock (which represented approximately 81% of the total issued and outstanding shares of common stock following
the close of the transaction). Cryoport Systems, Inc., which was originally formed in 1999 as a California limited liability company,
and subsequently reorganized into a California corporation on December 11, 2000, remains the operating company under Cryoport,
Inc. We became &ldquo;publicly held&rdquo; by the reverse merger with GT5 described above. Over time we have transitioned from
being a development company to a fully operational public company, providing cold chain logistics solutions to the biotechnology
and life sciences industries, globally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Through a combination
of purpose-built proprietary packaging, information technologies and specialized logistics knowhow, we provide frozen shipping
logistics solutions to the life sciences industry. We view our solutions as disruptive to &ldquo;older technologies&rdquo; in that
our solutions provide reliable, economic alternatives to existing solutions and services utilized for frozen shipping in life sciences
including stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious
substances and other items that require continuous exposure to frozen or cryogenic temperatures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;
</SUP>Solutions includes sophisticated cloud-based logistics management software we have branded as the Cryoportal&trade; which
supports the management of the entire shipment process through a single interface, including initial order input, document preparation,
customs clearance, courier management, shipment tracking, issue resolution, and delivery. The Cryoportal&trade; provides unique
and incisive information dashboards and validation documentation for every shipment. The Cryoportal&trade; records and retains
a fully documented &ldquo;chain-of-custody&rdquo; and, at the client&rsquo;s option, &ldquo;chain-of-condition&rdquo; for every
shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout the process.
This recorded and archived information allows our customers to meet exacting requirements necessary for scientific work and for
regulatory purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;
</SUP>Solutions also includes our liquid nitrogen dry vapor shippers we have branded as our Cryoport Express<SUP>&reg; </SUP>Shippers,
which are cost-effective and reusable cryogenic transport containers (patented vacuum flasks) utilizing innovative liquid nitrogen
(&ldquo;LN2&rdquo;) &ldquo;dry vapor&rdquo; technology. Cryoport Express<SUP>&reg; </SUP>Shippers are International Air Transport
Association (&ldquo;IATA&rdquo;) certified, and validated to maintain stable temperatures of minus 150&deg; C and below for a 10-plus
day dynamic shipment period. The Company currently features two Cryoport Express<SUP>&reg; </SUP>Shipper models, the Standard Dry
Shipper (holding up to 75 2.0 ml vials) and the High Volume Dry Shipper (holding up to 500 2.0 ml vials).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Amongst our solutions,
we offer a &ldquo;turnkey&rdquo; solution, which can be accessed through our cloud-based Cryoportal&trade; or by contacting Cryoport
Client Care for order entry. Once the order is placed, we ship a fully charged Cryoport Express&reg; Shipper to the customer <FONT STYLE="color: #1A1A1A">who
conveniently loads their frozen commodity into the inner chamber of the shipper.&nbsp; The customer then closes the shipper and
reseals the shipping box displaying the recipient&rsquo;s address (&ldquo;Flap A&rdquo;) for pre-arranged carrier pick up.&nbsp;
</FONT>Cryoport arranges for the pick-up of the parcel by a shipping service provider for delivery to the customer&rsquo;s intended
recipient.&nbsp; The recipient simply opens the box and shipper and removes the frozen commodity.&nbsp; The recipient only needs
to reseal the box, displaying the nearest Cryoport Operations Center address (&ldquo;Flap B&rdquo;) and set it out for pre-arranged
carrier pick up. The Cryoport Express<SUP>&reg; </SUP>Shipper is returned to us for cleaning, quality assurance testing, recharging
and reuse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In late 2012, we shifted
our focus from being a developer of cryogenic shippers and software to being a comprehensive frozen logistics solutions provider
to the life sciences industry, which was accomplished by broadening our service offerings. Now, in addition to our &ldquo;Turn-key
Solution&rdquo;, we also provide the following value-added solutions that were developed to address our various clients&rsquo;
needs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;<B><I>Customer Staged Solution</I></B>,&rdquo;
under which we supply an inventory of our Cryoport Express&reg; Shippers to our customer, in an uncharged state, enabling our
customer (after training/certification) to charge them with liquid nitrogen and use our Cryoportal&trade; to enter orders with
shipping and delivery service providers for the transportation of the package. Once the order is released, our customer services
professionals monitor the shipment and the return of the shipper to us for cleaning, quality assurance testing and reuse.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 58.5pt; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;<B><I>Customer Managed Solution</I></B>,&rdquo;
a limited customer implemented, solution, whereby we supply our Cryoport Express&reg; Shippers to clients in a fully charged state,
but leaving it to the client to manage the shipping, including the selection of the shipping and delivery service provider and
the return of the shipper to us. Under this solution, the customer accepts a significant level of the risk for a successful shipment.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">&ldquo;<B><I>powered by Cryoport</I></B><SUP>SM</SUP>&rdquo;
is made available to providers of shipping and delivery services who seek to offer a &ldquo;branded&rdquo; cryogenic shipping
solution as part of their service offerings. By negotiation, this solution can be private labeled as long as &ldquo;<I>powered
by Cryoport<SUP>SM</SUP></I>&rdquo; appears prominently on the offering software interface and prominently on the packaging, which
is provided by the client after minimum volume requirements are met.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font: 10pt Symbol; color: #404040">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Integrated
Solution</I></B>&rdquo; is our most comprehensive and complex outsourcing solution. It usually involves our management of the
entire cryogenic logistics process for our client, including the location of our employees at the client&rsquo;s site to manage
the client&rsquo;s cryogenic logistics, in total.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Life Science
Point-of-Care Repository Solution</I></B>&rdquo; whereby we supply our Cryoport Express<SUP>&reg;</SUP> Shippers to ship and store
cryogenically preserved life science products for up to 6 days (or longer periods with substitute Shippers) at a point-of-care
site, with the Cryoport Express<SUP>&reg;</SUP> Shippers serving as a temporary freezer/repository enabling the efficient distribution
of temperature sensitive allogeneic cell-based therapies without the expense, inconvenience, and potential costly failure of an
on-sight, cryopreservation apparatus. Our customer services professionals monitor each shipment throughout the predetermined process
including the shipment&rsquo;s return to Cryoport where the Cryoport Express<SUP>&reg; </SUP>Shipper is cleaned, tested for quality
assurance and then returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 24.5pt; text-align: left"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;<B><I>Personalized
Medicine and Cell-based Immunotherapy Solution</I></B>&rdquo; whereby our Cryoport Express<SUP>&reg; </SUP>Solutions serves as
an enabling technology for the safe manufacture of the rapidly expanding autologous cellular-based immunotherapy market by providing
a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the collection of the patient&rsquo;s
cells in a hospital setting, to (b) a central processing facility where they are manufactured into a personalized medicine, to
(c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care treatment facility.&nbsp; The Cryoport
Express<SUP>&reg;</SUP> Shippers can then serve as a temporary freezer/repository to allow the efficient distribution of this
personalized medicine to patients when and where they need it most without the expense, inconvenience, and potential costly failure
of an on-sight, cryopreservation apparatus. Our customer services professionals monitor each shipment throughout the predetermined
process including the shipment&rsquo;s return to Cryoport where the Cryoport Express<SUP>&reg;</SUP> Shipper is cleaned, tested
for quality assurance and then returned to inventory for reuse.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">One of our distribution
partners is Federal Express Corporation (&ldquo;FedEx&rdquo;). We have an agreement with FedEx to provide frozen shipping logistics
services through the combination of our purpose-built proprietary technologies and turnkey management processes. FedEx markets
and sells Cryoport&rsquo;s services for frozen temperature-controlled cold chain transportation as its FedEx<SUP>&reg;</SUP> Deep
Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year 2013, the Company worked closely
with FedEx to further align its sales efforts and accelerate penetration within FedEx&rsquo;s life sciences customer base through
improved processes, sales incentives, joint customer calls and more frequent communication at the sales and executive level. In
addition, FedEx has developed a FedEx branded version of the Cryoportal<SUP>TM</SUP> software platform, which is &ldquo;<I>powered
by Cryoport</I>&rdquo; for use by FedEx and its customers giving them access to the full capabilities of our logistics management
platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In January 2013, we entered
into a master agreement (&ldquo;FedEx Agreement&rdquo;) with FedEx renewing these services and providing FedEx with a non-exclusive
license and right to use a customized version of our Cryoportal<SUP>TM</SUP> for the management of shipments made by FedEx customers.
The FedEx Agreement became effective on January 1, 2013 and, unless sooner terminated as provided in the FedEx Agreement, expires
on December 31, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In June 2014, we added
DHL as our second distribution partner by entering into an agreement with LifeConEx, a part of DHL Global Forwarding (&ldquo;DHL&rdquo;),
whereby DHL can offer our validated and comprehensive cryogenic solutions to its life sciences and healthcare customers on a global
basis. This relationship with DHL is a further implementation of the Company&rsquo;s expansion of distribution partnerships under
the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; model described above, allowing us to expand our sales and marketing
reach through our partners and build awareness of the benefits our validated cryogenic solution offerings. DHL has announced that
it will add 15 more certified Life Sciences stations in the second quarter of 2014 to its existing Thermonet network of 45 stations
already in operation. This expanded network will now be able to offer Cryoport&rsquo;s cryogenic solutions under the DHL brands.
&nbsp;In addition, DHL&rsquo;s customer will continue to be able to have direct access to our cloud-based order entry and tracking
portal to order Cryoport Express<SUP>&reg;</SUP> solutions and receive preferred DHL shipping rates and discounts. Our proprietary
logistics management platform, the Cryoportal<SUP>TM</SUP>, is integrated to DHL&rsquo;s tracking and billing systems to provide
DHL life sciences and healthcare customers with a seamless way of shipping their critical biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In December&nbsp;2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, the Company is providing
on-site logistics personnel and its logistics management platform, the Cryoportal<SUP>TM</SUP>, to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing shipping data and processes to further streamline Zoetis&rsquo;
logistics, ensuring products arrive at their destinations in specified conditions, on-time and with the optimum uses of resources.
The Company manages Zoetis&rsquo; total fleet of dewar flask shippers used for this purpose, including liquid nitrogen shippers.
In July 2013 the agreement was amended to expand Cryoport&rsquo;s scope to manage all logistics of Zoetis&rsquo; key frozen poultry
vaccine to all Zoetis&rsquo; international distribution centers as well as all domestic shipments of this vaccine. In October 2013,
the agreement was further amended to further expand Cryoport&rsquo;s services to include the logistics management for a second
poultry vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In February 2014, we entered
into a services agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;), a privately-held, commercial stage biotechnology
company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement, Liventa will be using Cryoport
Express<SUP>&reg;</SUP> Solutions for the logistics of its cell-based therapies requiring cryogenic temperatures and also provide
Cryoport Express<SUP>&reg;</SUP> Solutions to other biologics suppliers within the orthopedic arena. The agreement combines Cryoport&rsquo;s
proprietary, purpose-built cold chain logistics solutions for cell-based and advanced biologic tissue forms with Liventa&rsquo;s
distribution capability to orthopedic care providers. The implementation of Cryoport&rsquo;s solution will eliminate dry ice shipping
and related risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based
orthopedic therapies. This will enable Liventa to better serve small or mobile clinics, pharmacies, family practice, and orthopedic
specialty care providers. Surgical centers and hospitals will also benefit from better logistics and the elimination of issues
surrounding dry ice transport and storage. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms. Liventa also agreed to certain performance criteria and the issuance of 150,000 shares of its common stock to Cryoport in
exchange for the exclusive right to offer, market and promote Cryoport Express<SUP>&reg;</SUP> Solutions for cellular-based therapies
requiring cryogenic temperatures for use in orthopedic indications in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We offer our solutions
to companies in the&nbsp;life sciences industry and specific verticals including manufacturers of stem cells and cell lines, diagnostic
laboratories, bio-pharmaceuticals, contract research organizations, in-vitro fertilization, cord blood, vaccines, tissue, animal
husbandry, and other producers of commodities requiring reliable frozen solutions for logistics problems. These companies operate
within heavily regulated environments and as such, changing vendors and distribution practices typically require a number of steps
which may include the audit of our facilities, review of our procedures, qualifying us as a vendor, and performing test shipments.
This process can take up to nine months or longer to complete prior to a potential customer adopting one or more of our Cryoport
Express<SUP>&reg;</SUP> Solutions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Going Concern</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The consolidated financial
statements have been prepared using the accrual method of accounting in accordance with accounting principles generally accepted
in the United States of America (&ldquo;U.S. GAAP&rdquo;) and have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities in the normal course of business. We have sustained operating losses since
our inception and have used substantial amounts of working capital in our operations. Further, at March 31, 2014, we had an accumulated
deficit of $85.9 million. During the year ended March&nbsp;31, 2014, we used cash in operations of $4.4 million and had a net loss
of $19.6 million, which included a one-time, non-cash debt conversion expense of $13.7 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express<SUP>&reg;</SUP>
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at March 31, 2014, additional funds raised subsequent to March 31, 2014 through the current
preferred stock offering (see Note 15), together with the revenues generated from our services will be sufficient to sustain our
planned operations into the second quarter of fiscal year 2015; however, we must obtain additional capital to fund operations thereafter
and for the achievement of sustained profitable operations. These factors raise substantial doubt about our ability to continue
as a going concern. We are currently working on funding alternatives in order to secure sufficient operating capital to allow us
to continue to operate as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express<SUP>&reg;</SUP> Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis and on acceptable terms or at all. Management&rsquo;s inability to successfully achieve significant
revenue increases or implement cost reduction strategies or to complete any other financing will adversely impact our ability to
continue as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts
to become a self-sustaining financially viable entity.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Note 2.&nbsp;Summary
of Significant Accounting Policies</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Basis of Presentation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The accompanying consolidated
financial statements have been prepared in accordance with U.S. GAAP.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Principles
of Consolidation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The consolidated financial
statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany accounts
and transactions have been eliminated.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Use of Estimates</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts. The Company&rsquo;s
significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance for inventory obsolescence,
deferred taxes and their accompanying valuations, valuation of derivative liabilities and valuation of common stock, warrants and
stock options issued for products or services.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Fair Value
of Financial Instruments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s financial
instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible notes payable,
accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value at March&nbsp;31, 2014
and 2013 due to their short-term nature. The difference between the fair value and recorded values of the related party notes payable
is not significant.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cash and Cash
Equivalents</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Concentrations
of Credit Risk</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company maintains
its cash accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation
(&ldquo;FDIC&rdquo;) with basic deposit insurance coverage limits up to $250,000 per owner. At March&nbsp;31, 2014 and 2013, the
Company had cash balances of approximately $159,000 and $214,000, respectively, which exceeded the FDIC insurance limit. The Company
performs ongoing evaluations of these institutions to limit its concentration risk exposure.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Customers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company grants credit
to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues from
international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company&rsquo;s ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at March&nbsp;31, 2014 and 2013 are net of reserves for doubtful accounts of $24,600 and $8,700,
respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The majority of the Company&rsquo;s
customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration of accounts
receivable within these industries, which is subject to normal credit risk. At March 31, 2014, there was one customer that accounted
for 30.6% of net accounts receivable. No other single customer owed us more than 10% of net accounts receivable at March 31, 2014
and 2013. The Company maintains reserves for bad debt and such losses, in the aggregate, historically have not exceeded our estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During fiscal years 2014 and 2013, the Company
had revenues from foreign customers of approximately $434,000 and $161,000, respectively, which constituted approximately 16.3%
and 14.6% of total revenues, respectively. For the fiscal year ended March&nbsp;31, 2014, there was one customer that accounted
for 30.8% of net revenues. No other single customer generated over 10% of net revenues during 2014 and 2013.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Inventories</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s inventories
consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned to the Company
with the containers at the culmination of the customer&rsquo;s shipping cycle. Inventories are stated at the lower of cost or current
estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire method.
Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of its inventories
to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs of inventories
are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and finished goods
include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level of inventories
considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories at its
net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic conditions,
customer demand, competition or other relevant factors differ from expectations. These estimates require us to make assessments
about future demand for the Company&rsquo;s products in order to categorize the status of such inventories items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company&rsquo;s forecasts of market conditions,
industry trends, competition and other factors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Property and
Equipment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements are similar
to the accounting standard for leases since they convey the right to use the container over a period of time. The Company retains
the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer&rsquo;s shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Property and equipment
are recorded at cost. Cryogenic shippers, which comprise of 89% and 87% of the Company&rsquo;s net property and equipment balance
at March&nbsp;31, 2014 and 2013, respectively, are depreciated using the straight-line method over their estimated useful lives
of three years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally
three to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of
the asset or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful
life of the assets or term of the lease, whichever is shorter and included in depreciation expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Intangible
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Intangible assets are
comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and trademarks,
which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes certain
costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Long-lived
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets&rsquo; carrying value, and accordingly, we have not recognized any impairment losses through March&nbsp;31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Deferred Financing
Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Deferred financing costs
represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred
financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In connection with the
5% Bridge Notes, during the third and fourth quarter of fiscal 2014, the Company incurred financing costs that have been capitalized
and are being amortized over the term of the convertible bridge notes payable using the straight-line method which approximates
the effective interest method (see Note 8).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">During the year ended
March&nbsp;31, 2013, the Company incurred $103,542 of offering costs in connection with the private placement that closed in February
and March 2012, which were charged to additional paid-in capital and netted against the proceeds received in the private placements.
As of March&nbsp;31, 2013, offering costs of $53,747 related to the private placement were included in accounts payable and accrued
expenses in the accompanying consolidated balance sheet.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Convertible
Debentures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature (&ldquo;BCF&rdquo;). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Derivative
Liabilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Certain of the Company&rsquo;s
issued and outstanding common stock purchase warrants which have exercise price reset features are treated as derivatives for accounting
purposes. The common stock purchase warrants were not issued with the intent of effectively hedging any future cash flow, fair
value of any asset, liability or any net investment in a foreign operation. The warrants do not qualify for hedge accounting, and
as such, all future changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants
are exercised, expire or the related rights have been waived. These common stock purchase warrants do not trade in an active securities
market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model (&ldquo;Black-Scholes&rdquo;)
(see Note 9).</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Income Taxes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company accounts for
income taxes under the provision of the Financial Accounting Standards Board (&ldquo;FASB&rdquo;) Accounting Standards Codification
(&ldquo;ASC&rdquo;) 740, <I>Income Taxes</I>, or ASC 740. As of March 31, 2014 and 2013, there were no unrecognized tax benefits
included in the accompanying consolidated balance sheets that would, if recognized, affect the effective tax rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight of available
evidence, the Company&rsquo;s management has determined that it is more likely than not that the net deferred tax assets will not
be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company&rsquo;s
income tax provision consists of state minimum taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s policy
is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest
or penalties on its consolidated balance sheets at March&nbsp;31, 2014 and 2013, respectively and has not recognized interest and/or
penalties in the consolidated statement of operations for the years ended March&nbsp;31, 2014 and 2013. The Company is subject
to taxation in the U.S. and various state jurisdictions. As of March&nbsp;31, 2014, the Company is no longer subject to U.S. federal
examinations for years before 2010 and for California franchise and income tax examinations for years before 2009. However, to
the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses were generated
and carried forward, and make adjustments up to the amount of the net operating loss carry forward amount. The Company is not currently
under examination by U.S. federal or state jurisdictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Revenue Recognition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements are similar
to the accounting standard for leases since they convey the right to use the containers over a period of time. The Company retains
title to the containers and provides its customers the use of the container for a specified shipping cycle. At the culmination
of the customer&rsquo;s shipping cycle, the container is returned to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the enclosed materials, and at
the time that collectability is reasonably certain. Revenue is based on gross net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel. Revenue is recognized for these
services as services are rendered and at the time that collectability is reasonably certain.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Accounting
for Shipping and Handling Revenue, Fees and Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying consolidated statements of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Research and
Development Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Expenditures relating
to research and development are expensed in the period incurred.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Stock-based
Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company accounts for
stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all stock-based
payments to employees and directors, including grants of employee stock options and warrants, to be recognized based upon their
fair values. The fair value of stock-based awards is estimated at grant date using Black-Scholes and the portion that is ultimately
expected to vest is recognized as compensation cost over the requisite service period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Since stock-based compensation
is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate
to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods
if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in which the
change in estimate occurs. The estimated forfeiture rates at March&nbsp;31, 2014 and 2013 was zero as the Company has not had a
significant history of forfeitures and does not expect significant forfeitures in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Cash flows from the tax
benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company&rsquo;s loss position, there were no such tax benefits during years ended March&nbsp;31,
2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company&rsquo;s
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s stock-based
compensation plans are discussed further in Note 12.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Issuances of the Company&rsquo;s
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i)&nbsp;the date at which a commitment for performance to earn
the equity instruments is reached (a &ldquo;performance commitment&rdquo; which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii)&nbsp;the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Basic and Diluted Net
Income (Loss) Per Share</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We calculate basic and
diluted net income (loss) per share using the weighted average number of common shares outstanding during the periods presented,
and adjust the amount of net income (loss) used in this calculation for preferred stock dividends (if any) declared during the
period. In periods of a net loss position, basic and diluted weighted average shares are the same. For the diluted earnings per
share calculation, we adjust the weighted average number of common shares outstanding to include dilutive stock options, warrants
and other common stock equivalents outstanding during the periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following shows the
amounts used in computing net loss per share for each of the two years in the period ended March 31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(19,565,426</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(6,382,433</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Less:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in; padding-left: 9pt">Preferred dividends paid in cash or stock</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Loss attributable to Cryoport stockholders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(19,565,426</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6,382,433</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Weighted average shares issued and outstanding</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">48,850,513</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">37,760,628</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Basic and diluted net loss per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.40</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.17</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following table sets
forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been anti-dilutive:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Years Ended March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Stock options</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">3,458,313</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">411,762</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,221,728</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6,680,041</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">411,762</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">Segment Reporting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We currently operate in
one reportable segment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Fair Value
Measurements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;1:</I>&nbsp;Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level&nbsp;1 inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;2:</I>&nbsp;Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;3:</I>&nbsp;Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level&nbsp;3
inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In determining fair value,
we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible, as well as consider counterparty credit risk in the assessment of fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We did not elect the fair
value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value. Therefore,
material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and payable, are
reported at their historical carrying values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The carrying values of
our assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014 and 2013 are
classified in the table below in one of the three categories of the fair value hierarchy described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair Value Measurements</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 1</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level 2</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Level&nbsp;3</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: 0in">March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; padding-bottom: 2.5pt; text-indent: 0in; padding-left: 9pt">Derivative liabilities</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">20,848</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">20,848</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 22.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The following summarizes
the activity of Level&nbsp;3 inputs measured on a recurring basis for the years ended March&nbsp;31, 2014 and 2013:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fair&nbsp;Value&nbsp;Measurements&nbsp;of <BR> Unobservable Inputs (Level 3)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 77%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Balance at March 31, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 20%; text-align: right">37,334</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Transfers in / (out) of Level&nbsp;3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Adjustments resulting from a change in fair value of derivative liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(16,486</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Balance at March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,848</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Transfers in / (out) of Level&nbsp;3</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Adjustments resulting from a change in fair value of derivative liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(20,848</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Balance at March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">The fair value of derivative
liabilities were measured on their respective origination dates and at the end of each reporting period using Level&nbsp;3 inputs.
The significant assumptions we use in the calculations under Black-Scholes as of March 31, 2014 and 2013 included an expected term
based on the remaining contractual life of the warrants, a risk-free interest rate based upon observed interest rates appropriate
for the expected term of the instruments, volatility based on the historical volatility of our common stock, and a zero dividend
rate based on our past, current and expected practices of granting dividends on common stock.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Foreign Currency Translation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">We record foreign currency
transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included in results
of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">Recent Accounting Pronouncements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In July 2013, the FASB
issued ASU No. 2013-11, &ldquo;Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax
Loss, or a Tax Credit Carryforward Exists.&rdquo; ASU 2013-11 provides explicit guidance on the financial statement presentation
of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.
The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15,
2013, with an option for early adoption. This pronouncement is effective for reporting periods beginning on or after January 1,
2013. The adoption of ASU 2011-11 did not have a material impact on the Company&rsquo;s consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 24.5pt">In May 2014, the FASB
issued ASU No. 2014-09, &ldquo;Revenue from Contracts with Customers&rdquo;. ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, &quot;Revenue Recognition&quot;. The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-align: justify; text-indent: 24.5pt">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 3.&nbsp;Inventories</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Inventories consist
of the following:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">18,283</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">28,533</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Finished goods</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,420</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">10,679</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">29,703</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">39,212</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 4.&nbsp;Property
and Equipment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Property and equipment
consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March &nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Cryogenic shippers</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,037,286</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">962,565</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Furniture and fixtures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,746</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,746</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Machinery and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">386,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">380,526</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Leasehold improvements</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,913</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">30,913</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,485,676</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,404,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Less accumulated depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,076,784</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(899,265</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">408,892</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">505,485</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Total depreciation
and amortization expense related to property and equipment amounted to $219,400 and $281,700 for the years ended March&nbsp;31,
2014 and 2013, respectively.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 5.&nbsp;Intangible
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Intangible assets
consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Gross <BR> Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accumulated <BR> Amortization</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net <BR> Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted <BR> Average <BR> Amortization <BR> Period (years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Patents and trademarks</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">154,214</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(55,712</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">98,502</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: center">4.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Software development costs for internal use</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">547,127</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(465,543</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">81,584</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">1.6</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Total intangible assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">701,341</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(521,255</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">180,086</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31, 2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Gross <BR> Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accumulated <BR> Amortization</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Net <BR> Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted <BR> Average <BR> Amortization <BR> Period (years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Patents and trademarks</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">154,214</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(54,251</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">99,963</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: center">5.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Software development costs for internal use</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">547,127</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(374,827</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">172,300</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">2.6</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt">Total intangible assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">701,341</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(429,078</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">272,263</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Amortization expense
for intangible assets for the years ended March 31, 2014 and 2013 was $92,200 and $112,300, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Future amortization
of intangible assets is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Years Ending March&nbsp;31,</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: left; text-indent: 0in">2015</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">62,884</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">49,770</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,199</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,617</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">2019</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">19,616</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">180,086</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 6.&nbsp;Accrued
Compensation and Related Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Accrued compensation
and related expenses consist of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Accrued salary and wages</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">80,328</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">85,554</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Accrued paid time off</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,166</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,376</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Accrued board of director fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">214,553</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Other accrued obligations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,241</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,502</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">454,288</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">217,432</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 7. Related
Party Transactions</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Related
Party Notes Payable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of March&nbsp;31,
2014 and 2013, the Company had aggregate principal balances of $555,500 and $651,500, respectively, in outstanding unsecured indebtedness
owed to four related parties, including former members of the Company&rsquo;s board of directors, representing working capital
advances made to the Company from February 2001 through March 2005. These notes bear interest at the rate of 6%&nbsp;per annum
and provide for aggregate monthly principal payments which began April&nbsp;1, 2006 of $2,500, and which increased by an aggregate
of $2,500 every nine months to a maximum of $10,000 per month. As of March 31, 2014, the aggregate principal payments totaled $8,000
per month. Any remaining unpaid principal and accrued interest is due at maturity on various dates through March&nbsp;1, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Related-party interest
expense under these notes was $36,500 and $42,200 for the years ended March 31, 2014 and 2013, respectively. Accrued interest,
which is included in related party notes payable in the accompanying consolidated balance sheets, amounted to $802,600 and $766,200
as of March 31, 2014 and 2013, respectively.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Convertible
Bridge Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During the year ended
March 31, 2014, the Company issued to certain accredited investors various unsecured promissory notes with the terms as described
under Note 8. These unsecured promissory notes included $120,000 of the 5% Bridge Notes (as defined below) issued to Jerrell Shelton,
the Company&rsquo;s Chief Executive Officer, $100,000 of the Bridge Notes (as defined below) issued to Richard Rathmann, a member
of the Board of Directors of the Company, $200,000 of the Bridge Notes and $100,000 of the 5% Bridge Notes issued to GBR Investments,
LLC, of which Richard Rathmann is the manager.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 8. Convertible
Notes Payable</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">2013 and
2014 Bridge Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In the fourth quarter
of fiscal 2013 and first nine months of fiscal 2014, the Company issued to certain accredited investors unsecured convertible promissory
notes (the &ldquo;Bridge Notes&rdquo;) in the original principal amount of $1,294,500 and $2,765,301, respectively, for total principal
of $4,059,801, pursuant to the terms of subscription agreements and letters of investment intent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Bridge Notes accrued
interest at a rate of 15%&nbsp;per annum from date of issuance until January&nbsp;31, 2013 and at a rate of 5%&nbsp;per annum from
February&nbsp;1, 2013 through the date of payment, in each case on a non-compounding basis. All principal and interest under the
Bridge Notes were due on December&nbsp;31, 2013. Accrued interest related to these notes amounted to $0 and $9,900, as of March
31, 2014 and 2013, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In connection with
the issuance of the Bridge Notes to three accredited investors totaling $400,000 in June, July and August 2013, the Company granted
these investors warrants to purchase 1,797,457 shares of common stock at an exercise prices ranging from $0.19 to $0.29 per share.
The relative fair value of the warrants of $199,200 was recorded as a debt discount and was amortized to interest expense using
the straight-line method which approximated the effective interest method over the term of the Bridge Notes. These Bridge Notes
accrued interest at 8% per annum from the date of issuance through date of payment, on a non-compounding basis. All other terms
of these Bridge Notes are consistent with the rest of the Bridge Notes. Upon conversion of the Bridge Notes in September and October
2013, the remaining unamortized debt discount was amortized to interest expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In September and October
2013, the Bridge Note holders accepted an offer by the Company and converted an aggregate of $4,127,202 of outstanding principal
and accrued interest under the Bridge Notes into 20,636,011 units (the &ldquo;Units&rdquo;) at a price of $0.20 per Unit, with
each Unit consisting of (i) one share of common stock of the Company (&ldquo;Common Stock&rdquo;) and (ii)&nbsp;one warrant to
purchase one share of Common Stock at an exercise price of $0.37 per share.&nbsp;The warrants are exercisable beginning on March
31, 2014 and have a term of five years from date of issuance. As the transaction was considered an induced conversion under the
applicable accounting guidance, the Company recognized $13,713,767 in debt conversion expense representing the fair value of the
securities transferred in excess of the fair value of the securities issuable upon the original conversion terms of the Bridge
Notes. The Company calculated the fair value of the common stock issued by using the closing price of the stock on the date of
issuance. The fair value of the warrants was calculated using Black-Scholes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Upon conversion of
the Bridge Notes, the remaining unamortized debt discount was amortized to interest expense. During the years ended March 31, 2014
and 2013, the Company amortized $199,200 and $0, respectively, to interest expense.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">5% Bridge
Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes (the &ldquo;5% Bridge
Notes&rdquo;) in the original principal amount of $1,793,000, pursuant to the terms of subscription agreements and letters of investment
intent. This includes two notes in the aggregate amount of $120,000 issued to Jerrell Shelton, the Company&rsquo;s Chief Executive
Officer, on December 11, 2013 and January 10, 2014 as well as a note in the amount of $100,000 issued to GBR Investments, LLC on
February 3, 2014, of which Richard Rathmann, a Director of the Company, is the manager.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The 5% Bridge Notes
accrue interest at a rate of 5%&nbsp;per annum from the date of issuance through date of payment, on a non-compounding basis. All
principal and interest under the 5% Bridge Notes becomes due on June 30, 2014. Accrued interest related to these notes of $14,100
is included in convertible debentures payable and accrued interest, net of discount in the accompanying consolidated balance sheet
at March 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In connection with
the issuance of the 5% Bridge Notes, the Company granted these investors warrants to purchase 896,500 shares of common stock at
an exercise price of $0.49 per share. The warrants are exercisable on May 31, 2014 and expire on December 31, 2018. The relative
fair value of the warrants of $279,100 was recorded as a debt discount and is amortized to interest expense using the straight-line
method which approximates the effective interest method over the term of the 5% Bridge Notes. &nbsp;During the year ended March
31, 2014, the Company amortized $94,300 of the debt discount to interest expense for these notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In the event the Company
designates and issues one or more types of equity securities while the 5% Bridge Notes are outstanding (&ldquo;Subsequent Offering&rdquo;),
the Company must provide written notice to the holders of the notes and such holders will have a right to convert up to all of
the principal and accrued unpaid interest on the notes into shares of such equity securities on the same terms as the Subsequent
Offering during the ten days following the provision of such notice. The conversion price for these equity securities will be 90%
of the offering price for the equity securities. The Company was unable to value the conversion feature of these 5% Bridge Notes
given the absence of a conversion rate and the convertibility of the 5% Bridge Notes being contingent upon the completion of a
Subsequent Offering. In May 2014, note holders with the principal amount of $1,743,000 converted their notes (see Note 15).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Emergent Financial
Group, Inc. (&ldquo;Emergent&rdquo;) served as the Company&rsquo;s placement agent in connection with the original placement of
the Bridge Notes and 5% Bridge Notes and earned a commission of 9% of the original principal balance of such notes. Debt financing
costs of $375,900 and $116,500 in 2014 and 2013, respectively, comprised primarily of the commission earned by Emergent, of which
$98,400 and $107,800 is recorded in other current assets in the accompanying consolidated balance sheets as of March 31, 2014 and
2013, respectively, and are being&nbsp;amortized to interest expense using the straight-line method which approximates the effective
interest method over the term of the notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In connection with
the conversion of the Bridge Notes in September and October 2013, Emergent received warrants to purchase 1,911,259 shares of common
stock at an exercise price of $0.20 per share. The warrants were exercisable beginning March 31, 2014 and have an expiration date
of June 30, 2018. Emergent did not receive any compensation with respect to the 5% Bridge Note in the principal amount of $120,000
issued to Jerrell Shelton, the Chief Executive Officer of the Company and $100,000 issued to GBR Investments, LLC , of which Richard
Rathmann, a Director of the Company, is the manager. During the years ended March 31, 2014 and 2013, the Company amortized $385,400
and $8,700, respectively, to interest expense.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 9. Derivative
Liabilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In accordance with
applicable accounting guidance, certain of the Company&rsquo;s outstanding warrants to purchase shares of common stock were treated
as derivatives because these instruments had reset or ratchet provisions in the event the Company raises additional capital at
a lower price, among other adjustments. As such, the fair value of these common stock purchase warrants were treated as derivative
liabilities since their date of issuance or modification. Changes in fair value were recorded as non-operating, non-cash income
or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company
will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date,
the Company will record non-operating, non-cash income. As of March 31, 2014 and 2013, the Company had derivative warrant liabilities
with fair values of $0 and $20,848, respectively. The derivative warrants expire in April 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During the year ended
March 31, 2014 and 2013, the Company recognized aggregate gains of $20,848 and $16,486, respectively, due to the change in fair
value of its derivative instruments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s
common stock purchase warrants do not trade in an active securities market, and as such, the Company estimated the fair value of
these warrants using Black-Scholes using the following assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 80%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP COLSPAN="3" STYLE="border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>March 31,</b></font></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 72%; padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="width: 1%; padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="width: 12%; border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>2014</b></font></td>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; border-bottom: black 1pt solid; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>2013</b></font></td>
    <TD NOWRAP STYLE="width: 1%; padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Expected life (years)</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">0.01 to 0.81</font></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">1.01 to 1.81</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Risk-free interest rate</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">0.03%&nbsp;-&nbsp;0.15%</font></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">0.14%-0.33%</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Volatility</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">70% - 144%</font></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">129% - 158%</font></td>
    <TD>&nbsp;</td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Dividend yield</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">&mdash;</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Historical volatility
was computed using daily pricing observations for recent periods that correspond to the remaining term of the warrants, which had
an original term of five years from the date of issuance. The expected life is based on the remaining term of the warrants. The
risk-free interest rate is based on U.S. Treasury securities with a maturity corresponding to the remaining term of the warrants.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 10.&nbsp;Commitments
and Contingencies</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Facility
and Equipment Leases</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We lease 11,900 square
feet of corporate, research and development, and warehouse facilities in Lake Forest, California under an operating lease expiring
June&nbsp;30, 2015 which includes the right to cancel the lease with a minimum of 120 day written notice at any time after December&nbsp;31,
2012. We also lease corporate facilities in San Diego, California under a non-cancelable operating lease expiring December 31,
2014. Each lease agreement contains certain scheduled rent increases which are accounted for on a straight-line basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Future minimum lease
payments are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify">Years ending March 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Operating<BR> Leases</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: justify; text-indent: 0in">2015</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">192,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">2016</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">26,700</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">219,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Rent expense for the
years ended March 31, 2014 and 2013 was approximately $178,000 and $204,000, respectively.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Employment
Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We have entered into
employment agreements with certain of our officers under which payment and benefits would become payable in the event of termination
by us for any reason other than cause, or upon a change in control of our Company, or by the employee for good reason.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Consulting
and Engineering Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Effective November&nbsp;1,
2010, the Company entered into a Second Amendment to Master Consulting and Engineering Services Agreement (the &ldquo;Second Amendment&rdquo;)
with KLATU Networks, LLC (&ldquo;KLATU&rdquo;), which amended the Master Consulting and Engineering Services Agreement between
the parties dated as of October&nbsp;9, 2007 (the &ldquo;Agreement&rdquo;), as amended by the First Amendment to Master Consulting
and Engineering Services Agreement between the parties dated as of April&nbsp;23, 2009. The parties entered into the Second Amendment
to clarify their mutual intent and understanding that all license rights granted to the Company under the Agreement, as amended,
shall survive any termination or expiration of the Agreement. In addition, in recognition that the Company has paid KLATU less
than the market rate for comparable services, the Second Amendment provides that if the Company terminates the Agreement without
cause, which the Company has no intention of doing, or liquidates, KLATU shall be entitled to receive additional consideration
for its services provided from the commencement of the Agreement through such date of termination, which additional compensation
shall not be less than $2 million plus two times the &ldquo;cost of work&rdquo; (as defined in the Agreement). Any such additional
compensation would be payable in three equal installments within 12 months following the date the amount of such additional compensation
is determined. If KLATU terminates that agreement, no such payments are payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The agreement provides
for one year terms ending on December&nbsp;31 of each year, but it automatically renews for one year periods unless otherwise terminated.
Consulting fees for services provided by KLATU were $395,300 and $401,100 for the years ended March&nbsp;31, 2014 and 2013, respectively.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Litigation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company may become
a party to product litigation in the normal course of business. The Company accrues for open claims based on its historical experience
and available insurance coverage. In the opinion of management, there are no legal matters involving the Company that would have
a material adverse effect upon the Company&rsquo;s consolidated financial condition or results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Indemnities
and Guarantees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has made
certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation
to certain actions or transactions. The guarantees and indemnities do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for
these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated
balance sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company indemnifies
its directors, officers, employees and agents, as permitted under the laws of the States of California and Nevada. In connection
with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. The
duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 11.&nbsp;Stockholders&rsquo;
Equity</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Authorized
Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has 250,000,000
authorized shares of common stock with a par value of $0.001 per share. In September 2011, our stockholders approved an amendment
to the Amended and Restated Articles of Incorporation to authorize a class of undesignated or &quot;blank check&quot; preferred
stock, consisting of 2,500,000 shares at $0.001 par value per share. Shares of preferred stock may be issued in one or more series,
with such rights, preferences, privileges and restrictions to be fixed by the Company&rsquo;s board of directors. In May 2014,
our stockholders approved a Certificate of Designation, which designated 800,000 shares of preferred stock as Class A Preferred
Stock (See Note 15).</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Common
Stock Reserved for Future Issuance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of March 31, 2014,
approximately 73.1&nbsp;million shares of common stock were issuable upon conversion or exercise of rights granted under prior
financing arrangements, stock options and warrants, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: left; text-indent: 0in">Exercise of stock options</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">11,894,205</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Exercise of warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">61,194,343</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Total shares of common stock reserved for future issuances</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">73,088,548</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 12.&nbsp;Stock-Based
Compensation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Warrant
Activity</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We typically issue
warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services
rendered by placement agents and consultants. Included in outstanding warrants are 262,856 and 312,856 warrants at March 31, 2014
and 2013, respectively issued to employees or directors. Our outstanding warrants expire on varying dates through July 2019. A
summary of warrant activity is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of <BR> Shares</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted- <BR> Average <BR> Exercise <BR> Price/Share</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted- <BR> Average <BR> Remaining <BR> Contractual <BR> Term&nbsp;(Years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Aggregate <BR> Intrinsic <BR> Value (1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Outstanding&nbsp;&mdash; March 31, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">37,144,504</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1.18</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Issued</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(123,376</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(23,929</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8.89</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Outstanding&nbsp;&mdash; March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,027,199</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.18</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Issued</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,241,227</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.35</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(926,315</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.22</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(39,728</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8.49</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(108,040</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7.96</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Outstanding&nbsp;&mdash; March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">61,194,343</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.84</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.9</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,987,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in">Vested (exercisable)&nbsp;&mdash; March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,297,010</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.84</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.9</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,960,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
    <TD STYLE="width: 0px">&nbsp;</td>
    <TD STYLE="width: 36px; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Aggregate intrinsic value represents the difference between the exercise price of the warrant and the closing market price of the common stock on March&nbsp;31, 2014, which was $0.52 per share.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following table
summarizes information with respect to warrants outstanding and exercisable at March 31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 87%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Exercise Price</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number <BR> Outstanding</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted- <BR> Average <BR> Remaining <BR> Contractual <BR> Life (Years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted- <BR> Average <BR> Exercise&nbsp;Price</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number <BR> Exercisable</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted- <BR> Average <BR> Exercise&nbsp;Price</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 35%; text-align: left; text-indent: 0in">$0.19 &ndash; 0.20</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">2,437,574</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">4.3</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.20</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">2,437,574</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.20</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">$0.21 &ndash; 0.37</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,980,838</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.37</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,980,838</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.37</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">$0.38 &ndash; 0.69</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,932,429</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.67</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,035,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.69</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">$0.70 &ndash; 0.92</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,431,557</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.77</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,431,557</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.77</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">$0.93 &ndash; 10.80</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,411,945</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">0.9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">3.53</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,411,112</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">3.53</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">61,194,343</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,297,010</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Stock
Options</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We have three stock
incentive plans: the 2002 Stock Incentive Plan, or the 2002 Plan, the 2009 Stock Incentive Plan, or the 2009 Plan and the 2011
Stock Incentive Plan, or the 2011 Plan (collectively, the &ldquo;Plans&rdquo;). The 2002 Plan authorizes the grant of incentive
awards, including stock options, for the purchase of up to a total of 500,000&nbsp;shares and has no shares available for future
issuances as the 2002 Plan has expired. Subsequent to the adoption of the 2011 Plan, no new options have been granted pursuant
the 2009 Plan or 2002 Plan. In September 2009, the stockholders approved the issuance of up to 1,200,000&nbsp;shares of common
stock available for issuance under the 2009 Plan and as of March 31, 2014, the Company has 299,741 shares available for future
awards under the 2009 Plan. In September 2011, the stockholders authorized the issuance of up to 2,300,000 shares of the Company&rsquo;s
common stock. On September&nbsp;13, 2012, the stockholders approved an increase to the number of shares of the Company&rsquo;s
common stock available for issuance by 3,000,000 shares. On September&nbsp;6, 2013 the stockholders approved an increase to the
number of shares of the Company&rsquo;s common stock available for issuance by 7,100,000 shares. As of March 31, 2014, there were
7,405,004 incentive awards available for grant under the 2011 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During each of the
two years in the period ended March 31, 2014, we granted stock options at exercise prices equal to or greater than the quoted market
price of our common stock on the grant date. The fair value of each option grant was estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted average assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31,</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Expected life (years)</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">1.6 &ndash; 6.02</font></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">2.6 -10.0</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">0.19%&nbsp;-&nbsp;1.84%</font></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">0.63%-2.22%</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Volatility</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">127% - 140%</font></TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: center"><font style="font-size: 10pt">124% - 166%</font></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; text-indent: -12pt; padding-left: 12pt">Dividend yield</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: center">0%</TD><TD NOWRAP STYLE="width: 1%; text-align: left"></TD><TD NOWRAP STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: center">0%</TD><TD STYLE="width: 1%; text-align: left"></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The expected option
life assumption is estimated based on the simplified method. Accordingly, the Company has utilized the average of the contractual
term of the options and the weighted average vesting period for all options to calculate the expected option term. The risk-free
interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options.
The expected volatility is based on the historical volatility of our stock commensurate with the expected life of the stock-based
award. We do not anticipate paying dividends on the common stock in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We recognize stock-based
compensation cost over the vesting period using the straight-line single option method. Stock-based compensation expense is recognized
only for those awards that are ultimately expected to vest. An estimated forfeiture rate has been applied to unvested awards for
the purpose of calculating compensation cost. The estimated forfeiture rate of 0% per year is based on the historical forfeiture
activity of unvested stock options. These estimates are revised, if necessary, in future periods if actual forfeitures differ from
the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">A summary of stock
option activity is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR> Shares</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Exercise<BR> Price/Share</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Remaining<BR> Contractual<BR> Term&nbsp;(Years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Aggregate<BR> Intrinsic<BR> Value (1)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: -12pt; padding-left: 12pt">Outstanding&nbsp;&mdash; March 31, 2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,355,132</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1.14</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Granted (weighted-average fair value of $0.26 per share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,063,109</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.29</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(322,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.98</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -12pt; padding-left: 0.5in">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Outstanding&nbsp;&mdash; March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,095,741</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.47</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Granted (weighted-average fair value of $0.24 per share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,673,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.28</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(657,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 0.5in">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(197,808</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -12pt; padding-left: 0.5in">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6.00</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -12pt; padding-left: 12pt">Outstanding&nbsp;&mdash; March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,894,205</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.35</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8.6</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,578,900</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -12pt; padding-left: 12pt">Vested (exercisable)&nbsp;&mdash; March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5,543,002</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.42</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8.0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,110,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -12pt; padding-left: 12pt">Unvested (unexercisable)&nbsp;&mdash; March 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6,351,203</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.30</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3.0</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,468,300</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -24.5pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 0px">&nbsp;</td>
    <td style="width: 33px; text-align: left; text-indent: 0in"><font style="font-size: 10pt">(1)</font></td>
    <td style="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of the common stock on March&nbsp;31, 2014, which was $0.52 per share.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following table
summarizes information with respect to stock options outstanding and exercisable at March 31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">Exercise Price</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number<BR> Outstanding</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Remaining<BR> Contractual<BR> Life (Years)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Exercise<BR> Price</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number<BR> Exercisable</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Exercise<BR> Price</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 25%; text-align: left; text-indent: 0in">$0.17 &ndash; 0.48</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">10,523,036</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">8.9</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.27</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">4,428,083</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">0.27</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">$0.52 &ndash; 0.98</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,234,469</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.3</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.66</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">987,594</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.66</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">$1.05 &ndash; 2.20</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,225</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.69</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">$4.30 &ndash; 8.31</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">88,100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">2.3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">4.74</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">88,100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; text-align: right">4.74</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">11,894,205</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5,543,002</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of March 31, 2014,
there was unrecognized compensation expense of $1.6&nbsp;million related to unvested stock options, which we expect to recognize
over a weighted average period of 3.0&nbsp;years.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 13. Income
Taxes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Significant components
of the Company&rsquo;s deferred tax assets as of March&nbsp;31, 2014 and 2013 are shown below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">(000&rsquo;s)</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Deferred tax assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; text-indent: -12pt; padding-left: 12pt">Net operating loss carryforward</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">15,379</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">13,505</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Research credits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Expenses recognized for granting of options and warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,319</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Accrued expenses and reserves</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -12pt; padding-left: 12pt">Valuation allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(17,225</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(14,907</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Based on the weight
of available evidence, the Company&rsquo;s management has determined that it is more likely than not that the net deferred tax
assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets.
The Company&rsquo;s income tax provision consists of state minimum taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The income tax provision
differs from that computed using the federal statutory rate applied to income before taxes as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif; margin-left: 1in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Computed tax benefit at federal statutory rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(6,650,000</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(2,169,000</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">State tax, net of federal benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(327,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(359,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Warrant MTM Adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Induced conversion costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,663,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Permanent items and other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,600</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">215,600</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Valuation allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,318,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,319,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">At March&nbsp;31,
2014, the Company has federal and state net operating loss carryforwards of approximately $39,086,000 and $35,759,000 which will
begin to expire in 2020, unless previously utilized, and as of 2012 have already begun to for state carryforwards. At March&nbsp;31,
2014, the Company has federal and California research and development tax credits of approximately $18,000 and $64,000, respectively.
The federal research tax credit begins to expire in 2026 unless previously utilized and the California research tax credit has
no expiration date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Utilization of the
net operating loss and research and development carryforwards might be subject to a substantial annual limitation due to ownership
change limitations that may have occurred or that could occur in the future, as required by Section&nbsp;382 of the Internal Revenue
Code of 1986, as amended (the &ldquo;Code&rdquo;), as well as similar state and foreign provisions. These ownership changes may
limit the amount of NOL and R&amp;D credit carryforwards that can be utilized annually to offset future taxable income and tax,
respectively. In general, an &ldquo;ownership change&rdquo; as defined by Section&nbsp;382 of the Code results from a transaction
or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding
stock of a company by certain stockholders or public groups. Since the Company&rsquo;s formation, the Company has raised capital
through the issuance of capital stock on several occasions which, combined with the purchasing stockholders&rsquo; subsequent disposition
of those shares, may have resulted in such an ownership change, or could result in an ownership change in the future upon subsequent
disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has not
completed a study to assess whether an ownership change has occurred. If the Company has experienced an ownership change, utilization
of the NOL or R&amp;D credit carryforwards would be subject to an annual limitation under Section&nbsp;382 of the Code, which is
determined by first multiplying the value of the Company&rsquo;s stock at the time of the ownership change by the applicable long-term,
tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a
portion of the NOL or R&amp;D credit carryforwards before utilization. Further, until a study is completed and any limitation is
known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Due to the existence
of the valuation allowance, future changes in the Company&rsquo;s unrecognized tax benefits will not impact its effective tax rate.
Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets
with a corresponding reduction of the valuation allowance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On September 13, 2013,
the U.S. Treasury Department released final income tax regulations on the deduction and capitalization of expenditures related
to tangible property. These final regulations apply to tax years beginning on or after January 1, 2014, and may be adopted in earlier
years. The Company does not intend to early adopt the tax treatment of expenditures to improve tangible property and the capitalization
of inherently facilitative costs to acquire tangible property as of January 1, 2013. The tangible property regulations will require
the Company to make additional tax accounting method changes as of January 1, 2014; however, management does not anticipate the
impact of these changes to be material to the Company&rsquo;s consolidated financial position, its results of operations and its
footnote disclosures.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 14.&nbsp;Quarterly
Financial Data (Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">A summary of quarterly
financial data is as follows ($ in &lsquo;000&rsquo;s):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Quarter Ended</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">June 30</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September&nbsp;<BR> 30</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December <BR> 31</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">March 31</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12pt; padding-left: 12pt">Year ended March 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 48%; text-align: left; text-indent: -12pt; padding-left: 12pt">Total revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">488</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">580</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">757</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">835</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Gross margin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">72</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">167</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">143</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,260</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,287</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,257</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,274</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,324</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(14,960</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,840</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,441</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Net loss per share, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.03</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.38</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.03</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.02</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12pt; padding-left: 12pt">Year ended March 31, 2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Total revenues</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">191</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">307</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">368</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Gross loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(163</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(111</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(62</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(153</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,541</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,554</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,549</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,681</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Net&nbsp;&nbsp;loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,546</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,551</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,567</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,717</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Net loss per share, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.05</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Earnings per basic
and diluted shares are computed independently for each of the quarters presented based on basic and diluted shares outstanding
per quarter and, therefore, may not sum to the totals for the year.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 15.&nbsp;Subsequent
Events</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Designation
of Class A Preferred Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On May 2, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation which designated 800,000 shares of
the Company&rsquo;s previously authorized preferred stock, par value $0.001, as Class A Preferred Stock (&ldquo;Preferred Stock&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The rights, preferences,
and privileges of the Preferred Stock are summarized as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 24.5pt">&nbsp;</td>
    <TD STYLE="width: 0.25in; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Dividends shall accrue on shares of Preferred Stock at the rate of $0.96 per annum. Such dividends shall accrue day-to-day, shall be cumulative, and shall be payable on when, as, and if declared by the Board of Directors of the Company.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Registrant, holders of Preferred Stock then outstanding shall be entitled to receive a preference payment equal to $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 24.5pt">&nbsp;</td>
    <TD STYLE="width: 0.25in; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Shares of Preferred Stock shall vote together with the common stock on an as-converted basis.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 24.5pt">&nbsp;</td>
    <TD STYLE="width: 0.25in; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">At any time after September 1, 2014, shares of Preferred Stock shall be convertible into thirty shares of Common Stock. In addition, accrued but unpaid dividends on the Preferred Stock will also be convertible into common stock after September 1, 2014 at the rate of one share for each $0.40 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination, certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving the Company.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 24.5pt">&nbsp;</td>
    <TD STYLE="width: 0.25in; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Shares of the Preferred Stock shall be subject to redemption by the Company at any time on or after January 15, 2017, upon payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus all accrued but unpaid dividends thereon.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 24.5pt">&nbsp;</td>
    <TD STYLE="width: 0.25in; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">The Preferred Stock is subject to a liquidation preference over common stock equal to $12 per share and the unpaid accrued dividend. Holders of the Preferred Stock will vote with holders of the Company&rsquo;s common stock, but will have thirty votes per share of Preferred Stock held compared to one vote for each share of common stock.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Issuance
of Class A Preferred Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In May 2014, the Company
entered into definitive agreements for a private placement of its securities to certain institutional and accredited investors
(the &ldquo;Investors&rdquo;) pursuant to certain Subscription Agreements and Elections to Convert between the Company and the
Investors. Through June 13, 2014, aggregate gross cash proceeds of $839,600 (approximately $628,700 after estimated cash offering
expenses) were collected in exchange for the issuance of 69,964&nbsp;shares of our Class A Preferred Stock, and warrants, exercisable
for five years, to purchase up to a total of 559,712&nbsp;shares of our common stock at an exercise price of $0.50 per share. The
Company intends to use the net proceeds for working capital purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the Subscription
Agreements, the Company issued shares of a newly established Class A Preferred Stock and warrants to purchase common stock of Cryoport.
The shares and warrants were issued as a unit (a &ldquo;Unit&rdquo;) consisting of (i) one share of Class A Convertible Preferred
Stock and (ii)&nbsp;one warrant to purchase eight (8) shares of Common Stock at an exercise price of $0.50 per share, which are
immediately exercisable and may be exercised at any time on or before March 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the terms
of the 5% Bridge Notes issued by the Company between December 6, 2013 and March 13, 2014 with a total original principal amount
of $1,793,000 (the &ldquo;5% Bridge Notes&rdquo;), the issuance of the Units to Investors at $12.00 per Unit entitled the holders
of the 5% Bridge Notes to convert up to the entire principal amount and accrued interest under the 5% Bridge Notes into Units at
a rate of $10.80 per Unit. Through June 13, 2014, 5% Bridge Note holders totaling $1,743,000<I> </I>in original principal sum elected
to convert their 5% Bridge Notes, including accrued interest, for Units in exchange for the issuance of 163,608 shares of our Class
A Preferred Stock and warrants to purchase up to 1,308,864 shares of our commons stock at an exercise price of $0.50 per share.
Two of the 5% Bridge Note holders that executed Subscription Agreements to convert 5% Bridge Notes in the aggregate principal amount
of $220,000, are affiliates of the Company &ndash; Jerrell W. Shelton, the Company&rsquo;s Chief Executive Officer, and GBR Investments,
LLC, which is managed by Richard Rathmann, a Director and Chairman of the Board of Directors of the Company (collectively, the
&ldquo;Affiliates&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Emergent Financial
Group, Inc. served as the Company&rsquo;s placement agent in this transaction and received, with respect to the gross proceeds
received from Investors who converted their 5% Bridge Notes into Units (not including those conversions by the Affiliates), a commission
of 3% and a non-accountable finance fee of 1% of such proceeds, and with respect to gross proceeds received from all other Investors,
a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds received from such Investors, plus
reimbursement of legal expenses of up to $40,000. Emergent Financial Group, Inc. will also be issued a warrant to purchase three
shares of Common Stock at an exercise price of $0.50 per share for each Unit issued in this transaction. The Company and Emergent
Financial Group, Inc. have agreed that the offering of Units to new Investors will conclude on July 14, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of March 31, 2014,
233,572&nbsp;shares of Preferred Stock and 1,868,576 of the related warrants were outstanding for Investors and 638,646 warrants
were outstanding for Emergent in connection with the Preferred Stock offering and the 5% Bridge Notes conversion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="fin_007"></A>Cryoport, Inc. and
Subsidiary<BR>
Condensed Consolidated Balance Sheets</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">December 31,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">March 31,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: center; text-indent: -0.1in; padding-left: 0.1in">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Current Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: -0.1in; padding-left: 0.35in">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">773,922</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">369,581</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Accounts receivable, net of allowance for doubtful accounts of $10,000 and $24,600, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">407,459</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">515,825</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,958</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,703</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Other current assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">122,413</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">196,505</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,370,752</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,111,614</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Property and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">349,515</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">408,892</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,315</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,086</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Deposits and other assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,358</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,866,582</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,709,950</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 0.75pt">&nbsp;</TD>
    <TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt">&nbsp;</TD>
    <TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: center; text-indent: -0.1in; padding-left: 0.1in">LIABILITIES AND STOCKHOLDERS&rsquo; DEFICIT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Current Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Accounts payable and other accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">713,465</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">579,678</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Accrued compensation and related expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">617,636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,288</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Notes payable and accrued interest, net of discount of $274,500 at December 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">343,432</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Convertible debentures payable and accrued interest, net of discount of $184,750 at March 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,622,359</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Related party notes payable and accrued interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,309,682</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,358,120</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.6in">Total current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,984,215</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,014,445</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Commitments and contingencies</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Stockholders&rsquo; (Deficit) Equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Preferred stock, $0.001&nbsp;par value; 2,500,000&nbsp;shares authorized:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0; padding-left: 0.375in">Class A convertible preferred stock &mdash; $0.001&nbsp;par value; 800,000&nbsp;shares authorized; 442,888 and 0 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively (aggregate liquidation preference of $5,509,557 at December 31, 2014)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">443</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Common stock, $0.001&nbsp;par&nbsp;&nbsp;value; 250,000,000&nbsp;shares authorized; 60,057,846 and 59,979,954 issued and outstanding at December 31, 2014 and March 31, 2014, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,058</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">59,980</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">92,750,244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,512,399</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(93,928,378</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(85,876,874</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.6in">Total stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,117,633</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,304,495</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 52.2pt">Total liabilities and stockholders&rsquo; deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,866,582</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,709,950</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">See accompanying notes
to condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="fin_008"></A>Cryoport, Inc. and
Subsidiary</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">Condensed Consolidated
Statements of Operations</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">(unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Three Months Ended</b></font><br> <font style="font-size: 10pt"><b>December 31,</b></font></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Nine Months Ended</b></font><br> <font style="font-size: 10pt"><b>December 31,</b></font></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2014</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2013</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2014</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2013</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 40%; text-align: justify; text-indent: 0in">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">975,188</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">757,327</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">2,736,776</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,825,117</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Cost of revenues</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">740,651</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">590,266</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,937,926</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,531,312</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Gross margin</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">234,537</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">167,061</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">798,850</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">293,805</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Operating costs and expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.25in">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,492,732</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,305,562</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,431,290</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,768,049</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in; padding-left: 0.25in">Research and development</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">99,052</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">118,490</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">267,575</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">329,569</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in; padding-left: 0.25in">Total operating costs and expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,591,784</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,424,052</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,698,865</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,097,618</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0in">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,357,247</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,256,991</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,900,015</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,803,813</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Other (expense) income:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 9pt">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(552,750</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,713,767</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(48,605</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(31,786</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,185,337</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(626,781</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 9pt">Other expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,906</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,829</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in; padding-left: 9pt">Change in fair value of derivatives</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,196</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">20,845</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Loss before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,407,758</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,840,331</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,088,181</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,123,516</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 24.5pt">Provision for income taxes</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,600</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,407,758</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,840,331</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,089,781</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,123,516</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Preferred stock beneficial conversion charge</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(492,910</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,961,723</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Undeclared cumulative preferred dividends</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(95,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(194,901</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Net loss attributable to common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,995,972</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,840,331</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(8,246,405</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(18,123,516</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Net loss per share attributable to common stockholders &ndash; basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.40</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Weighted average shares outstanding &ndash; basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,057,846</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">58,995,821</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,032,189</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">45,342,320</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">See accompanying notes
to condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><A NAME="fin_009"></A><B>Cryoport, Inc. and
Subsidiary </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>Condensed Consolidated
Statements of Cash Flows </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>(unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Nine Months Ended <BR> December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Operating Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; text-indent: -0.1in; padding-left: 0.35in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(5,089,781</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(18,123,516</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Adjustments to reconcile net loss to net cash used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,226</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">258,189</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Amortization of debt discount and deferred financing costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,148,153</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">540,648</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Stock-based compensation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">565,220</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">509,966</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Change in fair value of derivative instruments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,845</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Loss on disposal of cryogenic shippers</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,773</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,884</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Debt conversion expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,713,767</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Provision for bad debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">465</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Changes in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.85in">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">107,901</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(418,590</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.85in">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,255</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,204</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.85in">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,022</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,898</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.85in">Accounts payable and other accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">154,249</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129,415</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.85in">Accrued compensation and related expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,348</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">174,006</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.85in">Accrued interest</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">36,430</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">85,364</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 1.1in">Net cash used in operating activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,835,293</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,159,406</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Investing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.6in">Purchases of property and equipment</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(67,851</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(139,541</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 1.1in">Net cash used in investing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(67,851</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(139,541</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Cash Flows From Financing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Proceeds from the issuance of preferred stock, net of offering costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,802,854</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Proceeds from exercise of stock options and warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,631</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,001</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Proceeds from issuance of notes payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">615,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Proceeds from issuance of convertible debentures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,206,301</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Repayment of convertible debentures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(50,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in">Repayment of offering and deferred costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(358,489</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.6in">Repayment of related party notes payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(72,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(72,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 1.1in">Net cash provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,307,485</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,955,813</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt">&nbsp;</TD>
    <TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt">Net change in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">404,341</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(343,134</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.6in">Cash and cash equivalents&nbsp;&mdash; beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">369,581</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">563,104</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Cash and cash equivalents&nbsp;&mdash; end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">773,922</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">219,970</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="font-size: 0.75pt">&nbsp;</TD>
    <TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt">&nbsp;</TD>
    <TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 0.75pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">Supplemental Disclosure of Non-Cash Investing and Financing Activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.6in; padding-bottom: 2.5pt">Offering costs in connection with convertible preferred stock included in accounts payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">9,658</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&mdash;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Estimated relative fair value of warrants issued in connection with convertible debentures payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">255,452</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Estimated relative fair value of warrants issued in connection with notes payable</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">312,680</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Accretion of convertible preferred stock beneficial conversion feature and relative fair value of warrants issued in connection with the convertible preferred stock units to accumulated deficit</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,961,723</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Conversion of Bridge Notes payable and accrued interest into shares of common stock and warrants</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,127,202</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.6in">Conversion of convertible debentures payable and accrued interest into convertible preferred stock units</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,766,997</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">See accompanying notes
to condensed consolidated financial statements. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><A NAME="fin_010"></A>Cryoport, Inc. and
Subsidiary</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">Notes to Condensed
Consolidated Financial Statements</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">For the Nine Months
Ended December 31, 2014 and 2013</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">(Unaudited)</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 1. Management&rsquo;s
Representation and Basis of Presentation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The accompanying unaudited
condensed consolidated financial statements have been prepared by Cryoport, Inc. (the &ldquo;Company&rdquo;, &ldquo;our&rdquo;
or &ldquo;we&rdquo;) in accordance with accounting principles generally accepted in the United States of America (&ldquo;U.S. GAAP&rdquo;)
for interim financial information, and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by
the Securities and Exchange Commission (&ldquo;SEC&rdquo;). Accordingly, they do not include all of the information and footnotes
required by U.S. GAAP for complete financial statement presentation. However, the Company believes that the disclosures are adequate
to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal
recurring accruals) considered necessary for a fair presentation have been included.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Operating results
for the nine months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending
March&nbsp;31, 2015. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and related notes thereto included in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended
March&nbsp;31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has evaluated
subsequent events through the date of this filing, and determined that no subsequent events have occurred that would require recognition
in the unaudited condensed consolidated financial statements or disclosure in the notes thereto other than as disclosed in the
accompanying notes.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 2.&nbsp;Nature
of the Business</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Cryoport, Inc. is
a Nevada corporation originally incorporated under the name G.T.5-Limited (&ldquo;GT5&rdquo;) on May 25, 1990. In connection with
a Share Exchange Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired all of the issued and outstanding
shares of common stock of Cryoport Systems, Inc., a California corporation. Cryoport Systems, Inc., which was originally formed
in 1999 as a California limited liability company, and subsequently reorganized into a California corporation on December 11, 2000,
remains an operating company under Cryoport, Inc. We became &ldquo;publicly held&rdquo; by the reverse merger with GT5 described
above. Over time the Company transitioned from being a development company to a fully operational public company in early 2011,
providing global cryogenic logistics solutions to the biotechnology and life sciences industries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Since 2011, we have
validated, perfected and expanded the features of the Cryoport Express<SUP>&reg;</SUP> logistics solutions and have now managed
shipments of the Cryoport Express<SUP>&reg; </SUP>Shippers through its Cryoportal<SUP>TM</SUP> into and out of more than 80 countries
with more than 20,000 shipments, handling a vast array of different biological products and specimens.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We provide cryogenic
logistics solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology
and specialized cold chain logistics knowhow. We view our solutions as disruptive to the &ldquo;older technologies&rdquo; of dry
ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client&rsquo;s requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Our Cryoport Express<SUP>&reg;</SUP>
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal&trade;. The Cryoportal&trade;
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal&trade; records
and retains a fully documented &ldquo;chain-of-custody&rdquo; and, at the client&rsquo;s option, &ldquo;chain-of-condition&rdquo;
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The branded packaging
for our Cryoport Express<SUP>&reg;</SUP> Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express<SUP>&reg;</SUP>
Shippers. The Cryoport Express<SUP>&reg;</SUP> Shippers<SUP> </SUP>are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of &ldquo;dry vapor&rdquo; liquid nitrogen
(&ldquo;LN2&rdquo;) technology. Cryoport Express<SUP>&reg;</SUP> Shippers are International Air Transport Association (&ldquo;IATA&rdquo;)
certified and validated to maintain stable temperatures of minus 150&deg; C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express<SUP>&reg;</SUP> Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express<SUP>&reg;</SUP> CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Our most used solution
is the &ldquo;turnkey&rdquo; solution, which can be accessed directly through our cloud-based Cryoportal&trade; or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express<SUP>&reg;</SUP>
Shipper package to the client who conveniently loads its frozen commodity into the inner chamber of the Cryoport Express<SUP>&reg;</SUP>
Shipper.&nbsp; The customer then closes the shipper package and reseals the shipping box displaying the next recipient&rsquo;s
address (&ldquo;Flap A&rdquo;) for pre-arranged carrier pick up.&nbsp; Cryoport arranges for the pick-up of the parcel by a shipping
service provider, which is designated by the client or chosen by Cryoport, for delivery to the client&rsquo;s intended recipient.&nbsp;
The recipient simply opens the shipper package and removes the frozen commodity that has been shipped.&nbsp; The recipient then
reseals the package, displaying the nearest Cryoport Operations Center address (&ldquo;Flap B&rdquo;), making it ready for pre-arranged
carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express<SUP>&reg;</SUP> Shipper, it is cleaned, put
through quality assurance testing, and returned to inventory for reuse.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard &ldquo;Turn-key Solution,&rdquo; described above, we also provide the following
customer facing, value-added solutions to address our various clients&rsquo; needs:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">&ldquo;<b><i>Customer Staged Solution</i></b>,&rdquo; designed for clients making 50 or more shipments per month. Under this solution, we supply an inventory of our Cryoport Express<sup>&reg; </sup>Shipper packages to our customer, in an uncharged state, enabling our customer (after training/certification) to charge them with liquid nitrogen and use our Cryoportal&trade; to enter orders with shipping and delivery service providers for the transportation of the package. Once the order is released, our customer services professionals monitor the shipment and the return of the shipper for cleaning, quality assurance testing and reuse.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">&ldquo;<b><i>Customer Managed Solution</i></b>,&rdquo; a limited customer implemented solution whereby we supply our Cryoport Express<sup>&reg;</sup> Shippers packages to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of the shipping and delivery service provider and the return of the shipper to us. Under this solution, the customer accepts a significant level of risk for a successful shipment.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">&ldquo;<b><i>powered by Cryoport</i></b><sup>SM</sup>,&rdquo; available to providers of shipping and delivery services who seek to offer a &ldquo;branded&rdquo; cryogenic logistics solution as part of their service offerings, with &ldquo;<i>powered by Cryoport<sup>SM</sup></i>&rdquo; appearing prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements, such as minimum required shipping volumes.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in; width: 97%"><font style="font-size: 10pt">&ldquo;<b><i>Integrated Solution,</i></b>&rdquo;<i> </i>which is our outsource solution. It is our most comprehensive and complex solution. It involves our management of the entire cryogenic logistics process for our client, including Cryoport employees at the client&rsquo;s site to manage the client&rsquo;s cryogenic logistics function in total.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">&ldquo;<b><i>Regenerative Medicine Point-of-Care Repository Solution,</i></b>&rdquo; designed for allogeneic therapies. In this model we supply our Cryoport Express<sup>&reg;</sup> Shipper package to ship and store cryogenically preserved life science products for up to 6 days (or longer periods with supplementary shippers) at a point-of-care site, with the Cryoport Express<sup>&reg;</sup> Shipper serving as a temporary freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport Operations Center receives the Cryoport Express<sup>&reg; </sup>Shipper package it is cleaned, put through quality assurance testing, and returned to inventory for reuse.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

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<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="width: 97%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">&ldquo;<b><i>Personalized Medicine and Cell-based Immunotherapy Solution,</i></b>&rdquo; designed for autologous therapies.&nbsp;&nbsp;&nbsp;In this model, our Cryoport Express<sup>&reg;</sup> Shipper package serves as an enabling technology for the safe transportation of manufactured autologous cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the collection of the patient&rsquo;s cells in a hospital setting, to (b) a central processing facility where they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care treatment facility.&nbsp; If required, the Cryoport Express<sup>&reg;</sup> Shipper can then serve as a temporary freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where the medical provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service professionals monitor each shipment throughout the predetermined process, including the return of the shipper to us. When the Cryoport Operations Center receives the Cryoport Express<sup>&reg; </sup>Shipper package it is cleaned, put through quality assurance testing, and returned to inventory for reuse.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>&nbsp;</I></B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Agreements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>Zoetis.</B> In
December&nbsp;2012, we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of
Pfizer Inc.) pursuant to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport
provides on-site logistics personnel and its logistics management operating platform, the Cryoportal<SUP>TM</SUP>, to manage shipments
from the Zoetis manufacturing site in the United States to domestic customers as well as various international distribution centers.
As part of our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce
economies and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time
and with the optimum utilization of resources. The Company manages Zoetis&rsquo; total fleet of dewar flask shippers used for this
purpose, including liquid nitrogen shippers. In July 2013, the agreement was amended to expand Cryoport&rsquo;s scope to manage
all logistics of Zoetis&rsquo; key frozen poultry vaccine to all Zoetis&rsquo; international distribution centers as well as all
domestic shipments. In October 2013, the agreement was further amended to further expand Cryoport&rsquo;s role to include the logistics
management for a second poultry vaccine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>FedEx.</B> In January
2013, we entered into a master agreement with Federal Express Corporation (&ldquo;FedEx&rdquo;) (the &ldquo;FedEx Agreement&rdquo;)
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal<SUP>TM</SUP>
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days&rsquo; notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport&rsquo;s services for frozen temperature-controlled cold chain transportation
as its FedEx<SUP>&reg;</SUP> Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx&rsquo;s
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal<SUP>TM</SUP> software
platform, which is &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>Liventa Biosciences.</B>
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. (&ldquo;Liventa&rdquo;), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express<SUP>&reg;</SUP> Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport&rsquo;s proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa&rsquo;s distribution capability to orthopedic care providers.
The implementation of Cryoport&rsquo;s Regenerative Medicine<B><I> </I></B>Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express<SUP>&reg;</SUP>
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>DHL.</B> In June
2014, we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding (&ldquo;DHL&rdquo;). This relationship
with DHL is a further implementation of the Company&rsquo;s expansion of distribution partnerships under the &ldquo;<I>powered
by Cryoport<SUP>SM</SUP></I>&rdquo; model described above, allowing us to expand our sales and marketing reach through our partners
and build awareness of the benefits of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold
chain logistics offerings to its life sciences and healthcare customers with Cryoport&rsquo;s validated cryogenic solutions. DHL
added 15 additional certified Life Sciences stations in the second quarter of 2014 bringing the Thermonet network to 60 stations
in operation. Over the course of rolling out our new relationship, this expanded network will offer Cryoport&rsquo;s cryogenic
solutions under the DHL brands as &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo;. In addition, DHL&rsquo;s customers will
be able to have direct access to our cloud-based order entry and tracking portal to order Cryoport Express<SUP>&reg;</SUP> Solutions
and receive preferred DHL shipping rates and discounts. Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>,
is integrated with DHL&rsquo;s tracking and billing systems to provide DHL life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>UPS.</B> In October
2014, we added United Parcel Services, Inc. (&ldquo;UPS&rdquo;) as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company&rsquo;s
expansion of distributors under the &ldquo;<I>powered by Cryoport<SUP>SM</SUP></I>&rdquo; model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Over the course of
rolling out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal
to order Cryoport Express<SUP>&reg;</SUP> Solutions and gain access to UPS&rsquo;s broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal<SUP>TM</SUP>,
is integrated with UPS&rsquo;s tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Cryoport now serves
and supports the three largest integrators in the world, responsible for over 85% of worldwide air freight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In summary, we serve
the life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Companies or institutions
such as therapy developers for personalized medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic
laboratories, contract manufacturers, cord blood repositories, vaccine manufacturers, animal husbandry related companies, in-vitro
fertilization clinics, and other organizations handling commodities requiring reliable cryogenic logistics solutions are amongst
our clients. These companies usually operate within heavily regulated environments and as such, changing vendors and distribution
practices typically require a number of steps, which may include the audit of our facilities, review of our procedures, qualifying
us as a vendor, and performing test shipments. This process can take three to nine months or longer to complete prior to a potential
customer adopting one or more of our Cryoport Express<SUP>&reg;</SUP> Solutions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Going Concern</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The unaudited condensed
consolidated financial statements have been prepared using the accrual method of accounting in accordance with U.S. GAAP and have
been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal
course of business. We have sustained operating losses since our inception and have used substantial amounts of working capital
in our operations. At December 31, 2014, we had an accumulated deficit of $93.9 million. During the nine months ended December
31, 2014, we used cash in operations of $2.8 million and had a net loss of $5.1 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express<SUP>&reg;</SUP>
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at December 31, 2014, additional funds raised subsequent to December 31, 2014 through the secured
promissory notes (see Note 10), together with the revenues generated from our services will be sufficient to sustain our planned
operations into the fourth quarter of fiscal year 2015; however, we must obtain additional capital to fund operations thereafter
and for the achievement of sustained profitable operations. These factors raise substantial doubt about our ability to continue
as a going concern. We are currently working on funding alternatives in order to secure sufficient operating capital to allow us
to continue to operate as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express<SUP>&reg;</SUP> Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis and on acceptable terms or at all. Management&rsquo;s inability to successfully achieve significant
revenue increases or implement cost reduction strategies or to complete any other financing will adversely impact our ability to
continue as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts
to become a self-sustaining financially viable entity.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 3. Summary
of Significant Accounting Policies</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Basis of
Presentation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The accompanying condensed
consolidated financial statements have been prepared in accordance with U.S. GAAP.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Principles
of Consolidation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The condensed consolidated
financial statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany
accounts and transactions have been eliminated.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Use of Estimates</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The preparation of
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts.
The Company&rsquo;s significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance
for inventory obsolescence, deferred taxes and their accompanying valuations and valuation of equity instruments.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Fair Value
of Financial Instruments</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s
financial instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible debentures
payable, notes payable, accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value
at December 31, 2014 and March 31, 2014 due to their short-term nature. The difference between the fair value and recorded values
of the related party notes payable is not significant.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Cash and
Cash Equivalents</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Customers</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company grants
credit to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues
from international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company&rsquo;s ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at December 31, 2014 and March 31, 2014 are net of reserves for doubtful accounts of $10,000
and $24,600, respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated
amounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The majority of the
Company&rsquo;s customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration
of accounts receivable within these industries, which is subject to normal credit risk. At December 31, 2014 and March 31, 2014,
there was one customer that accounted for 19.3% and 30.6%, respectively, of net accounts receivable. No other single customer owed
us more than 10% of net accounts receivable at December 31, 2014 and March 31, 2014. The Company maintains reserves for bad debt
and such losses, in the aggregate, historically have not exceeded our estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">For the nine months
ended December 31, 2014 and 2013, there was one customer that accounted for 25.0% and 31.0% of revenues, respectively. No other
single customer generated over 10% of revenues during the nine months ended December 31, 2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During nine months ended December 31, 2014 and
2013, the Company had revenues from foreign customers of approximately $421,800 and $312,000, respectively, which constituted approximately
15.4% and 17.1% of total revenues, respectively.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Inventories</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s
inventories consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned
to the Company with the containers at the culmination of the customer&rsquo;s shipping cycle. Inventories are stated at the lower
of cost or current estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire
method. Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of
its inventories to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs
of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and
finished goods include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level
of inventories considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories
at its net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic
conditions, customer demand, competition or other relevant factors differ from expectations. These estimates require us to make
assessments about future demand for the Company&rsquo;s products in order to categorize the status of such inventory items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company&rsquo;s forecasts of market conditions,
industry trends, competition and other factors.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Property
and Equipment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company provides
shipping containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements
are similar to the accounting standard for leases since they convey the right to use the container over a period of time. The Company
retains the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer&rsquo;s shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Property and equipment
are recorded at cost. Cryogenic shippers are depreciated using the straight-line method over their estimated useful lives of three
years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally three
to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset
or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful life of
the assets or term of the lease, whichever is shorter and included in depreciation expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Intangible
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Intangible assets
are comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and
trademarks, which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes
certain costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Long-lived
Assets</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets&rsquo; carrying value, and accordingly, we have not recognized any impairment losses through December 31, 2014.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Deferred
Financing Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Deferred financing
costs represent costs incurred in connection with the issuance of the convertible debentures payable and private equity financing.
Deferred financing costs related to the issuance of debt are amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Convertible
Debentures</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature (&ldquo;BCF&rdquo;). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Income Taxes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company accounts
for income taxes under the provision of the Financial Accounting Standards Board (&ldquo;FASB&rdquo;) Accounting Standards Codification
(&ldquo;ASC&rdquo;) 740, <I>Income Taxes</I>, or ASC 740. As of December 31, 2014 and March 31, 2014, there were no unrecognized
tax benefits included in the accompanying condensed consolidated balance sheets that would, if recognized, affect the effective
tax rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight
of available evidence, the Company&rsquo;s management has determined that it is more likely than not that the net deferred tax
assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets.
The Company&rsquo;s income tax provision consists of state minimum taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s
policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual
for interest or penalties on its condensed consolidated balance sheets at December 31, 2014 and March&nbsp;31, 2014, respectively
and has not recognized interest and/or penalties in the condensed consolidated statement of operations for the nine months ended
December 31, 2014 and 2013. The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31,
2014, the Company is no longer subject to U.S. federal examinations for years before 2010 and for California franchise and income
tax examinations for years before 2009. However, to the extent allowed by law, the taxing authorities may have the right to examine
prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating
loss carry forward amount. The Company is not currently under examination by U.S. federal or state jurisdictions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Revenue
Recognition</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company provides
shipping containers to its customers and charges a fee in exchange for the use of the container. The Company&rsquo;s arrangements
are similar to the accounting standard for leases since they convey the right to use the containers over a period of time. The
Company retains title to the containers and provides its customers the use of the container for a specified shipping cycle. At
the culmination of the customer&rsquo;s shipping cycle, the container is returned to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the materials shipped, and at
the time that collectability is reasonably certain. Revenue is based on gross revenues, net of discounts and allowances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel and other services. Revenue is
recognized for these services as services are rendered and at the time that collectability is reasonably certain.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Accounting
for Shipping and Handling Revenue, Fees and Costs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying condensed consolidated statements of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Research
and Development Expenses</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Expenditures relating
to research and development are expensed in the period incurred.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Stock-Based
Compensation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company accounts
for stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all
stock-based payments to employees and directors, including grants of employee stock options and warrants, to be recognized based
upon their fair values. The fair value of stock-based awards is estimated at grant date using the Black-Scholes Option Pricing
Model (&ldquo;Black-Scholes&rdquo;) and the portion that is ultimately expected to vest is recognized as compensation cost over
the requisite service period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Since stock-based
compensation is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture
rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future
periods if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in
which the change in estimate occurs. The estimated forfeiture rates at December 31, 2014 and March 31, 2014 were zero as the Company
has not had a significant history of forfeitures and does not expect significant forfeitures in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Cash flows from the
tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company&rsquo;s loss position, there were no such tax benefits during the nine months ended
December 31, 2014 and 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company&rsquo;s
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company&rsquo;s
stock-based compensation plans are discussed further in Note 9.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Issuances of the Company&rsquo;s
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i)&nbsp;the date at which a commitment for performance to earn
the equity instruments is reached (a &ldquo;performance commitment&rdquo; which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii)&nbsp;the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Basic and
Diluted Net Income (Loss) Per Share</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We calculate basic
and diluted net income (loss) per share attributable to common stockholders using the weighted average number of common shares
outstanding during the periods presented, and adjust the amount of net income (loss) used in this calculation for cumulative preferred
stock dividends, (if any), whether they are earned or not during the period. In periods of a net loss position, basic and diluted
weighted average shares are the same. For the diluted earnings per share calculation, we adjust the weighted average number of
common shares outstanding to include dilutive stock options, warrants and shares associated with the conversion of convertible
debt and convertible preferred stock outstanding during the periods. For the three and nine months ended December 31, 2014, the
Company had cumulative, undeclared dividends that have not been accrued related to its preferred stock of $95,304 and $194,901,
respectively, which were added to the net loss on the condensed consolidated statement of operations in order to calculate net
loss per common share attributable to common stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following shows
the amounts used in computing net loss per share for the nine months ended December 31, 2014 and 2013:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>2014</b></P> <!-- Field: Rule-Page --><DIV STYLE="text-align: center; margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%; text-align: center">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>2013</b></P> <!-- Field: Rule-Page --><DIV STYLE="text-align: center; margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%; text-align: center">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: justify; text-indent: 0in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(5,089,781</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(18,123,516</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Less:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.25in">Preferred stock beneficial conversion charge</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,961,723</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Undeclared cumulative preferred dividends</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(194,901</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Net loss attributable to common stockholders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,246,405</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(18,123,516</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Weighted average shares issued and outstanding</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,032,189</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">45,342,320</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Basic and diluted net loss per share attributable to
    common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.14</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.40</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following shows
the amounts used in computing net loss per share for the three months ended December 31, 2014 and 2013:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three Months Ended December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2014</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><b>2013</b></P> <!-- Field: Rule-Page --><div align="left" style="margin-top: 1pt; margin-bottom: 1pt"><div style="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: justify; text-indent: 0in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(1,407,758</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(1,840,331</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Less:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.25in">Preferred stock beneficial conversion charge</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(492,910</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in; padding-left: 0.25in">Undeclared cumulative preferred dividends</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(95,304</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Net loss attributable to common stockholders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,995,972</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,840,331</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Weighted average shares issued and outstanding</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">60,057,846</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">58,995,821</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Basic and diluted net loss per share attributable to
    common stockholders</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.03</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following table
sets forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been
anti-dilutive:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine Months Ended December 31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>2014</b></P> <!-- Field: Rule-Page --><DIV STYLE="text-align: center; margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%; text-align: center">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>2013</b></P> <!-- Field: Rule-Page --><DIV STYLE="text-align: center; margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%; text-align: center">&nbsp;</div></div><!-- Field: /Rule-Page --></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 70%; text-align: left; text-indent: 0in">Class A convertible preferred stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">13,286,640</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in">Stock options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,680,124</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,908,272</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in">Warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,750,277</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">24,144,727</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in; padding-left: 0.1in">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">22,717,041</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">34,052,999</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Segment Reporting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We currently operate
in one reportable segment.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Fair Value
Measurements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;1:</I>&nbsp;Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level&nbsp;1 inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;2:</I>&nbsp;Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><I>Level&nbsp;3:</I>&nbsp;Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level&nbsp;3
inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT>In
determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We did not elect the
fair value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value.
Therefore, material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and
payable, are reported at their historical carrying values. We have no assets or liabilities that are required to be measured at
fair value on a recurring basis as of December 31, 2014 and March 31, 2014.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Foreign Currency
Translation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We record foreign
currency transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included
in results of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Recent Accounting
Pronouncements</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In August 2014, the
FASB issued ASU 2014-15, &ldquo;Presentation of Financial Statements-Going Concern&rdquo;. Currently, there is no guidance in U.S.
GAAP about management&rsquo;s responsibility to evaluate whether there is substantial doubt about an entity&rsquo;s ability to
continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity&rsquo;s
ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing
standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every
reporting period including interim periods, (3) provide principles for considering the mitigating effect of management&rsquo;s
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management&rsquo;s
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. Management
is currently assessing the impact the adoption of ASU 2014-15 will have on our condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In May 2014, the FASB
issued ASU No. 2014-09, &ldquo;Revenue from Contracts with Customers&rdquo;. ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, &quot;Revenue Recognition&quot;. The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 4. Related
Party Transactions</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">5% Bridge
Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes (the &ldquo;5% Bridge
Notes&rdquo;) in the original principal amount of $1,793,000. This includes two notes in the aggregate amount of $120,000 issued
to Jerrell Shelton, the Company&rsquo;s Chief Executive Officer, on December 11, 2013 and January 10, 2014 as well as a note in
the amount of $100,000 issued to GBR Investments, LLC on February 3, 2014, of which Richard Rathmann, a Director of the Company,
is the manager (see Note 6).</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Related Party
Notes Payable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of December 31,
2014 and March 31, 2014, the Company had aggregate principal balances of $483,500 and $555,500, respectively, in outstanding unsecured
indebtedness owed to four related parties, including former members of the Company&rsquo;s board of directors, representing working
capital advances made to the Company from February 2001 through March 2005. These notes bear interest at the rate of 6% per annum
and provide for aggregate monthly principal payments which began April 1, 2006 of $2,500, and which increased by an aggregate of
$2,500 every nine months to a maximum $10,000 per month. As of December 31, 2014, the aggregate principal payments totaled $8,000
per month. Any remaining principal and accrued interest is due at maturity on various dates through March 1, 2015. Accrued interest,
which is included in related party notes payable in the accompanying condensed consolidated balance sheets, amounted to $826,200
and $802,600 as of December 31, 2014 and March 31, 2014, respectively.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Class A Convertible
Preferred Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In November 2014,
both Mr.&nbsp;Shelton and GBR Investments, LLC participated in the Class A convertible preferred stock offering described in Note
8 and the Company issued 4,167 shares of Class A convertible preferred stock each in exchange for an aggregate amount of $100,000.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 5. Notes
Payable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt">In December 2014,
the Company issued to certain accredited investors 2014 Series Secured Promissory Notes (the &ldquo;7% Bridge Notes&rdquo;) in
the aggregate original principal amount of $615,000. The 7% Bridge Notes accrue interest at a rate of 7% per annum. All principal
and interest under the 7% Bridge Notes will be due on July 1, 2015, however, the Company may elect to extend the maturity date
of the notes to January 1, 2016 by providing written notice to the note holders and a warrant to purchase a number of shares of
the Company&rsquo;s common stock equal to (a) the then outstanding principal balance of the note, divided by (b) $0.50 multiplied
by 125%. The Company may prepay the 7% Bridge Notes at any time without penalty and shall prepay the 7% Bridge Notes in an amount
equal to 25% of the net cash proceeds received by the Company during each month from the issuance of either debt or equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt">The 7% Bridge Notes
are secured by all tangible assets of the Company pursuant to the terms of that certain Security Agreement dated December 3, 2014
between the Company and the note holders. The Company is obligated to keep the collateral and all of its other personal property
and assets free and clear of all other security interests, except for certain limited exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In connection with
the issuance of the 7% Bridge Notes, the Company issued the note holders warrants to purchase 1,537,500 shares of common stock
at an exercise price of $0.50 per share. The warrants are exercisable on May 31, 2015 and expire on November 30, 2021. The relative
fair value of the warrants of $312,700 was recorded as a debt discount and is amortized to interest expense using the straight-line
method which approximated the effective interest method over the term of the notes. &nbsp;During the three and nine months ended
December 31, 2014, the Company amortized $38,100 of the debt discount to interest expense for these notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company did not
pay any discounts or commissions with respect to the issuance of the 7% Bridge Notes or the warrants. In January 2015, the Company
issued an additional 7% Bridge Note in the amount of $250,000 and also repaid $113,475 of the original principal balance outstanding
as of December 31, 2014, representing 25% of the proceeds from the Class A convertible preferred stock offering during the month
of December 2014 (see Note 10).</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 6. Convertible
Debentures Payable</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">5% Bridge
Notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes in the original principal
amount of $1,793,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The 5% Bridge Notes
accrued interest at a rate of 5%&nbsp;per annum from the date of issuance through date of payment, on a non-compounding basis.
All principal and interest under the 5% Bridge Notes became due on June 30, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In connection with
the issuance of the 5% Bridge Notes, the Company granted these investors warrants to purchase 896,500 shares of common stock at
an exercise price of $0.49 per share. The warrants were exercisable on May 31, 2014 and expire on December 31, 2018. The relative
fair value of the warrants of $279,100 was recorded as a debt discount and was amortized to interest expense using the straight-line
method which approximated the effective interest method over the term of the 5% Bridge Notes. &nbsp;During the nine months ended
December 31, 2014, the Company amortized $184,700 of the debt discount to interest expense for these notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The agreement allowed
that in the event the Company designated and issued one or more types of equity securities while the 5% Bridge Notes were outstanding
(a &ldquo;Subsequent Offering&rdquo;), the Company must provide written notice to the holders of the notes and such holders had
a right to convert up to all of the principal and accrued unpaid interest on the notes into shares of such equity securities on
the same terms as the Subsequent Offering during the ten days following the provision of such notice. The conversion price for
these equity securities was 90% of the offering price for the equity securities in the Subsequent Offering. At the time of issuance,
the Company was unable to value the conversion feature of these 5% Bridge Notes given the absence of a fixed conversion rate and
the convertibility of the 5% Bridge Notes was contingent upon the completion of a Subsequent Offering. However, on May 6, 2014,
the Company completed the first convertible preferred stock offering which established a firm commitment date. This triggered the
valuation of the beneficial conversion feature of the 5% Bridge Notes which aggregated $826,900 and was recorded as interest expense
during the nine months ended December 31, 2014. Note holders with a principal amount of $1,743,000, together with $24,000 of accrued
interest, converted their 5% Bridge Notes to convertible preferred stock units (see Note 8) and one note holder was paid principal
and interest of $50,753.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Emergent Financial
Group, Inc. (&ldquo;Emergent&rdquo;) served as the Company&rsquo;s placement agent in connection with the original placement of
the 5% Bridge Notes and earned a commission of 9% of the original principal balance of such notes. Debt financing costs of $151,570,
comprised primarily of the commission earned by Emergent, were amortized to interest expense using the straight-line method which
approximated the effective interest method over the term of the notes. During the nine months ended December 31, 2014, the Company
amortized $98,400 of the debt financing costs to interest expense for these notes.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 7.&nbsp;Commitments
and Contingencies</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Facility and Equipment
Leases</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We lease 11,900 square
feet of corporate, research and development, and warehouse facilities in Lake Forest, California under an operating lease expiring
June&nbsp;30, 2015, which we do not intend to renew. We are currently exploring other facilities to meet our growing demands. The
lease agreement contains certain scheduled rent increases, which are accounted for on a straight-line basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B><I>Employment Agreements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We have entered into
employment agreements with certain of our officers under which payment and benefits would become payable in the event of termination
by us for any reason other than cause, or upon a change in control of our Company, or by the employee for good reason.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Consulting
and Engineering Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Effective November&nbsp;1,
2010, the Company entered into a Second Amendment to Master Consulting and Engineering Services Agreement (the &ldquo;Second Amendment&rdquo;)
with KLATU Networks, LLC (&ldquo;KLATU&rdquo;), which amended the Master Consulting and Engineering Services Agreement between
the parties dated as of October&nbsp;9, 2007 (the &ldquo;Agreement&rdquo;), as amended by the First Amendment to Master Consulting
and Engineering Services Agreement between the parties dated as of April&nbsp;23, 2009. The parties entered into the Second Amendment
to clarify their mutual intent and understanding that all license rights granted to the Company under the Agreement, as amended,
shall survive any termination or expiration of the Agreement. In addition, in recognition that the Company has paid KLATU less
than the market rate for comparable services, the Second Amendment provides that if the Company terminates the Agreement without
cause, which the Company has no intention of doing, or liquidates, KLATU shall be entitled to receive additional consideration
for its services provided from the commencement of the Agreement through such date of termination, which additional compensation
shall not be less than $2 million plus two times the &ldquo;cost of work&rdquo; (as defined in the Agreement). Any such additional
compensation would be payable in three equal installments within 12 months following the date the amount of such additional compensation
is determined. If KLATU terminates this agreement, no such payments are payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The agreement provides
for one year terms ending on December&nbsp;31 of each year and automatically renews unless otherwise terminated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Litigation</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company may become
a party to product litigation in the normal course of business. The Company accrues for open claims based on its historical experience
and available insurance coverage. In the opinion of management, there are no legal matters involving the Company that would have
a material adverse effect upon the Company&rsquo;s consolidated financial condition or results of operations.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Indemnities
and Guarantees</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has made
certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation
to certain actions or transactions. The guarantees and indemnities do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for
these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed
consolidated balance sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company indemnifies
its directors, officers, employees and agents, as permitted under the laws of the States of California and Nevada. In connection
with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. The
duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Note 8.&nbsp;Stockholders&rsquo;
Equity</B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Authorized
Stock</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company has 250,000,000
authorized shares of common stock with a par value of $0.001 per share. In September 2011, our stockholders approved an amendment
to the Amended and Restated Articles of Incorporation to authorize a class of undesignated or &quot;blank check&quot; preferred
stock, consisting of 2,500,000 shares at $0.001 par value per share. Shares of preferred stock may be issued in one or more series,
with such rights, preferences, privileges and restrictions to be fixed by the Company's board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Designation
of Class A Convertible Preferred Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On May 2, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation which designated 800,000 shares of
the Company&rsquo;s previously authorized preferred stock, par value $0.001, as Class A Convertible Preferred Stock (&ldquo;Preferred
Stock&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The rights, preferences,
and privileges of the Preferred Stock are summarized as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 24.5pt; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Dividends shall accrue on shares of Preferred Stock at the rate of $0.96 per annum. Such dividends shall accrue day-to-day, shall be cumulative, and shall be payable on when, as, and if declared by the Board of Directors of the Company.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 24.5pt; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Preferred Stock then outstanding shall be entitled to receive a liquidation preference payment equal to $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 24.5pt; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Shares of Preferred Stock shall vote together with the common stock on an as-converted basis. Holders of the Preferred Stock will have thirty votes per share of Preferred Stock held compared to one vote for each share of the Company&rsquo;s common stock.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 24.5pt; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">At any time after September 1, 2014, shares of Preferred Stock shall be convertible into thirty shares of common stock. In addition, accrued but unpaid dividends on the Preferred Stock, whether or not declared, will also be convertible into common stock after September 1, 2014 at the rate of one share for each $0.40 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination, certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving the Company.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 24.5pt; text-align: justify; text-indent: 0in"><font style="font: 10pt Symbol">&middot;</font></td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Shares of the Preferred Stock shall be subject to redemption by the Company at any time on or after January 15, 2017, upon payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus all accrued but unpaid dividends, whether or not declared, thereon.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Issuance
of Class A Convertible Preferred Stock</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In May 2014, the Company
entered into definitive agreements for a private placement of its securities to certain institutional and accredited investors
(the &ldquo;Investors&rdquo;) pursuant to certain subscription agreements and elections to convert between the Company and the
Investors. Through December 31, 2014, aggregate gross cash proceeds of $3.4 million (approximately $2.8 million after offering
costs) were collected in exchange for the issuance of 279,280&nbsp;shares of our Class A Convertible Preferred Stock, and warrants,
exercisable for five years, to purchase up to a total of 2,234,240&nbsp;shares of our common stock at an exercise price of $0.50
per share. The Company intends to use the net proceeds for working capital purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the subscription
agreements, the Company issued shares of a newly established Class A Convertible Preferred Stock and warrants to purchase common
stock of Cryoport. The shares and warrants were issued as a unit (a &ldquo;Unit&rdquo;) consisting of (i) one share of Class A
Convertible Preferred Stock and (ii)&nbsp;one warrant to purchase eight (8) shares of the Company&rsquo;s common stock at an exercise
price of $0.50 per share, which were immediately exercisable and may be exercised at any time on or before March 31, 2019.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the terms
of the 5% Bridge Notes issued by the Company between December 2013 and March 2014 with a total original principal amount of $1,793,000,
the issuance of the Units to Investors at $12.00 per Unit entitled the holders of the 5% Bridge Notes to convert up to the entire
principal and accrued interest amount under the 5% Bridge Notes into Units at a rate of $10.80 per Unit. Through December 31, 2014,
5% Bridge Note holders totaling $1,743,000<I> </I>in original principal sum elected to convert their 5% Bridge Notes, including
accrued interest of $24,000, for Units in exchange for the issuance of 163,608 shares of our Class A Convertible Preferred Stock
and warrants to purchase up to 1,308,864 shares of our common stock at an exercise price of $0.50 per share. Two of the 5% Bridge
Note holders that executed subscription agreements to convert 5% Bridge Notes in the aggregate principal amount of $220,000 are
affiliates of the Company &ndash; Jerrell W. Shelton, the Company&rsquo;s Chief Executive Officer, and GBR Investments, LLC, which
is managed by Richard Rathmann, a Director and Chairman of the Board of Directors of the Company (collectively, the &ldquo;Affiliates&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The fair value of
the beneficial conversion feature of the convertible preferred stock issuance and the relative fair value of the warrants issued,
aggregated $3.0 million through December 31, 2014. This amount was accreted to accumulated deficit and additional paid-in capital
during the nine months ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Emergent served as
the Company&rsquo;s placement agent in this transaction and received, with respect to the gross proceeds received from Investors
who converted their 5% Bridge Notes into Units (not including those conversions by the Affiliates), a commission of 3% and a non-accountable
finance fee of 1% of such proceeds, and with respect to gross proceeds received from all other Investors, a commission of 10% and
a non-accountable finance fee of 3% of the aggregate gross proceeds received from such Investors, plus reimbursement of legal expenses
of up to $40,000. Emergent was issued a warrant to purchase three shares of common stock at an exercise price of $0.50 per share
for each Unit issued in this transaction. The Company and Emergent have agreed that the offering of Units to new Investors will
conclude on February 4, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of December 31,
2014, 442,888&nbsp;shares of Class A Convertible Preferred Stock and 3,543,104 of the related warrants were outstanding for Investors
and 1,241,592 warrants were outstanding for Emergent in connection with the Class A Convertible Preferred Stock offering and the
5% Bridge Note conversions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">No dividends have
been declared as of December 31, 2014; however, the cumulative preferred stock dividend of $194,901 is included in the net loss
attributable to common stockholders (see Note 3) and the liquidation preference.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Common Stock
Reserved for Future Issuance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of December 31,
2014, approximately 101.8&nbsp;million shares of common stock were issuable upon conversion or exercise of rights granted under
prior financing arrangements, preferred stock, stock options and warrants, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 85%; text-align: justify; text-indent: 0in">Class A convertible preferred stock converted to common stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">13,286,640</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: 0in">Exercise of stock options</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,333,132</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: 0in">Exercise of warrants</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">67,183,147</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: 0in">Total shares of common stock reserved for future issuances</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">101,802,919</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In August 2014, we
issued 20,000 shares of restricted common stock to a consultant in exchange for services. The Company recognized $9,000 in expense
related to these shares for the nine months ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 9.&nbsp;Stock-Based
Compensation</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Warrant Activity</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We typically issue
warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services
rendered by placement agents and consultants. Our outstanding warrants expire on varying dates through November 2021. A summary
of warrant activity is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR> Shares</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Exercise<BR> Price/Share</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Remaining<BR> Contractual<BR> Term&nbsp;(Years)</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Aggregate</b></font><br> <font style="font-size: 10pt"><b>Intrinsic</b></font><br> <font style="font-size: 10pt"><b>Value (1)</b></font></P> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in">Outstanding&nbsp;&mdash; March 31, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">61,194,343</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.84</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.25in">Issued</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,322,196</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.25in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(50,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0in; padding-left: 0.25in">Cancelled</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 0in; padding-left: 0.25in">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(283,392</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.85</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Outstanding&nbsp;&mdash; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">67,183,147</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.80</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.5</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,074,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Vested (exercisable)&nbsp;&mdash; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">65,565,647</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.80</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2.4</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,074,500</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">(1) Aggregate intrinsic
value represents the difference between the exercise price of the warrant and the closing market price of our common stock on December
31, 2014, which was $0.44 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The fair value of
each warrant grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions for the
nine months ended December 31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 1in">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 61%; text-align: justify; text-indent: 0in">Expected life (years)</td>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 39%; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">4.3 &ndash; 7.0</font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top; text-align: justify; text-indent: 0in">Risk-free interest rate</td>
    <td nowrap style="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">1.2%&nbsp;-&nbsp;2.0%</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: justify; text-indent: 0in">Volatility</td>
    <td nowrap style="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">116.5% &ndash; 125.3% </font></td></tr>
<TR STYLE="background-color: White">
    <td style="vertical-align: top; text-align: justify; text-indent: 0in">Dividend yield</td>
    <td nowrap style="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">0%</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Stock
Options</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We have three stock
incentive plans: the 2002 Stock Incentive Plan, or the 2002 Plan, the 2009 Stock Incentive Plan, or the 2009 Plan and the 2011
Stock Incentive Plan, or the 2011 Plan (collectively, the &ldquo;Plans&rdquo;). The 2002 Plan authorizes the grant of incentive
awards, including stock options, for the purchase of up to a total of 500,000&nbsp;shares and has no shares available for future
issuances as the 2002 Plan has expired. Subsequent to the adoption of the 2011 Plan, no new options have been granted pursuant
the 2009 Plan or 2002 Plan. In September 2009, the stockholders approved the issuance of up to 1,200,000&nbsp;shares of common
stock available for issuance under the 2009 Plan and as of December 31, 2014, the Company has 303,768 shares available for future
awards under the 2009 Plan. In September 2011, the stockholders authorized the issuance of up to 2,300,000 shares of the Company's
common stock. On September&nbsp;13, 2012, the stockholders approved an increase to the number of shares of the Company&rsquo;s
common stock available for issuance by 3,000,000 shares. On September&nbsp;6, 2013 the stockholders approved an increase to the
number of shares of the Company&rsquo;s common stock available for issuance by 7,100,000 shares. On August 29, 2014 the stockholders
approved an increase to the number of shares of the Company&rsquo;s common stock available for issuance by 1,500,000 shares. As
of December 31, 2014, there were 2,585,985 incentive awards available for grant under the 2011 Plan. In December 2014, 3,150,000
options were granted outside the plan to Jerrell Shelton, the Company&rsquo;s Chief Executive Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We granted stock options
at exercise prices equal to or greater than the quoted market price of our common stock on the grant date. The fair value of each
option grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions for the nine
months ended December 31, 2014:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 1in">
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 61%; text-align: justify; text-indent: 0in">Expected life (years)</td>
    <TD NOWRAP STYLE="vertical-align: bottom; width: 39%; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">1.5 &ndash; 6.1</font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">Risk-free interest rate</td>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">0.31%&nbsp;-&nbsp;2.03%</font></td></tr>
<TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">Volatility</td>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">102.7% &ndash; 127.7% </font></td></tr>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">Dividend yield</td>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-left: 0.1in; text-align: center; text-indent: 0in"><font style="font-size: 10pt">0%</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The expected option
life assumption is estimated based on the simplified method. Accordingly, the Company has utilized the average of the contractual
term of the options and the weighted average vesting period for all options to calculate the expected option term. The risk-free
interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options.
The expected volatility is based on the historical volatility of our stock commensurate with the expected life of the stock-based
award. We do not anticipate paying dividends on the common stock in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">We recognize stock-based
compensation cost over the vesting period using the straight-line single option method. Stock-based compensation expense is recognized
only for those awards that are ultimately expected to vest. An estimated forfeiture rate has been applied to unvested awards for
the purpose of calculating compensation cost. The estimated forfeiture rate of 0% per year is based on the historical forfeiture
activity of unvested stock options. These estimates are revised, if necessary, in future periods if actual forfeitures differ from
the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs. The
summary of stock option activity is as follows: <FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR> Shares</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Exercise<BR> Price/Share</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-<BR> Average<BR> Remaining<BR> Contractual<BR> Term&nbsp;(Years)</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><font style="font-size: 10pt"><b>Aggregate</b></font><br> <font style="font-size: 10pt"><b>Intrinsic</b></font><br> <font style="font-size: 10pt"><b>Value (1)</b></font></P> </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in">Outstanding&nbsp;&mdash; March 31, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">11,894,205</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.35</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Granted (weighted-average fair value of $0.35 per share)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,691,388</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.41</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,892</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.27</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Forfeited</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(222,369</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in">Expired</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(22,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.29</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Outstanding&nbsp;&mdash; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">21,333,132</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.38</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">8.5</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,047,600</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Vested (exercisable)&nbsp;&mdash; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7,177,674</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.39</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6.7</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">978,400</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 0in">Unvested (unexercisable)&nbsp;&mdash; December 31, 2014</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">14,155,458</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.37</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">9.4</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,069,200</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 18pt">(1)</TD><TD STYLE="text-align: justify">Aggregate intrinsic value represents the difference between the exercise price of the option and
the closing market price of our common stock on December 31, 2014, which was $0.44 per share.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.5pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As of December 31,
2014, there was unrecognized compensation expense of $4.4&nbsp;million related to unvested stock options, which we expect to recognize
over a weighted average period of 3.5&nbsp;years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Note 10.&nbsp;Subsequent
Events</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In January 2015, the
Company issued an accredited investor a 7% Bridge Note in the aggregate original principal amount of $250,000. In connection with
the issuance of such note, the Company issued the noteholder warrants to purchase 625,000 shares of common stock at an exercise
price of $0.50 per share. Through January 2015, notes in the aggregate principal amount of $865,000 and warrants to purchase 2,162,500
shares of common stock have been issued. In January 2015, the Company repaid $113,475 of the original principal amount outstanding
under the 7% Bridge Notes at December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On February 4, 2015,
The Company issued additional shares of the Class A Convertible Preferred Stock to Investors. Gross proceeds of $142,350 (approximately
$123,800 after offering costs) were collected in exchange for the issuance of 11,862 share of our Class A Convertible Preferred
Stock, and warrants, exercisable immediately through March 31, 2019, to purchase up to a total of 94,896 share of our common stock
at an exercise price of $0.50 per share. The Company intends to use the net proceeds for working capital purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>3,409,091 Shares of
Common Stock and Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>CRYOPORT, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Until _____________,
2015 (25 days after the commencement of this offering), all dealers that buy, sell or trade shares of our common stock, whether
or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the
obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">You should rely only
on the information contained or incorporated by reference to this prospectus in deciding whether to purchase our common stock.
We have not authorized anyone to provide you with information different from that contained or incorporated by reference to this
prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create
any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus.
To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a
fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>The date of this prospectus
is _________, 2015.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>Aegis Capital Corp</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>INFORMATION NOT REQUIRED
IN THE PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 1in; text-align: left"><B>ITEM 13.</B></TD><TD><B>OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -55.1pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following table
sets forth an estimate of the costs and expenses payable by us in connection with the offering described in this registration statement.
All of the amounts shown are estimates except the SEC registration fee:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt; padding-bottom: 1pt">SEC Registration Fee</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">$</TD><TD STYLE="text-align: right; padding-bottom: 1pt">_______<FONT STYLE="font: 10pt Times New Roman, Times, Serif">  &nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; text-align: left; text-indent: -12pt; padding-left: 12pt">Accounting Fees and Expenses</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">35,000.00</TD><TD STYLE="width: 1%; text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Printing and Engraving Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">20,000.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Blue Sky Filing Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">10,000.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -12pt; padding-left: 12pt">Legal Fees and Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">125,000.00</TD><TD STYLE="text-align: left">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt; padding-bottom: 1pt">Miscellaneous</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">_____.00</TD><TD STYLE="text-align: left; padding-bottom: 1pt">*</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -12pt; padding-left: 12pt; padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">200,000.00</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 1%">&nbsp;</td>
    <td style="width: 2%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">*</font></td>
    <td style="width: 97%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Estimated</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -12.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 1in; text-align: left"><B>ITEM 14</B>.</TD><TD><B>INDEMNIFICATION OF</B> <B>OFFICERS</B> <B>AND</B> <B>DIRECTORS</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 55.45pt; text-align: justify; text-indent: -55.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Under the Nevada Revised
Statutes and our Amended and Restated Articles of Incorporation, as amended, our directors will have no personal liability to us
or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his &ldquo;duty
of care.&rdquo; This provision does not apply to the directors&rsquo; (i)&nbsp;acts or omissions that involve intentional misconduct
or a knowing and culpable violation of law, (ii)&nbsp;acts or omissions that a director believes to be contrary to the best interests
of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii)&nbsp;approval
of any transaction from which a director derives an improper personal benefit, (iv)&nbsp;acts or omissions that show a reckless
disregard for the director&rsquo;s duty to the corporation or its stockholders in circumstances in which the director was aware,
or should have been aware, in the ordinary course of performing a director&rsquo;s duties, of a risk of serious injury to the corporation
or its stockholders, (v)&nbsp;acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication
of the director&rsquo;s duty to the corporation or its stockholders, or (vi)&nbsp;approval of an unlawful dividend, distribution,
stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance
of duties, including gross negligence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left">ITEM 15.</TD><TD>RECENT SALES OF UNREGISTERED SECURITIES</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The following is a
summary of transactions by Cryoport during the past three years involving the issuance and sale of Cryoport&rsquo;s securities
that were not registered under the Securities Act. Unless otherwise indicated, the issuance of the securities in the transactions
below were deemed to be exempt from registration under the Securities Act by virtue of the exemption under Section&nbsp;4(2) of
the Securities Act as a transaction by an issuer not involving a public offering, or by virtue of the exemption under Rule 506
of the Securities Act and Regulation D promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On March 6,
2015, the Company issued a convertible promissory note (the &ldquo;Exchange Note&rdquo;), effective February 20, 2015, in
the aggregate original amount of $35,761, which is convertible into shares of the Company&rsquo;s common stock in an amount
equal to the principal and accrued interest outstanding under a promissory note issued in 2005. &nbsp;&nbsp;The amended
and restated note was issued to an accredited investor in exchange for all of the principal and accrued interest
outstanding under a promissory note issued in 2005. In connection with the Exchange Note, on March 2, 2015, the Company
issued a warrant to purchase 2,235 shares of the Company&rsquo;s common stock at an exercise price of $4.00 to an accredited
investor in exchange for all of the principal and accrued interest outstanding under a promissory note issued in 2005.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On March 6,
2015, the Company issued amended and restated convertible promissory notes (the &ldquo;Amended and Restated Note&rdquo;),
effective March 2, 2015, in the aggregate original amounts of $448,164, $266,686 and $208,941 which are convertible into
shares of the Company&rsquo;s common stock based on the outstanding principal at the time of a Qualified Offering (as defined
therein). &nbsp;The amended and restated notes were issued to  three accredited investors as an amendment and restatement of
promissory notes issued in 2005. In connection with the Amended and Restated Notes, the Company issued warrants to purchase
an aggregate of 117,975 shares of the Company&rsquo;s common stock at an exercise price of $4.00 to the accredited investors,
a part of which was issued as compensation for fees and other expenses incurred by the accredited investors in connection with
the Amended and Restated Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Between February and
March 12, 2015, the company conducted a private placement pursuant to which the Company sold and issued an aggregate of 26,134
shares of Class B Convertible Preferred Stock and warrants to purchase 26,134 shares of common stock at $12.00 per unit, for gross
proceeds of $313,600. Emergent Financial Group, Inc. served as the Company&rsquo;s placement agent in this transaction and received
a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds received from the investors, plus reimbursement
of up to $5,000 of legal expenses. Emergent Financial Group, Inc. will also be issued a warrant to purchase three shares of common
stock at an exercise price of $4.00 per share for each eight issued in this transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During December 2014,
we issued 2014 Series Secured Promissory Notes (the &ldquo;7% Bridge Notes&rdquo;) in the aggregate original principal amount of
$615,000. The 7% Bridge Notes accrue interest at a rate of 7% per annum. All principal and interest is due on July 1, 2015 unless
we elect to extend the maturity date to January 1, 2016 by providing written notice to the note holders and a warrant to purchase
a number of shares of common stock equal to (a) the then outstanding principal balance of the note, divided by (b) $4.00 multiplied
by 125%. In connection with the issuance of the notes, we issued the note holders warrants to purchase 192,188 shares of common
stock at an exercise price of $4.00 per share. The warrants are exercisable on May 31, 2015 and expire on November 20, 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In August 2014, we
issued 2,500 shares of restricted common stock to a consultant in exchange for services. The Company recognized $9,000 in expense
related to these shares for the three and nine months ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Between May 2014 and
February 2015, the Company conducted a private placement pursuant to which the Company sold and issued an aggregate of 291,142
shares of Class A Convertible Preferred Stock and warrants to purchase 291,142 shares of common stock, at $12.00 per unit, for
gross proceeds of $3.5 million. In addition, the Company issued an aggregate of 163,608 shares of Class A Convertible Preferred
Stock and warrants to purchase 163,608 shares of common stock of the Company in exchange for the conversion of the 5% Bridge Notes
with an original principal and accrued interest amount of $1,766,997. Emergent Financial Group, Inc. served as the Company&rsquo;s
placement agent in this transaction and received, with respect to the gross proceeds received from investors who converted their
5% Bridge Notes, a commission of 3% and a non-accountable finance fee of 1% of such proceeds, and with respect to gross proceeds
received from all other investors, a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds
received from such investors, plus reimbursement of legal expenses of up to $40,000. Emergent Financial Group, Inc. will also be
issued a warrant to purchase three shares of common stock at an exercise price of $4.00 per share for each eight issued in this
transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In the fourth quarter
of fiscal year 2014, the Company issued to certain accredited investors 5% Bridge Notes in the original principal amount of $1,352,000,
including a note in the amount of $50,000 issued to Jerrell Shelton, the Company&rsquo;s Chief Executive Officer as well as a note
in the amount of $100,000 issued to GBR Investments, LLC, of which Richard Rathmann, a Director of the Company, is the manager.
All principal and interest under the 5% Bridge Notes was due on June 30, 2014. In connection therewith, the Company also granted
such accredited investors warrants to purchase 84,500 shares of common stock at an exercise price of $3.92 per share. The warrants
are exercisable on May 31, 2014 and expire on December 31, 2018.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In December 2013,
the Company issued to certain accredited investors 5% Bridge Notes in the original principal amount of $441,000, including a note
in the amount of $70,000 issued to Jerrell Shelton, the Company&rsquo;s Chief Executive Officer. In connection therewith, the Company
also granted such accredited investors warrants to purchase 27,563 shares of common stock at an exercise price of $3.92 per share.
The warrants are exercisable on May 31, 2014 and expire on December 31, 2018. Emergent Financial Group, Inc. served as the Company&rsquo;s
placement agent in connection with the placement of the 5% Bridge Notes and earned a commission of 9% of the original principal
balance of such notes, excluding the note issued to Jerrell Shelton, or $33,390 at the time of the original issuance of such notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On September 27, 2013,
September 30, October 2, and October 3, 2013, the Company issued 2,579,501 units (the &ldquo;<U>Units</U>&rdquo;) at a price of
$1.60 per Unit, with each Unit consisting of (i) one share of common stock of the Company and (ii) one warrant to purchase one
share of common stock of the Company at an exercise price of $2.96 per share in exchange for the retirement of $4,127,202 of outstanding
principal and interest under the Bridge Notes. The warrants are exercisable beginning on March 31, 2014 and have a term of five
years from date of issuance. The aggregate amount converted includes $101,945 and $202,740 of outstanding principal and interest
under Notes respectively held by Richard G. Rathmann, a director, and GBR Investments, LLC, in which Mr.&nbsp;Rathmann is the manager.
Emergent Financial Group, Inc. served as the Company&rsquo;s placement agent in connection with the original placement of the Bridge
Notes and was issued a warrant to purchase 238,907 shares of common stock of the Company at an exercise price of $1.60 per share
in connection with the conversion of such notes. Emergent Financial Group, Inc. did not receive any compensation with respect to
the Bridge Notes issued to Richard G. Rathmann or GBR Investments, LLC or the conversion of such Bridge Notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On July 12, 2013 and
August 12, 2013, GBR Investments, LLC, invested $100,000 in the Bridge Notes and also received a warrant to purchase 50,000 and
43,103 shares of common stock, respectively, at an exercise price of $2.00 and $2.32 per share, respectively. The terms were set
and offered by the Company to certain accredited investors prior to GBR&rsquo;s participation. Richard Rathmann, a member of the
Board of Directors of the Company, is the Manager of GBR investments, LLC and is considered an indirect beneficial owner of these
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During June 2013,
the Company issued warrants to purchase 131,579 shares of the Company&rsquo;s common stock at an exercise price of $1.52 per share
and a five year life to accredited investors in connection with the issuance of certain Bridge Notes in the aggregate amount of
$200,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On June 28, 2013,
the Company granted options to three officers of the Company, Jerrell Shelton, Chief Executive Officer, Robert Stefanovich, Chief
Financial Officer and Steve Leatherman, Chief Commercial Officer to purchase 487,813 shares, 104,877 shares and 100,882 shares,
respectively, of the Company&rsquo;s common stock at an exercise price equal to the closing price of the Company&rsquo;s common
stock, or $2.16 per share. These options were granted outside of the Company&rsquo;s incentive plans (see Note 7 to the condensed
consolidated financial statements).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In the fourth quarter
of fiscal year 2013, the Company issued to certain accredited investors unsecured convertible promissory notes (the &ldquo;Bridge
Notes&rdquo;) in the original principal amount of $1,294,500. The Bridge Notes accrue interest at a rate of 15% per annum from
date of issuance until January 31, 2013 and at a rate of 5% per annum from February 1, 2013 through the date of payment, in each
case on a non-compounding basis. All principal and interest under the Bridge Notes will be due on December 31, 2013. In the event
the Company designated and issued preferred stock while the Bridge Notes were outstanding, the Bridge Notes were convertible into
shares of such preferred stock at a conversion rate equal to the price per share paid to the Company in connection with the issuance
of such preferred stock at the option of the holder of the Bridge Notes. Effective on April 19, 2013, the Company amended the Bridge
Notes whereby in the event that the Company issues one or more types of equity securities (a &ldquo;Transaction&rdquo;) before
the maturity of the Bridge Notes, the holder may elect to convert all or a portion of the principal and accrued interest into shares
of such equity securities issued in a Transaction at a conversion rate equal to the price per share paid to the Company in connection
with the issuances. The Company is required to notify the holder of a Transaction within 10 days of each Transaction and the holder
has the option until the later of (a) ten (10) days after such notices or (b) December 15, 2013 to elect in writing to convert.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In November 2012,
the Company awarded the Company&rsquo;s new Chief Executive Officer an option to purchase 125,000 shares of the Company&rsquo;s
common stock with an exercise price of $1.60 per share. The option vests in six equal monthly installments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In April 2012, the
Company issued a warrant to purchase 3,750 shares of the Company&rsquo;s common stock at an exercise price of $4.00 per share to
a consultant for services rendered to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">In February and March
2012, the Company conducted a private placement pursuant to which the Company sold and issued an aggregate of 1,184,694 shares
of common stock at a price of $4.40 per share and common stock purchase warrants to acquire 1,184,694 shares of common stock at
an exercise price of $5.52 per share for gross proceeds of $5,212,655. The Company also issued warrants to purchase an aggregate
of 35,000 shares of the Company&rsquo;s common stock at an exercise price of $5.52 per share to our convertible note holders in
connection with a consent and waiver with respect to defaults that would have been triggered by this private placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During the quarter
ended December&nbsp;31, 2011, the Company issued 18,750 shares of common stock to two accredited investors upon their cash exercise
of warrants issued in conjunction with a private placement financing completed during the previous fiscal year. We received an
aggregate of $115,500 from the exercise of such warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On December&nbsp;5,
2011, the Company issued a warrant to purchase 19,481 shares of the Company&rsquo;s common stock at an exercise price of $6.16
to a consultant for services to be rendered over two years. The Company recognized $3,947 in expense related to these warrants
for the three and nine months ended December&nbsp;31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">During the quarter
ended September&nbsp;30, 2011, the Company issued 52,619 shares of common stock to five accredited investors upon their cash exercise
of warrants issued in conjunction with a private placement financing completed during the previous fiscal year. We received an
aggregate of $324,133 from the exercise of such warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">On July&nbsp;1, 2011,
the Company issued a warrant to purchase 1,250 shares of the Company&rsquo;s common stock at an exercise price of $9.60 to a consultant
for services to be rendered over three years. The Company recognized $8,297 in expense related to these warrants for the three
and six months ended September&nbsp;30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>ITEM&nbsp;16. EXHIBITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; text-align: justify; text-indent: 0in"><font style="font-size: 10pt"><b>Exhibit</b></font><br>
<font style="font-size: 10pt"><b>No.</b></font></td>
    <TD STYLE="padding-bottom: 1pt; text-align: left; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="border-bottom: black 1pt solid; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt"><b>Description</b></font></td></tr>
<tr>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in; width: 10%"><font style="font-size: 10pt">3.1</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in; width: 2%">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in; width: 88%"><font style="font-size: 10pt">Amended and Restated Articles of Incorporation of the Company, as amended.&nbsp;&nbsp;Incorporated by reference to Exhibit 3.1 to the Company&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2012.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in; width: 0%">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">3.2</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Amended and Restated Bylaws of the Company.&nbsp;&nbsp;Incorporated by reference to Exhibit 3.2 of the Company&rsquo;s Current Report on Form 8-K dated October 23, 2012.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">3.3</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Cryoport Systems, Inc. 2002 Stock Incentive Plan adopted by the Board of Directors on October 1, 2002. &nbsp;Incorporated by reference to Exhibit 3.13 to the Company&rsquo;s Registration Statement on Form 10-SB/A2 dated January 26, 2006.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">3.4</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Certificate of Designation.&nbsp;&nbsp;Incorporated by reference to Exhibit 3.1 of the Company&rsquo;s Current Report on Form 8-K dated May 2, 2014.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">3.5 </font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><font style="font-size: 10pt">&nbsp;</font></td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Certificate of Designation of Class B Preferred Stock. Incorporated by reference to Exhibit 3.1 of the Company&rsquo;s Current Report on Form 8-K dated February 20, 2015.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="vertical-align: top; padding-left: 0.1in">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">4.1</P></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Form of Common Stock
        Purchase Warrant dated September 28, 2007. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form SB-2 dated
        November 9, 2007.</P></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.2</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Common Stock Purchase Warrant dated May 30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June 9, 2008.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.3</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Common Stock Purchase Warrant dated May 30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June 9, 2008.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.4</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Warrant and Warrant Certificate in connection with the February 25, 2010 public offering. Incorporated by reference to Cryoport&rsquo;s Amendment No. 5 to Form S-1/A Registration Statement dated February 9, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.5</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Securities Purchase Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1 dated October 19, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.6</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of First Amendment to Security Purchase Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1 dated October&nbsp;19, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.7</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Securities Purchase Agreement (Continuation of the Placement) in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1 dated October 19, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.8</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Registration Rights Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1 dated October 19, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.9</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Joinder to Registration Rights Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1 dated October 19, 2010.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.10</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Securities Purchase Agreement in connection with the February&nbsp;2011 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form&nbsp;S-1 dated April&nbsp;1, 2011.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.11</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Registration Rights Agreement in connection with the February&nbsp;2011 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form&nbsp;S-1 dated April&nbsp;1, 2011.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in"><font style="font-size: 10pt">4.12</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Warrant in connection with the August to October&nbsp;2010 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form&nbsp;S-1/A dated April&nbsp;22, 2011.</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>


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<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; width: 10%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.13</FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 88%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant in connection with the February&nbsp;2011 private placement. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form&nbsp;S-1/A dated April&nbsp;22, 2011.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.14</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Securities Purchase Agreement. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on February 24, 2012.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.15</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Registration Rights Agreement. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on February 24, 2012.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.16</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on February 24, 2012.</FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.17</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrant issued to Rodman &amp; Renshaw, LLC in connection with the February 25, 2010 public offering. Incorporated by reference to CryoPort&rsquo;s Registration Statement on Form S-1 dated October&nbsp;19, 2010.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.18</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant issued with Convertible Promissory Notes.&nbsp;&nbsp;Incorporated by reference to Exhibit 4.20 of Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.19</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant issued upon Conversion of Convertible Promissory Notes.&nbsp;&nbsp;Incorporated by reference to Exhibit 4.21 of Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013. </FONT></TD></TR>
<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.20</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant Issued to Placement Agents.&nbsp;&nbsp;Incorporated by reference to Exhibit 4.22 of Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013. </FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.21</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant issued with Convertible Promissory Notes (5% Bridge Notes).&nbsp;&nbsp;Incorporated by reference to Exhibit 4.23 of Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended December 31, 2013.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.22</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant issued in connection with the May 2014 private placement. Incorporated by reference to Exhibit 4.24 of Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2014.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.23&dagger;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant and Warrant Certificate to be issued in connection with the offering contemplated by this Registration Statement on Form S-1.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.24</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrant to Purchase Common Stock. Incorporated by reference to Exhibit 4.1 of the Company&rsquo;s Current Report on Form 8-K dated December 9, 2014.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.25</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Warrant to Purchase Common Stock. Incorporated by reference to Exhibit 4.1 of the Company&rsquo;s Current Report on Form 8-K dated February 20, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.26</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of Warrant issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 4.1 of the Company&rsquo;s Current Report on Form 8-K dated March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.27</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of March Warrant issued in connection with the Investment Agreement. Incorporated by reference to Exhibit 4.2 of the Company&rsquo;s Current Report on Form 8-K dated March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4.28</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Form of March Fee Warrant issued in connection with the Investment Agreement. Incorporated by reference to Exhibit 4.3 of the Company&rsquo;s Current Report on Form 8-K dated March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="padding-left: 0.1in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">5.1+</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Legal Opinion of Snell &amp; Wilmer L.L.P.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;10.1.1</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commercial Promissory Note between Cryoport, Inc. and D. Petreccia executed on August&nbsp;26, 2005. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form 10-SB/A4 dated February&nbsp;23, 2006.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;10.1.2</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commercial Promissory Note between Cryoport, Inc. and J. Dell executed on September 1, 2005. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form 10-SB/A4 dated February&nbsp;23, 2006.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;10.1.3</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commercial Promissory Note between Cryoport, Inc. and P. Mullens executed on September 2, 2005. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form 10-SB/A4 dated February&nbsp;23, 2006.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD></TR>
<TR>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;10.1.4</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commercial Promissory Note between Cryoport, Inc. and R. Takahashi executed on August 25, 2005. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form 10-SB/A4 dated February&nbsp;23, 2006.</FONT></TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr>
    <TD STYLE="text-align: justify"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;10.2.1</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Lease Agreement dated June 26, 2007 between CryoPort, Inc. and Viking Investors&mdash;Barents Sea LLC. Incorporated by reference to CryoPort&rsquo;s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2007 and referred to as Exhibit 10.5</font></td></tr>
<tr>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: justify"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;10.2.2</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Second Amendment To Lease: Renewal dated August 24, 2009, between CryoPort, Inc. and Viking Inventors-Barents Sea LLC. Incorporated by reference to Cryoport&rsquo;s Amendment No. 1 to Form&nbsp;S-1/A Registration Statement dated January 12, 2010.</font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="text-align: justify"><font style="font-size: 10pt">&nbsp;&nbsp;&nbsp;10.2.3</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Third Amendment to Lease: Renewal dated June 8, 2010 between Viking Investors Barents Sea, LLC. Incorporated by reference to Exhibit 10.5.3 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2013.</font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="padding-left: 0.1in"><font style="font-size: 10pt">10.3</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Securities Purchase Agreement dated September 27, 2007. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.6.</font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.125in"><font style="font-size: 10pt">10.4</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Registration Rights Agreement dated September 27, 2007. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.7.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.125in"><font style="font-size: 10pt">10.5</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Security Agreement dated September 27, 2007. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.8.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.125in"><font style="font-size: 10pt">10.6</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Securities Purchase Agreement dated May 30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.10.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in; padding-left: 0.125in"><font style="font-size: 10pt">10.7</font></td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Registration Rights Agreement dated May 30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.11.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.8</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Waiver dated May 30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.12.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.9</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Security Agreement dated May&nbsp;30, 2008. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated June&nbsp;9, 2008 and referred to as Exhibit 10.13.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.10</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Consent, Waiver and Agreement with Enable Growth Partners LP, Enable Opportunity Partners LP, Pierce Diversified Strategy Master Fund LLC, Ena, BridgePointe Master Fund Ltd. and Cryoport Inc. and its subsidiary dated July 30, 2009. Incorporated by reference to Cryoport&rsquo;s Current Report on Form 8-K dated July 29, 2009 and referred to as Exhibit 10.15.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.11.1</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Master Consulting and Engineering Services Agreement dated October 9, 2007 with KLATU Networks, LLC and CryoPort, Inc. Incorporated by reference to Cryoport, Inc.&rsquo;s Registration Statement on Form S-8 dated March 25, 2009 and referred to as Exhibit 10.2.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.11.2</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">First Amendment to Master Consulting and Engineering Services Agreement dated as of April 23, 2009, between CryoPort, Inc. and KLATU Networks, LLC. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1/A dated December 17, 2010 and referred to as Exhibit 10.32.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.11.3</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Second Amendment to Master Consulting and Engineering Services Agreement dated as of November 1, 2010, between CryoPort, Inc. and KLATU Networks, LLC. Incorporated by reference to Cryoport&rsquo;s Registration Statement on Form S-1/A dated December 17, 2010 and referred to as Exhibit 10.33.</font></td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.12</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Stock Option Agreement ISO under the 2002 Stock Incentive Plan of Cryoport Systems, Inc. Incorporated by reference to Exhibit 3.14 to the Company&rsquo;s Registration Statement on Form 10-SB/A2 dated January 26, 2006.</font></td></tr>
<tr>
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.13</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Stock Option Agreement NSO under the 2002 Stock Incentive Plan of Cryoport Systems, Inc. Incorporated by reference to Exhibit 3.15 to the Company&rsquo;s Registration Statement on Form 10-SB/A2 dated January 26, 2006.</font></td></tr>
<tr>
    <td nowrap colspan="2" style="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.14</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">2009 Stock Incentive Plan of the Company. &nbsp;Incorporated by reference to Exhibit 10.21 of the Company&rsquo;s Current Report on Form 8-K dated October 15, 2009 and referred to as Exhibit 10.21.</font></td></tr>
<tr>
    <td nowrap colspan="2" style="vertical-align: top; padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <td nowrap colspan="2" style="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.15</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form Incentive Stock Option Award Agreement under the 2009 Stock Incentive Plan of the Company. Incorporated by reference to Exhibit 10.22 of the Company&rsquo;s Current Report on Form 8-K dated October 9, 2009.</font></td></tr>
<tr>
    <TD STYLE="width: 10%">&nbsp;</td>
    <TD STYLE="width: 2%">&nbsp;</td>
    <TD STYLE="width: 0%">&nbsp;</td>
    <TD STYLE="width: 88%">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>


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<tr style="vertical-align: top">
    <TD NOWRAP STYLE="width: 10%; padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.16</font></td>
    <TD STYLE="width: 2%; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 88%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Non-Qualified Stock Option Award Agreement under the 2009 Stock Incentive Plan of the Company. Incorporated by reference to Exhibit 10.25 of the Company&rsquo;s Registration Statement on Form S-8 dated April 27, 2010.</font></td></tr>
<tr>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.17</FONT></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">2011 Stock Incentive Plan (as amended and
    restated).</font> Incorporated by reference to Exhibit B of the Company&rsquo;s Definitive Proxy Statement on Schedule 14A
    filed with the SEC on July 30, 2012.</td></tr>
<tr>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.18</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Stock Option Award Agreement. Incorporated by reference to Exhibit&nbsp;10.37 to Cryoport&rsquo;s Current Report on Form&nbsp;8-K filed with the SEC on September&nbsp;27, 2011.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.19</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Non-Qualified Stock Option Award Agreement. Incorporated by reference to Exhibit&nbsp;10.38 to Cryoport&rsquo;s Current Report on Form&nbsp;8-K filed with the SEC on September 27, 2011.</font></td></tr>
<tr>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.20</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Convertible Promissory Note. Incorporated by reference to Exhibit 10.24 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.21</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Amendment to Convertible Promissory Note. Incorporated by reference to Exhibit 10.25 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.22</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Convertible Promissory Note. Incorporated by reference to Exhibit 10.26 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.23*</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Employment Agreement between the Company and Jerrell Shelton.&nbsp;&nbsp;Incorporated by reference to the Company&rsquo;s Current Report on Form 8-K filed on November 6, 2012 and referred to as Exhibit 10.45.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.24*</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Stock Option Agreement dated November 5, 2012 between the Company and Jerrell Shelton. Incorporated by reference to Exhibit 10.28 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2013.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.25#</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Master Agreement between the Company and Federal Express Corporation dated January 1, 2013. Incorporated by reference to the Company&rsquo;s Current Report on Form 8-K filed on January 8, 2013 and referred to as Exhibit 10.1.</font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.26*</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Employment Agreement dated June 28, 2013 with Jerrell Shelton.&nbsp;&nbsp;Incorporated by reference to Exhibit 10.30 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on July 3, 2013.</font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.27</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Convertible Promissory Notes issued with Warrants.&nbsp;&nbsp;Incorporated by reference to Exhibit 10.31 to Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.28</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Letter of Tender and Exchange.&nbsp;&nbsp;Incorporated by reference to Exhibit 10.32 to Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.29</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Convertible Promissory Note (5% Bridge Note) issued with Warrants.&nbsp;&nbsp;Incorporated by reference to Exhibit 10.33 to Cryoport&rsquo;s Quarterly Report on Form 10-Q for the Quarter Ended December 31, 2013. </font></td></tr>
<tr style="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.30</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Subscription Agreement in connection with the May 2014 private placement. Incorporated by reference to Exhibit 10.34 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2014.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.31</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Election to Convert in connection with the May 2014 private placement. Incorporated by reference to Exhibit 10.35 to Cryoport&rsquo;s Annual Report on Form 10-K filed with the SEC on June 25, 2014.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.32</font></td>
    <TD>&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Form of Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on July 16, 2014.&nbsp;</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.33</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Subscription Agreement and Letter of Investment Intent. Incorporated by reference to Exhibit 10.1 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on December 9, 2014.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.34</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">2014 Series Secured Promissory Note. Incorporated by reference to Exhibit 10.2 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on December 9, 2014.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.35</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Security Agreement. Incorporated by reference to Exhibit 10.3 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on December 9, 2014.</font></td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">10.36</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Subscription Agreement and Letter of Investment Intent. Incorporated by reference to Exhibit 10.1 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on February 20, 2015.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 10%; padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.37</FONT></TD>
    <TD STYLE="width: 2%; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 88%; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Form of Note Exchange Agreement and Letter of Investment Intent, dated February 19, 2015. Incorporated by reference to Exhibit 10.1 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.38</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Form of Exchange Note issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 10.2 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.39</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Form of Letter of Investment Intent, dated March 2, 2015. Incorporated by reference to Exhibit 10.3 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.40</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Form of Amended and Restate Note issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 10.4 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">10.41</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Amendment to Simple Interest Commercial Promissory Note, dated March 2, 2015. Incorporated by reference to Exhibit 10.5 to Cryoport&rsquo;s Current Report on Form 8-K filed with the SEC on March 9, 2015.</FONT></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">21+</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Subsidiaries of Registrant.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">23.1+</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Consent of Independent Registered Public Accounting Firm&mdash;KMJ Corbin &amp; Company LLP.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">23.2+</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">Consent of Snell &amp; Wilmer L.L.P. (included in Exhibit 5.1).</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.INS&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Instance Document.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.SCH&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Taxonomy Extension Schema Document.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.CAL&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Taxonomy Extension Calculation Linkbase Document.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.DEF&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Taxonomy Extension Definition Linkbase Document.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.LAB&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Taxonomy Extension Label Linkbase Document.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="padding-left: 0.1in; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">101.PRE&dagger;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">XBRL Taxonomy Extension Presentation Linkbase Document.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 8%">&nbsp;</td>
    <TD STYLE="width: 4%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">*</font></td>
    <TD STYLE="width: 88%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Indicates a management contract or compensatory plan or arrangement.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 8%">&nbsp;</td>
    <TD STYLE="width: 4%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">#</font></td>
    <TD STYLE="width: 88%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Confidential portions omitted and filed separately with the U.S. Securities and Exchange Commission pursuant to Rule&nbsp;24b-2 promulgated under the Securities Exchange Act of 1934, as amended.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <TD STYLE="width: 8%">&nbsp;</td>
    <TD STYLE="width: 4%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">+</font></td>
    <TD STYLE="width: 88%; text-align: justify; text-indent: 0in"><font style="font-size: 10pt">Filed herewith.</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 8%">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: left; text-indent: 0in"><FONT STYLE="font-size: 10pt">&dagger;</FONT></TD>
    <TD STYLE="width: 88%; text-align: justify; text-indent: 0in">To be filed by  Amendment.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">ITEM&nbsp;17. UNDERTAKINGS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The undersigned registrant
hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">*(a) (1)&nbsp;To file,
during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i)&nbsp;to
include any prospectus required by section 10(a)(3) of the Securities Act;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: justify; text-indent: 0.25in">(ii) to
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the &ldquo;Calculation of Registration Fee&rdquo; table in the effective registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: justify; text-indent: 0.25in">(iii) to
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">(2) That, for the
purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">(3) To remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of this offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">(5) That, for the
purpose of determining liability under the Securities Act of 1933 to any purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: justify; text-indent: 0.25in">(ii) If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.35in">*(h) Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -12.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt">*</FONT> <FONT STYLE="font-size: 10pt">Paragraph references correspond to those of Regulation S-K, Item&nbsp;512.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the requirements
of the Securities Act, as amended, the registrant has duly caused this amendment to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Lake Forest, California, on this 25<SUP>th</SUP> day of March, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in"><font style="font-size: 10pt">CRYOPORT, INC.</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <td colspan="2" style="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 48%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Dated: March 25, 2015</font></td>
    <TD STYLE="width: 2%; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 5%; text-align: left; text-indent: 0in"><font style="font-size: 10pt">By:</font></td>
    <TD STYLE="width: 45%; border-bottom: black 1pt solid; text-align: left; text-indent: 0in"><font style="font-size: 10pt">/S/&nbsp;JERRELL W. SHELTON</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Jerrell W. Shelton</b></font></td></tr>
<tr>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Chief Executive Officer and</font></td></tr>
<tr>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; padding-left: 0.1in; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: bottom; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">Pursuant to the requirements
of the Securities Exchange Act of 1933, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: black 1pt solid; text-align: center; text-indent: 24.5pt"><b>Signature</b></td>
    <TD STYLE="width: 2%; padding-bottom: 1pt; text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 35%; border-bottom: black 1pt solid; text-align: center; text-indent: 24.5pt"><b>Title</b></td>
    <TD STYLE="width: 2%; padding-bottom: 1pt; text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="width: 21%; border-bottom: black 1pt solid; text-align: center; text-indent: 24.5pt"><b>Date</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-bottom: 1pt; text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="padding-bottom: 1pt; text-align: center; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Jerrell W. Shelton</font></font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Chief Executive Officer and Director (Principal Executive Officer)</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25,
    2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Jerrell W. Shelton</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Robert S. Stefanovich</font></font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in"><font style="font-size: 10pt">Chief Financial Officer (Principal Financial and Accounting Officer)</font></td>
    <TD STYLE="vertical-align: top; text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="vertical-align: top; text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25,
    2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Robert S. Stefanovich</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Richard G. Berman</font></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25, 2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Richard J. Berman</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Ramkumar Mandalam, Ph.D&nbsp;</font></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25, 2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Ramkumar Mandalam</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Edward Zecchini&nbsp;</font></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25, 2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Edward Zecchini</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
<tr style="vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; padding-left: 12pt; text-align: left; text-indent: -12pt"><font style="font-size: 10pt">/s/ <font style="font-variant: small-caps">Richard G. Rathmann&nbsp;</font></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt">Director</font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: center; text-indent: 0in"><font style="font-size: 10pt">March 25, 2015</font></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in"><font style="font-size: 10pt"><b>Richard G. Rathmann</b></font></td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>


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[{"type": "S-1", "sequence": "1", "filename": "v405174_s1.htm", "description": "FORM S-1", "secsgml_size_bytes": 1693547}]
{"company-data": {"conformed-name": "Cryoport, Inc.", "cik": "0001124524", "assigned-sic": "3086", "irs-number": "880313393", "state-of-incorporation": "NV", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-203006", "film-number": "15725604"}, "business-address": {"street1": "20382 BARENTS SEA CIRCLE", "city": "LAKE FOREST", "state": "CA", "zip": "92630", "phone": "(619) 481-6800"}, "mail-address": {"street1": "20382 BARENTS SEA CIRCLE", "city": "LAKE FOREST", "state": "CA", "zip": "92630"}, "former-company": [{"former-conformed-name": "CRYOPORT SYSTEMS LLC", "date-changed": "20010614"}, {"former-conformed-name": "CRYOPORT SYSTEMS INC", "date-changed": "20000923"}]}
As filed with the Securities
and Exchange Commission on March 25, 2015
Registration Number 333-______
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF
1933
CRYOPORT, INC.
(Exact Name of Registrant
as Specified in its Charter)
Nevada
3086
88-0313393
(State or Other
Jurisdiction of
Incorporation or
Organization)
(Primary Standard
Industrial
Classification Code
Number)
(I.R.S. Employer
Identification No.)
20382 Barents Sea Circle,
Lake Forest, CA 92630
(949) 470-2300
(Address, Including Zip
Code, and Telephone Number, Including Area Code, of Principal Executive Offices)
Robert Stefanovich
Chief Financial Officer
20382 Barents Sea Circle,
Lake Forest, CA 92630
(949) 470-2300
(Name, Address, Including
Zip Code, and Telephone Number, Including Area Code, of Agent For Service
Copies to:
Anthony Ippolito, Esq.
Snell & Wilmer
L.L.P.
600 Anton Boulevard, Suite
1400
Costa Mesa, California
92626
Tel: (714) 427-7000
Fax: (714) 427-7799
Approximate date of
commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.
If any of the securities
being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, as amended, check the following box.
x
If this form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering.
¨
If this form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same offering.
¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
¨
Accelerated filer
¨
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
Smaller reporting company
x
CALCULATION OF REGISTRATION
FEE
Title of Each Class of Securities to be Registered
Proposed Maximum
Aggregate
Offering Price (1)
Amount of
Registration Fee
Shares of common stock, $0.001 par value,  and warrants issued in the offering
$
15,000,000
$
1,743
Shares of common stock underlying the warrants included in the Offering (2)
$
16,500,000
$
1,917
Share of common stock, $0.001 par value, and warrants, issuable upon exercise of the representative of the underwriters' over-allotment
$
2,250,000
$
261
Shares of common stock underlying the warrants included in the Offering, issuable upon exercise of the representative of the underwriters' over-allotment (2)
$
825,000
$
96
Total
$
34,575,000
$
4,017
Unless otherwise indicated,
all share amounts and prices assume the consummation of a reverse stock split, at a ratio of 8-to-1, to be effected prior to the
effectiveness of the registration statement, with the exact timing of the reverse stock split to be determined by the registrant's
Board of Directors.
(1)
Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.
(2)
Pursuant to Rule 416, the registrant is also registering an indeterminate number of additional shares of common stock that are issuable by reason of the anti-dilution provisions of the warrants.
The registrant hereby
amends this registration statement on such date or date(s) as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act, or until the registration statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.
ii
The information
in this prospectus is not complete and may be changed. The securities may not be sold until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting
an offer to buy these securities in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION
DATED MARCH __, 2015
3,409,091
Shares of
Common
Stock and Warrants
This is a firm commitment
public offering of 3,409,091 shares of common stock and warrants of Cryoport, Inc. consisting of one share of common stock and
a warrant to purchase one share of common stock at an exercise price of 110% of the public offering price of a share of common
stock in this offering. The common stock and warrants are immediately separable and will be issued separately.
Our common stock is currently
traded on the OTC Bulletin Board under the symbol CYRX. Prior to the effectiveness of the registration statement of which this
prospectus is a part, we will effect a reverse stock split anticipated to be on a 8-to-1 basis. On March 12, 2015, the last reported
sale price for our common stock was $4.40 per share (after giving effect to the anticipated 8-to-1 reverse stock split). We have
applied for listing of our common stock on the NASDAQ Capital Market under the symbol ["*"]. No assurance can be given
that our application will be approved.
Investing in our common
stock and warrants involves a high degree of risk. Please read "Risk Factors" beginning on page 9 of this prospectus
for a discussion of information that should be considered in connection with an investment in our common stock and warrants.
Neither the Securities
and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved these securities
or determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Per share
of common stock
and warrant
Total
Public offering price
$
$
Underwriting discounts and commissions (1)
$
$
Proceeds, before offering expenses, to us (2)
$
$
(1)
Does not include a non-accountable expense allowance
equal to 1% of the gross proceeds of this offering (or $150,000) payable to Aegis Capital Corp., the representative of the underwriters.
See "Underwriting" for a description of compensation payable to the underwriters.
(2)
We estimate that the total expenses of this offering will be approximately $350,000, consisting
of $150,000 for the underwriter's non-accountable expense allowance (equal to 1% of the gross proceeds of this offering)
and $200,000 for legal, accounting, printing costs and various fees associated with the registration and listing of our shares
of common stock and warrants.
We have granted a 45-day
option to the representative of the underwriter to purchase $2,250,000 of shares of common stock and warrants to be offered by
us solely to cover over-allotments, if any. If the underwriters exercise their right to purchase additional shares of common stock
and warrants to cover over-allotments, we estimate that we will receive gross proceeds of $2,250,000 from the sale of 511,364 shares
of common stock and warrants being offered at an assumed public offering price of $4.40 per share of common stock and a warrant
to purchase one share of common stock and net proceeds of $2,092,500 after deducting $157,500 for underwriting discounts and commissions.
The shares of common stock and warrants issuable upon exercise of the underwriter option are identical to those offered by this
prospectus and have been registered under the registration statement of which this prospectus forms a part.
iii
In connection with this
offering, we have also agreed to issue to Aegis Capital Corp., the underwriters' representative, a warrant to purchase up
to 4% of the shares of common stock included in the shares of common stock and warrants sold (or 136,364 shares based on 3,409,091
shares of common stock and warrants). If the underwriters' representative exercises this warrant, each share of common stock
may be purchased at $6.05 per share (137.5% of the price of the shares of common stock and warrants sold in this offering), commencing
on a date that is one year from the effective date of the registration statement and expiring five years from the effective date
of the registration statement.
The underwriters expect
to deliver our shares of common stock and warrants to purchasers in this offering on or about [*], 2015.
Aegis Capital Corp
iv
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY
1
RISK FACTORS
9
FORWARD-LOOKING STATEMENTS
22
USE OF PROCEEDS
23
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
23
DETERMINATION OF OFFERING PRICE
25
CAPITALIZATION
25
DILUTION
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
28
BUSINESS
42
DESCRIPTION OF PROPERTY
57
LEGAL PROCEEDINGS
58
DIRECTORS AND EXECUTIVE OFFICERS
58
SUMMARY COMPENSATION TABLE
61
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END 2014
63
DIRECTOR COMPENSATION
65
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
67
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
67
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
69
DESCRIPTION OF SECURITIES
71
UNDERWRITING
72
LEGAL MATTERS
80
EXPERTS
80
WHERE YOU CAN FIND MORE INFORMATION
80
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
81
You may only rely on the
information contained in this prospectus or in any free writing prospectus that we may specifically authorize to be delivered or
made available to you. We have not authorized anyone to provide you with different information. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities other than the common stock and the warrants offered by this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any common stock or warrants
in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus nor any sale made
in connection with this prospectus shall, under any circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus or that the information incorporated by reference to this prospectus is correct as of
any time after its date.
i
PROSPECTUS SUMMARY
This summary highlights
information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing
in our shares of common stock and warrants. You should read this entire prospectus carefully, especially the risks of investing
in our common stock and warrants discussed under "Risk Factors" beginning on page 9 and the consolidated financial
statements and notes to those consolidated financial statements, before making an investment decision. Cryoport, Inc. is referred
to throughout this prospectus as "Cryoport," "Company," "we" or "us."
Overview
Cryoport is a leading
provider of cryogenic logistics solutions to the life sciences industry through its purpose-built proprietary packaging, information
technology and specialized cold chain logistics expertise. We provide leading edge logistics solutions for biologic materials such
as immunotherapies, stem cells, CAR-T cells, and reproductive cells for clients worldwide including points-of-care, CRO's,
central laboratories, biopharmaceuticals, contract manufacturing, health centers and university research. Our packaging is built
around our proprietary Cryoport Express
®
liquid nitrogen dry vapor shippers, which are validated to maintain a constant
-150°C temperature for a ten day dynamic shipment duration. Our information technology centers on our Cryoportal™ Logistics
Management Platform, which facilitates management of the entire shipment process.
We view our solutions
as disruptive to "older technologies" such as dry ice, in that our solutions provide reliable, economic alternatives
to existing solutions and services utilized for frozen shipping in life sciences, including immunotherapies, stem cells, cell lines,
vaccines, diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances and other items that
require continuous exposure to frozen or cryogenic temperatures.
Our Cryoport Express
®
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal™. The Cryoportal™
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal™ records
and retains a fully documented "chain-of-custody" and, at the client's option, "chain-of-condition"
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.
The branded packaging
for our Cryoport Express
®
Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express
®
Shippers. The Cryoport Express
®
Shippers
are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of "dry vapor" liquid nitrogen
("LN2") technology. Cryoport Express
®
Shippers are International Air Transport Association ("IATA")
certified and validated to maintain stable temperatures of minus 150° C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express
®
Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express
®
CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)
Our most used solution
is the "turnkey" solution, which can be accessed directly through our cloud-based Cryoportal™ or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express
®
Shipper to the client
who conveniently loads its frozen commodity into the inner chamber of the
Cryoport
Express
®
Shipper
. The customer then closes the shipper package and reseals the shipping
box displaying the next recipient's address ("Flap A") for pre-arranged carrier pick up.
Cryoport arranges
for the pick-up of the parcel by a shipping service provider, which is designated by the client or chosen by Cryoport, for delivery
to the client's intended recipient. The recipient simply opens the shipper package and removes the frozen commodity that
has been shipped. The recipient then reseals the package, displaying the nearest Cryoport Operations Center address ("Flap
B"), making it ready for pre-arranged carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper, it is cleaned, put through quality assurance testing, and returned to inventory for reuse.
In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, established customer facing solutions and took a consultative approach
to the market. Today, in addition to our standard "Turn-key Solution," described above, we also provide the following
customer facing, value-added solutions to address our various clients' needs:
1
·
"
Customer
Staged Solution
," designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express
®
Shippers to our customer, in an uncharged state, enabling our customer (after
training/certification) to charge them with liquid nitrogen and use our Cryoportal™ to enter orders with shipping and delivery
service providers for the transportation of the package.
·
"
Customer Managed
Solution
," a limited customer implemented solution, whereby we supply our Cryoport Express
®
Shippers
to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of the shipping
and delivery service provider and the return of the shipper to us.
·
"
powered by Cryoport
SM
,"
available to providers of shipping and delivery services who seek to offer a "branded" cryogenic logistics solution
as part of their service offerings, with "
powered by Cryoport
SM
" appearing prominently on the offering
software interface and packaging. This solution can also be private labeled upon meeting certain requirements, such as minimum
required shipping volumes.
·
"
Integrated Solution,
"
which is our total outsource solution. It is our most comprehensive solution and involves our management of the entire cryogenic
logistics process for our client, including Cryoport employees at the client's site to manage the client's cryogenic
logistics function in total.
·
"
Regenerative
Medicine Point-of-Care Repository Solution,
" designed for allogeneic therapies. In this solution we supply our Cryoport
Express
®
Shipper to ship and store cryogenically preserved life science products for up to six days (or longer
periods with supplementary shippers) at a point-of-care site, with the Cryoport Express
®
Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device.
·
"
Personalized
Medicine and Cell-based Immunotherapy Solution,
" designed for autologous therapies.  In this solution
our Cryoport Express
®
Shipper serves as an enabling technology for the safe transportation of manufactured autologous
cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition
transport from, (a) the collection of the patient's cells in a hospital setting, to (b) a central processing facility where
they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells
to a point-of-care treatment facility.  If required, the Cryoport Express
®
Shipper can then serve as
a temporary freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where
the medical provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation
device.
Competitive Advantages
With our first-to-market
cryogenic logistics solutions for the life sciences industry, we have established a unique lead over potential competitors. Furthermore,
we are not aware of a company that offers comparable solutions and has the same capabilities Cryoport has as a global provider
of advanced, validated cryogenic logistics solutions. As a solutions company working with our tools in packaging, information technology,
and cryogenic logistics, we address our growing $1.7 billion cryogenic logistics market in innovative and creative ways.
The majority of our competition
utilizes "old technologies." In fact, most of our market still uses dry ice and liquid nitrogen. In the case of dry
ice the technology does not deliver cryogenic temperatures and, consequently, this medium allows cells to degrade, sometimes beyond
any utility. When biology was less developed, dry ice was believed to be acceptable and was readily available.
Liquid nitrogen, on the
other hand, while effective, is bulky, expensive and has special handling requirements. Both dry ice and liquid nitrogen are classified
"hazardous" by shipping companies and regulatory authorities. In addition to being ineffective and/or classified as
"dangerous goods," they are inefficient when compared to Cryoport solutions. Conversely, Cryoport's solutions
are classified as non-hazardous.
Having been validated
and qualified as a solutions provider for hundreds of life sciences companies and institutions, Cryoport has logged over 20,000
shipments to over 80 countries with hundreds of life sciences materials. We also have experienced that once life sciences companies
start utilizing our advance cryogenic logistics solutions, we experience minimal client attrition.
While we look at companies
such as Thermo Fisher Scientific, AmerisourceBergen Corporation and Marken as potential competitors, some of these companies are
also our customers.
We think our competitive
position is further enhanced by our respective "powered by Cryoport" partnership agreements with FedEx, DHL and UPS,
who collectively, account for approximately 85% of world's air freight and who, individually, have been expanding their offerings
of cold chain logistics solutions to the life sciences industry. In short, we are the cryogenic solution for each of them, employing
our packaging, our software and our logistics expertise.
2
The challenge for our
seasoned, professional management team is to maintain what we believe to be a four year lead in the marketplace. In other words,
we think it would take a serious potential competitor, at least, four years to build out the competencies that we possess and the
knowledge we have of the marketplace.
In addition to our intellectual
property consisting of three issued U.S. patents, one pending U.S. patent application, and one U.S. provisional patent application
and our lead as the first to market mover, we think our biggest competitive advantage is our speed to market with new solutions
and our sensitivity to anticipate and react to market needs. Our solutions are comprehensive and it is in our "DNA"
to maintain our market lead by employing the best people in the industry as well as our current and new technologies to maintain
that lead.
Given today's environmental
concerns, we also consider the fact that we are "green" to be a competitive advantage. Our packaging materials are
recyclable and the key components are reusable. The fact that the inner and outer shells of our shippers are made of aircraft-grade
aluminum makes these components recyclable as well. We take our responsibility toward the environment seriously.
Strategic Logistics
Alliances
We have sought to establish
strategic alliances as a method of marketing our solutions to the life sciences industry. We have focused our efforts on leading
companies in the logistics services industry as well as participants in the life sciences industry. In connection with our alliances
with providers of shipping services, we refer to their offerings as "
powered by Cryoport
SM
" to reflect
our solutions being integrated into our alliance partner's services.
Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.
FedEx.
In January
2013, we entered into a master agreement with Federal Express Corporation ("FedEx") (the "FedEx Agreement")
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal
TM
for the management of shipments made by FedEx customers. Under our FedEx Agreement, we provide frozen shipping logistics services
through the combination of our purpose-built proprietary technologies and turnkey management processes. FedEx markets and sells
Cryoport's services for frozen temperature-controlled cold chain transportation as its FedEx
®
Deep Frozen
Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year 2013, the Company worked closely with FedEx
to further align its sales efforts and accelerate penetration within FedEx's life sciences customer base through improved
processes, sales incentives, joint customer calls and more frequent communication at the sales and executive level. In addition,
FedEx has developed a FedEx branded version of the Cryoportal
TM
software platform, which is "
powered by Cryoport
SM
"
for use by its customers, giving them access to the full capabilities of our cloud-based logistics management software platform.
DHL.
In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding ("DHL"). DHL has now enhanced its
cold chain logistics offerings to its life sciences and healthcare customers with Cryoport's validated cryogenic solutions.
DHL added 15 additional certified Life Sciences stations in the second quarter of 2014 bringing its Thermonet network to 60 stations
in operation. This expanded network offers Cryoport's cryogenic solutions under the DHL brands as "
powered by Cryoport
SM
".
In addition, DHL's customers have direct access to our cloud-based order entry and tracking portal to order Cryoport Express
®
Solutions and receive preferred DHL shipping rates and discounts. Our proprietary logistics management operating platform, the
Cryoportal
TM
, is integrated with DHL's tracking and billing systems to provide DHL life sciences and healthcare
customers with a seamless way of accessing critical information regarding shipments of biological material worldwide.
UPS.
In October
2014, we added United Parcel Services, Inc. ("UPS") as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. Over the course of rolling out our new relationship with UPS, UPS customers
will have direct access to our cloud-based order entry and tracking portal to order Cryoport Express
®
Solutions
and gain access to UPS's broad array of domestic and international shipping and logistics solutions at competitive prices.
Our proprietary logistics management operating platform, the Cryoportal
TM
, is integrated with UPS's tracking and
billing systems to provide UPS life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.
3
These agreements with
the three largest integrators in the world, controlling more than 85% of the world's air shipments, represent a significant
validation of our solutions and the way we conduct our business.
Cryoport's Positioning
in the Life Sciences Industry
Life sciences technologies
are expected to have a significant impact on global society over the next 25 years. In the United States alone, the life sciences
industry is made up of 6,000 identifiable establishments. However, the industry is growing globally in a way where research and
manufacturing pipelines span across the globe, which increases the need to mitigate logistics risk.
The total cold chain logistics
market has historically grown 70% faster per annum than the total logistics market. For 2011, global cold chain logistics transportation
costs were reported to be $7.2 billion; about $1.5 billion within the cryogenic range of requirements. By 2017, transportation
cost alone, for global life sciences cold chain logistics, is forecasted to grow to $9.3 billion, a 41% increase, and twice the
growth of the overall market.
In addition, with the
recent advancements in the development of biologics and cell-based therapies, scientists, intermediaries, and manufacturers require
the means for cryogenically transporting their work. Temperatures must be maintained below the "glass point" (generally,
minus 136ºC) while shipping these therapies to ensure that the shipped specimens are not subject to degradation that could
impact its characteristics and efficacy.
While we estimate that
our solutions currently offer comprehensive and technology-based monitoring and tracking for a potential of six to seven million
deep frozen shipments globally on an annual basis, we also believe that with investment in our services, adaptations of our solutions
can be applied to a large portion of an additional fifty-five to sixty million annual shipments requiring ambient (between 20°
and 25°C), chilled (between 2° and 8°C) or frozen (minus 10°C or less) temperatures.
Cryoport's clients
include companies and institutions that require reliable cryogenic logistics solutions such as therapy developers for personalized
medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic laboratories, contract manufacturers, cord
blood repositories, vaccine manufacturers, animal husbandry related companies, and in-vitro fertilization clinics.
Life Sciences Agreements
Zoetis.
In December 2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal
TM
to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis' total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport's scope to manage all logistics
of Zoetis' key frozen poultry vaccine to all Zoetis' international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport's role to include the logistics management
for a second poultry vaccine.
Liventa Biosciences.
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. ("Liventa"), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport's Regenerative Medicine
Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express
®
Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport's proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa's distribution capability to orthopedic care providers.
The implementation of Cryoport's Regenerative Medicine
Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
The agreement has an initial three-year term and may be renewed for consecutive three-year terms, unless earlier terminated by
either party. Liventa also agreed to certain performance criteria and the issuance of 150,000 shares of its common stock to Cryoport
in exchange for the exclusive right to offer, market and promote Cryoport Express
®
Solutions for cellular-based
therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.
Corporate History and
Structure
The Company was originally
incorporated under the name G.T.5-Limited ("GT5") on May 25, 1990 as a Nevada Corporation. Upon completion of a Share
Exchange Agreement, on March 15, 2005 the Company changed its name to Cryoport, Inc. and acquired all of the issued and outstanding
shares of Cryoport Systems, Inc. Cryoport Systems, Inc. remains the operating company under Cryoport, Inc. At that time Cryoport
Systems, Inc. was focused on developing the Cryoport Express
®
Shipper. Over time the Company has transitioned from
being a development company to providing global cold chain logistics solutions to the biotechnology and life sciences industries.
4
Since 2011, we have validated,
perfected and expanded the features of the Cryoport Express
®
logistics solutions and have now managed shipments
of the Cryoport Express
®
Shippers through its Cryoportal
TM
into and out of more than 80 countries with
more than 20,000 shipments, handling a vast array of different biological products and specimens.
During fiscal year 2012,
the Company completed the external validation of its Cryoport Express Standard Shipper to ISTA 7E standards and introduced the
Cryoport Express
®
High Volume Shipper in response to customer demand. The Company also set up its European distribution
depot in Holland to better serve its customer base and support sales efforts in Europe.
During fiscal year 2013,
the Company elected Jerrell Shelton as President and CEO, realigned its sales team, and introduced a solutions sales and operating
strategy. In addition, and as part of its global expansion plans, the Company set up its Asian distribution depot in Singapore.
Since the beginning of
fiscal year 2014, the Company's Board of Directors ("Board") has added certain members to better align the experience
and competencies of the directors with the Company's strategic direction. In March 2013, Richard G. Rathmann, a fund manager,
investor, and advisor to life science companies over the past 20 years, was appointed to the Board.  In September 2013,
Mr. Rathmann was elected Chairman of the Board. Also in September 2013, Mr. Edward Zecchini, an executive with more than
thirty years of experience in the healthcare and information technology industries was appointed to the Board. In June 2014, Dr.
Ramkumar Mandalam was appointed to the Board. Dr. Mandalam has more than twenty years of experience in the development of biologics
and is currently the President and Chief Executive Officer of Cellerant Therapeutics, Inc., a clinical-stage biotechnology company.
Most recently, in January 2015, Richard Berman was appointed to the Board. Mr. Berman's business career consists of
more than 35 years of venture capital, management and merger and acquisitions experience. The Company's remaining Board member,
Jerrell Shelton, the President and Chief Executive Officer of Cryoport, joined the Board in October 2012. The Company's five
person Board has four independent Board members, as determined by NASDAQ Rule 5605(a)(2) and the related rules of the Securities
and Exchange Commission.
Recent Developments
Reverse Stock Split.
The Company intends to effect a reverse stock split in order to increase the stock price to a level that will enable it to
apply for listing on the NASDAQ Capital Market or other national stock exchange. No fractional shares of our common stock will
be issued as a result of the reverse stock split. In the event the proposed reverse stock split leaves a stockholder with a fraction
of a share, the number of shares due to the stockholder will be rounded up to the nearest whole share. The reverse stock split
will not be effective unless and until the board files an amendment to our certificate of incorporation. It is our intent to effect
the reverse stock split prior to the closing of this offering.
Listing on the NASDAQ
Capital Markets.
In connection with the filing of the registration statement of which this prospectus forms a part, we applied
for listing of our common stock and warrants on the NASDAQ Capital Market. After the consummation of this offering, we believe
that we will satisfy the listing requirements and expect that our common stock and warrants will be listed on the NASDAQ Capital
Market.
Service Marks, Trademarks
and Trade Names
We own, have rights to,
or have applied for the service marks and trade names that we use in conjunction with our business, including Cryoport (both alone
and with a design logo) and Cryoport Express
®
(both alone and with a design logo). All other trademarks and trade
names appearing in this prospectus are the property of their respective holders.
***
Our principal executive offices
are located on 20382 Barents Sea Circle, Lake Forest, California 92630. The telephone number of our principal executive offices
is 1.949.470.2300, and our main corporate website is www.cryoport.com. The information on, or that can be accessed through, our
website (www.cryoport.com) is not part of this prospectus.
5
THE OFFERING
Securities offered
3,409,091 shares of common stock and warrants, each consisting of one share of common stock and a warrant
to purchase one share of common stock. (1)
Common stock outstanding prior to the
offering
7,538,364 shares of common stock (2)
Common stock to be outstanding after the offering
12,666,600 shares of common stock(1) (2) (3) (4) (5)(6)
Warrants to be outstanding immediately prior to offering
8,022,740 (7)
Warrants to be outstanding immediately after this offering
13,287,340 (7) (8) (9) (10)
Use of proceeds
We expect the net proceeds to us from this offering will be approximately $13,600,000 after deducting the underwriting discount and estimated offering expenses (assuming the representative of the underwriters does not exercise its option to cover over-allotments). We intend to use those net proceeds primarily for working capital purposes to support our anticipated operations and development plans; provided that as required by the terms of certain secured promissory notes, twenty five percent (25%) of such net proceeds, up to $741,377 will be used to make required payments on such notes.  See "Use of Proceeds" for more information.
Over-allotment option
We have granted the underwriters an option for a period of 45 days to purchase, on the same terms and conditions set forth above, up to an additional 511,364 shares of common stock and warrants, consisting of 511,364 shares of our common stock and warrants to purchase 511,364 shares of our common stock, to cover over-allotments.
Description of  warrants
Each purchaser will receive a warrant to purchase one share of our common stock for each share of common stock it purchases in this offering. The warrants are exercisable at an exercise price of $4.84 per share of common stock. The warrants are exercisable starting on _______________, and expire on _______________, 2019. See "Description of the Warrants" below for more information.
OTCQB symbol
Our common stock is currently traded on the OTCQB under the symbol "CYRX."
Proposed NASDAQ Capital Market symbol for our Common Stock
"*"
Risk factors
Investing in our securities involves a high degree of risk. You should carefully read and consider the information set forth under the heading "Risk Factors" beginning on page 10 of this prospectus and all other information in this prospectus before investing in our securities.
(1)
Based on an assumed offering price of $4.40 per share of common stock and a warrant to purchase one share of common stock, the last reported sale price of our common stock on March 12, 2015 (after giving effect to the anticipated 8-to-1 reverse stock split).  The actual number of shares of common stock and warrants we will offer will be determined based on the actual public offering price.
6
(2)
Based upon the total number
        of issued and outstanding shares as of March 12, 2015, but does not include (in each case adjusted for the anticipated 8-to-1 reverse
        stock split), as of that date:
•   8,022,740
        shares of common stock reserved for issuance upon the exercise of outstanding warrants with a weighted average exercise price of
        $4.80 per share;
•   2,621,716
        shares of common stock reserved for issuance upon the exercise of outstanding stock options with a weighted average exercise price
        of $3.01 per share; and
•   343,095
        shares of common stock available for future grant under our 2009 Stock Incentive Plan and the 2011 Stock Incentive Plan.
(3)
Includes 1,719,145 shares of common stock that will be issued upon the mandatory conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon the closing of this offering.
(4)
Does not include 3,409,091 shares of common stock issuable upon the exercise of the warrants to be issued in connection with this offering.
(5)
Does not include 1,022,728 shares of common stock (including the shares of common stock underlying the warrants included as part of the shares of common stock and warrants) that comprise the shares of common stock and warrants that may be purchased by the underwriters' representative upon the exercise of its 45-day option to cover over-allotments, if any, and 136,364 shares of common stock that may be issued to Aegis Capital Corp. upon exercise of the warrant we will issue to them (representing 4% of the shares of common stock included in the shares of common stock and warrants sold by us in this offering, excluding the over-allotment option).
(6)
Does not include up to 273,065 shares of common stock and 273,065 shares of common stock issuable upon the exercise of warrants that may be issued upon the voluntary conversion of certain promissory notes as a result of this offering.
(7)
Includes outstanding warrants to purchase up to 8,022,740 shares of our common stock with a weighted average exercise price of $4.80 per share.
(8)
Includes 1,719,145 shares of common stock issuable upon the exercise of warrants that will be issued upon the mandatory conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon the closing of this offering.
(9)
Includes the warrant we will issue to Aegis Capital Corp. to purchase 136,364 shares of common stock (representing 4% of the shares of common stock included in the shares of common stock and warrants sold by us in this offering, excluding the over-allotment option), but does not include warrants to purchase 511,364 shares of common stock that may be purchased by the underwriters' representative.
(10)
Does not include up to 273,065 warrants that may be issued upon the voluntary conversion of certain promissory notes as a result of this offering.
Except as otherwise indicated,
all information in the prospectus assumes no exercise by the underwriters of their over-allotment option.
7
SUMMARY FINANCIAL INFORMATION
In the table below we
provide you with historical consolidated financial data for the nine months ended December 31, 2014 and 2013 and the fiscal years
ended March 31, 2014 and 2013, derived from our audited and unaudited consolidated financial statements included elsewhere in this
prospectus. Historical results are not necessarily indicative of the results that may be expected for any future period. When you
read this historical selected financial data, it is important that you read along with it the appropriate historical consolidated
financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" included elsewhere in this prospectus.
Nine Months Ended
Years Ended
December 31,
March 31,
Consolidated Statements of Operations Data:
2014
2013
2014
2013
In thousands, except per share data
Revenues
$
2,737
$
1,825
$
2,660
$
1,101
Cost of revenues
1,938
1,531
2,223
1,588
Gross margin (loss)
799
294
437
(487
)
Selling, general and administrative
4,431
3,768
5,106
5,412
Research and development
268
330
409
425
Loss from operations
(3,900
)
(3,804
)
(5,078
)
(6,324
)
Debt conversion expense
—
(13,714
)
(13,714
)
—
Interest expense
(1,185
)
(627
)
(784
)
(72
)
Change in fair value of derivatives
—
21
21
16
Other expense, net
(3
)
—
(8
)
—
Loss before provision for income taxes
(5,088
)
(18,124
)
(19,563
)
(6,380
)
Provision for income taxes
(2
)
—
(2
)
(2
)
Net loss
(5,090
)
(18,124
)
(19,565
)
(6,382
)
Preferred stock beneficial conversion charge
(2,961
)
—
—
—
Undeclared cumulative preferred dividends
(195
)
—
—
—
Net loss attributable to common stockholders
$
(8,246
)
$
(18,124
)
$
(19,565
)
$
(6,382
)
Net loss per share attributable to common stockholders — basic and diluted (after giving effect to 8-to-1 reverse stock split)
$
(1.10
)
$
(3.20
)
$
(3.20
)
$
(1.35
)
December 31,
March 31,
Consolidated Balance Sheets Data:
2014
2013
2014
2013
In thousands
Cash and cash equivalents
$
774
$
220
$
370
$
563
Working capital (deficit)
(1,613
)
(785
)
(2,903
)
(1,539
)
Total assets
1,867
1,651
1,710
1,756
Convertible notes and accrued interest, net
—
390
1,622
1,304
Long term obligations, less current portion
—
1,278
—
1,322
Total stockholders' equity	(deficit)
(1,118
)
(1,400
)
(2,304
)
(2,063
)
8
RISK FACTORS
An investment in
shares of our common stock and warrants involves a high degree of risk. Before making an investment decision, you should carefully
consider all of the risks described in this prospectus. If any of the risks discussed in this prospectus actually occur, our business,
financial condition, and results of operations could be materially and adversely affected. If this were to happen, the price of
our shares of common stock and warrants could decline significantly and you may lose all or a part of your investment. Our forward-looking
statements in this prospectus are subject to the following risks and uncertainties. Our actual results could differ materially
from those anticipated by our forward-looking statements as a result of the risk factors below. See "Forward-Looking Statements."
Risks Related to Our
Financial Condition
We have incurred
significant losses to date and may continue to incur losses.
We have incurred net losses
since we commenced operations. For the nine month period ended December 31, 2014, our operating loss was $3,900,000. We have incurred
net losses in each fiscal year. The following table represents net losses incurred for each of our last two fiscal years:
Net Loss
Fiscal Year Ended March 31, 2014
$
19,565,400
Fiscal Year Ended March 31, 2013
$
6,382,400
Our fiscal year ended
March 31, 2014 net loss of $19,565,400 included a one-time non-cash loss of $13,713,800 as a result of an induced debt conversion
expense as described in Management's Discussion and Analysis of Financial Condition and Results of Operations under the "Results
of Operations for Fiscal 2014 Compared to Fiscal 2013" section. As of December 31, 2014, we had an accumulated deficit of
$93.9 million. These losses have had, and likely will continue to have, an adverse effect on our working capital, assets, and equity.
In order to achieve and sustain such revenue growth in the future, we must significantly expand our market presence and revenues
from existing and new customers. We may continue to incur losses in the future and may never generate revenues sufficient to become
profitable or to sustain profitability. Continuing losses may impair our ability to raise the additional capital required to continue
and expand our operations.
The repayment
of certain promissory notes is secured by a security interest in all of our assets.
The Company has issued
2014 Series Secured Promissory Notes in the aggregate original principal amount of $915,000 (the "7% Bridge Notes"),
of which $741,377 was outstanding as of March 12, 2015. The notes are secured by all tangible assets of the Company.
All principal and interest
under the Notes will be due on July 1, 2015; however, the Company may elect to extend the maturity date of the Notes to January
1, 2016 by providing written notice to the Investors and a warrant to purchase a number of shares of the Company's common
stock equal to (a) the then outstanding principal balance of the Note, divided by $0.50 and (b) multiplied by 125%. The Company
may prepay the Notes at any time without penalty and shall prepay the Notes in an amount equal to 25% of the net cash proceeds
received by the Company during each month from the issuance of either debt or equity.
If we default in the repayment
of the notes and/or any of the terms and conditions thereof the holders of such notes may enforce their security interest over
our assets which secure the repayment of such note, and we could be forced to curtail or abandon our current business plans and
operations. If that were to happen, the Company's securities could have no value.
Our auditors
have expressed doubt about our ability to continue as a going concern.
The Report of Independent
Registered Public Accounting Firm to our March 31, 2014 consolidated financial statements includes an explanatory paragraph
stating that the recurring losses and negative cash flows from operations since inception and our cash and cash equivalents balance
at March 31, 2014 raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to establish to the satisfaction
of our independent registered public accounting firm that the net proceeds from this offering will be sufficient, based on our
projected cash flows, to allow for the removal of this "going concern" qualification, we will not be able to obtain
approval of our NASDAQ listing application.
9
If we are unable
to obtain additional funding, we may have to reduce or discontinue our business operations.
As of December 31, 2014,
we had cash and cash equivalents of $773,900. Therefore, our ability to continue and expand our operations is highly dependent
on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to fund future operations.
We anticipate, based on
currently proposed plans and assumptions relating to our ability to market and sell our products, that our cash on hand and the
proceeds from this offering, together with projected cash flows, will satisfy our operational and capital requirements for the
next 18 to 24 months. There are a number of uncertainties associated with our financial projections that could reduce or delay
our future projected revenues and cash-inflows, including, but not limited to, our ability to increase our customer base and revenues.
If our projected revenues and cash-inflows are reduced or delayed, we may not have sufficient capital to operate through the next
18 to 24 months unless we raise more capital. Additionally, if we are unable to realize satisfactory revenue in the near future,
we will be required to seek additional financing to continue our operations beyond that period. We will also require additional
financing to expand into other markets and further develop and market our products. Except for the shares of common stock and warrants
to be offered in this offering, we have no current arrangements with respect to any additional financing. Consequently, there can
be no assurance that any additional financing on commercially reasonable terms, or at all, will be available when needed. The inability
to obtain additional capital may reduce our ability to continue to conduct business operations. Any additional equity financing
may involve substantial dilution to our then existing stockholders. The uncertainties surrounding our future cash inflows have
raised substantial doubt regarding our ability to continue as a going concern.
Risks Related to Our
Business
Our agreements
with global providers of shipping services may not result in a significant increase in our revenues or cash flow, soon or in the
future.
We believe that establishing
strategic alliances with global providers (integrators) of logistics and of shipping services, such as our agreements with FedEx,
DHL, and UPS can drive growth in our revenues, but there is no certainty to this view. We are seeking to establish similar arrangements
with other providers of international shipping services. We anticipate all such alliances will enable us to provide seamless, end-to-end
shipping solutions to customers of our respective alliance partners and allow us to leverage the established relationships with
those customers, but there is no guarantee this will happen.
In January 2013, we entered
into an agreement with FedEx, renewing FedEx's right to, on a non-exclusive basis, promote, market and sell transportation
of our shippers and our related value-added goods and services and providing FedEx with a non-exclusive license and right to use
a customized version of our Cryoportal™ software platform for the management of shipments made by FedEx customers. In June
2014, we added DHL as our second major distribution partner, whereby DHL can offer our validated and comprehensive cryogenic solutions
to its life sciences and healthcare customers on a global basis. In October 2014, we entered into an agreement with UPS related
to our participation in UPS's efforts to expand its provision of cryogenic shipping services to the life sciences industry.
Because our agreements
with FedEx, DHL, and UPS do not contain any requirement that they use a minimum level of our services, there can be no assurance
of any significant increase in our revenues or cash flows as a result of these strategic alliances.
Our agreements
with providers of vaccines and stem cell-based therapies may not result in a significant increase in our revenues or cash flow.
We believe that establishing
strategic relationships with manufacturers and distributors of treatments for animals and humans, such as our agreements with Zoetis,
Inc. and Liventa Bioscience, Inc., can drive growth in our revenues.
In December 2012, we entered
an agreement with what became Zoetis, Inc. (in January 2013, Pfizer spun off its animal health business into Zoetis, Inc., a public
company) pursuant to which we were engaged to manage frozen shipments of a key poultry vaccine from Zoetis' production site
in the United States. Over time, Zoetis has further expanded our role in providing them assistance in managing their cryogenic
distribution of their vaccines and has become our largest customer.
In February 2014, we entered
into an agreement with Liventa Bioscience, Inc. ("Liventa") to act as its exclusive provider of cryogenic logistics
of stem cell based therapies for orthopedic applications based on meeting minimum performance requirements over specified time
periods. Liventa intends to distribute its own line of therapies and to act as a distributor of other therapies to orthopedic health
care providers that require controlled cryogenic temperatures. There is no assurance if or when Liventa will begin significant
use of our services.
10
While we anticipate growth
in shipments by Zoetis under our management and that Liventa will be successful in its efforts to distribute cell based biologic
materials to the orthopedic market, there can be no assurance of any significant increase in our revenues or cash flows as a result
of these important alliances.
We will have
difficulty increasing our revenues if we experience delays, difficulties or unanticipated costs in establishing the sales, distribution
and marketing capabilities necessary to successfully commercialize our solutions.
We plan to improve our
sales, distribution, and marketing capabilities in the Americas, Europe, and Asia. It will be expensive and time-consuming for
us to develop our global marketing and sales network and thus we intend to rely on our strategic alliances with FedEx, DHL, and
UPS. We further intend to seek to enter into additional strategic alliances with international providers of shipping services to
incorporate use of our solutions in their service offerings. We may not be able to provide adequate incentive to our sales force
or to establish and maintain favorable distribution and marketing collaborations with others to promote our solutions. In addition,
any third party with whom we have established a marketing and distribution relationship may not devote sufficient time to the marketing
and sales of our solutions, thereby exposing us to potential expenses in exiting such distribution agreements. We, and any of our
alliance partners, must also market our services in compliance with federal, state, local and international laws relating to the
provision of incentives and inducements. Violation of these laws can result in substantial penalties. Therefore, if we are unable
to successfully motivate and expand our marketing and sales force and further develop our sales and marketing capabilities, or
if our alliance partners fail to promote our solutions, we will have difficulty increasing our revenues and the revenue may not
off-set the additional expense of expansion.
Our ability to
grow and compete in our industry will be hampered if we are unable to retain the continued service of our key professionals or
to identify, hire and retain additional qualified professionals.
A critical factor to our
business is our ability to attract and retain qualified professionals including key employees and consultants. We are continually
at risk of losing current professionals or being unable to hire additional professionals as needed. If we are unable to attract
new qualified employees, our ability to grow will be adversely affected. If we are unable to retain current employees or strategic
consultants, our financial condition and ability to maintain operations may be adversely affected.
Sustainable future
revenue growth is dependent on new solutions and services.
Our future revenue streams
depend to a large degree on our ability to bring new solutions and services to an evolving market on a timely basis. We must continue
to make investments in research and development in order to continue to develop new solutions and services, enhance existing solutions
and services, and achieve market acceptance of such solutions and services. We may incur problems in introducing new solutions
and services.
The adoption
cycle of our target customers tends to be very lengthy, which continues to adversely affect our ability to increase revenues quickly.
We offer our solutions
primarily to companies in the life sciences industry. These companies operate within a heavily regulated environment and as such,
changing vendors and distribution practices typically requires a number of steps, which may include the audit of our facilities,
review of our procedures, qualifying us as a vendor, and performing test shipments. This process can take several months or longer
to complete, involving multiple levels of approval, prior to a company fully adopting our Cryoport Express
®
Solutions.
Moreover, the logistics management of many companies is decentralized, adding to the time needed to effect adaptation of our solutions.
In addition, any such adoption may be on a gradual basis, such that the customer progressively ramps up use of our Cryoport Express
®
Solutions following adoption. The slow adoption process continues to adversely affect our ability to increase revenues.
11
The loss of key
members of our executive management team could adversely affect our business.
Our
success in implementing our business strategy depends largely on the skills, experience and performance of key members of our executive
management team and others in key management positions. The collective efforts of each of these persons working as a team will
be critical to us as we continue to develop our technologies, tests and research and development and sales programs. As a result
of the difficulty in locating qualified new management, the loss or incapacity of existing members of our executive management
team could adversely affect our operations. If we were to lose one or more of these key employees, we could experience difficulties
in finding qualified successors, competing effectively, developing our technologies and implementing our business strategy. We
do not maintain "key person" insurance on any of our employees.
Our solutions
and services may contain errors or defects, which could result in damage to our reputation, lost revenues, diverted development
resources and increased service costs and litigation.
Our solutions and services
must meet stringent requirements and we must develop our services and solutions quickly to keep pace with the rapidly changing
market. Solutions as sophisticated as ours could contain undetected errors or defects, especially when first introduced or when
new equipment or versions of our software are released. If our solutions are not free from errors or defects, we may incur an injury
to our reputation, lost revenues, diverted development resources, increased customer service and support costs, and litigation.
The costs incurred in correcting any product errors or defects may be substantial and could adversely affect our business, results
of operations and financial condition.
If we were sued
for product liability, we could face substantial liabilities that exceed our resources.
The
marketing, sale and use of our products could lead to the filing of product liability claims were someone to allege that our products
failed to perform as designed. A product liability claim could result in substantial damages and be costly and time-consuming for
us to defend.
Although
we believe that our existing insurance is adequate, our insurers may fail to defend us or our insurance may not fully protect us
from the financial impact of defending against product liability claims. Any product liability claim brought against us, with or
without merit, could increase our insurance rates or prevent us from securing insurance coverage in the future. Additionally, any
product liability lawsuit could damage our reputation, or cause current clinical partners and collaborators to terminate existing
agreements and potential clinical partners to seek other partners, cause customers to terminate their relationship with us and
potential customers to seek alternative solutions, any of which could impact our results of operations.
If we experience
manufacturing delays, interruptions in production, or delays in procurement of shippers manufactured by third parties, then we
may experience customer dissatisfaction and our reputation could suffer.
If we fail to produce
enough shippers at our own manufacturing facility or at a third party manufacturing facility, or if we fail to complete our shipper
recycling processes as planned, we may be unable to deliver shippers to our customers on a timely basis, which could lead to customer
dissatisfaction and could harm our reputation and ability to compete. We currently acquire various component parts for our shippers
from various independent manufacturers in the United States. We would likely experience significant delays or cessation in producing
our shippers if a labor strike, natural disaster or other supply disruption were to occur at any of our main suppliers. If we are
unable to procure a component from one of our manufacturers, we may be required to enter into arrangements with one or more alternative
manufacturing companies, which may cause delays in producing our shippers. In addition, because we depend (in part) on third party
manufacturers, our profit margins may be lower, which will make it more difficult for us to achieve profitability. To date, we
have not experienced any material delay that has adversely impacted our operations. As our business develops, it becomes more likely
that such problems could arise.
We expect to
base our equipment and inventory purchasing decisions on our forecasts of customers' demand, and if our forecasts are inaccurate,
our operating results could be materially harmed.
As
our customer base increases, we expect to need to purchase additional equipment and inventory. Our forecasts will be based on multiple
assumptions, each of which may cause our estimates to be inaccurate, affecting our ability to provide products to our customers.
When demand for our products increases significantly, we may not be able to meet demand on a timely basis, and we may need to expend
a significant amount of time working with our customers to allocate limited supply and maintain positive customer relations, or
we may incur additional costs in order to rush the manufacture and delivery of additional products. If we underestimate customers'
demand, we may forego revenue opportunities, lose market share and damage our customer relationships. Conversely, if we overestimate
customer demand, we may purchase more equipment and inventory than we are able to use or sell at any given time or at all. As a
result of our failure properly to estimate demand for our products, we could have excess or obsolete equipment and/or inventory,
resulting in a decline in the value of our equipment and/or inventory, which would increase our costs of revenues and reduce our
liquidity. Our failure to accurately manage our equipment purchases and inventory relative to demand would adversely affect our
operating results.
12
If we experience
delays or interruption in shipping due to factors outside of our control, such disruption could lead to customer dissatisfaction
and harm our reputation.
We rely on third party
shipment and carrier services to transport our shippers containing biological material. These third party operations could be subject
to natural disasters, adverse weather conditions, other business disruptions, and carrier error, which could cause delays in the
delivery of our shippers, which in turn could cause serious harm to the biological material being shipped. As a result, any prolonged
delay in shipment, whether due to technical difficulties, power failures, break-ins, destruction or damage to carrier facilities
as a result of a natural disaster, fire, or any other reason, could result in damage to the contents of the shipper. If we are
unable to cause the delivery of our shippers in a timely matter and without damage, this could also harm our operating results
and our reputation, even if we are not at fault.
Our solutions
and services may expose us to liability in excess of our current insurance coverage.
Our solutions and services
involve significant risks of liability, which may substantially exceed the revenues we derive from them. We cannot predict the
magnitude of these potential liabilities. We currently maintain general liability insurance, with coverage in the amount of $1
million per occurrence, subject to a $2 million annual limitation, and product liability insurance with a $1 million annual coverage
limitation. Claims may be made against us that exceed these limits.
Our liability policy is
an "occurrence" based policy. Thus, our policy was complete when we purchased it and following cancellation of the
policy, it will continue to provide coverage for future claims based on conduct that took place during the policy term. Our insurance
coverage, however, may not protect us against all liability because our policies typically have various exceptions to the claims
covered and also require us to assume some costs of the claim, even though a portion of the claim may be covered. In addition,
if we expand into new markets, we may not be aware of the need for, or be able to obtain insurance coverage for such activities
or, if insurance is obtained, the dollar amount of any liabilities incurred could exceed our insurance coverage. A partially or
completely uninsured claim, if successful and of significant magnitude, could have a material adverse effect on our business, financial
condition and results of operations.
If we use biological
and hazardous materials in a manner that causes injury, we could be liable for damages.
Our customers may ship
potentially harmful biological materials in our dewars. We cannot eliminate the risk of accidental contamination or injury to employees
or third parties from the use, storage, handling or disposal of these materials. In the event of contamination or injury, we could
be held liable for any resulting damages, and any liability could exceed our resources or any applicable insurance coverage we
may have. Additionally, we are subject to, on an ongoing basis, federal, state and local laws and regulations governing the use,
storage, handling and disposal of these materials and specified waste products. In the event of an accident, we could be held liable
for damages.
If we cannot
compete effectively, we will lose business.
Our services and solutions
are positioned to be competitive in the life sciences cold-chain logistics market. While there are technological and marketing
barriers to entry, we cannot guarantee that the barriers we are capable of producing will be sufficient to defend the market share
we wish to gain against current and future competitors. Our principal competitive considerations in our market include:
·
financial resources to allocate to proper marketing and an appropriate sales effort,
·
acceptance of our solutions model,
·
acceptance of our solutions including per use fee structures and other charges for services,
·
keeping up technologically with ongoing development of enhanced features and benefits,
·
reductions in the delivery costs of competitors' solutions,
·
the ability to develop and maintain and expand strategic alliances,
·
establishing our brand name,
·
our ability to deliver our solutions to our customers when requested,
13
·
our timing of introductions of new solutions and services, and
·
financial resources to support working capital needs and required capital investments in infrastructure.
Current and prospective
competitors have substantially greater resources, more customers, longer operating histories, greater name recognition and more
established relationships in the industry. As a result, these competitors may be able to develop and expand their networks and
product offerings more quickly, devote greater resources to the marketing and sale of their solutions and adopt more aggressive
pricing policies. In addition, these competitors have entered and will likely continue to enter into business relationships to
provide additional solutions competitive to those we provide or plan to provide.
We may acquire other
businesses, products or technologies in order to remain competitive in our market and our business could be adversely affected
as a result of any of these future acquisitions.
We may make acquisitions
of complementary businesses, products or technologies. If we identify any appropriate acquisition candidates, we may not be successful
in negotiating acceptable terms of the acquisition, financing the acquisition, or integrating the acquired business, products or
technologies into our existing business and operations. Further, completing an acquisition and integrating an acquired business
will significantly divert management time and resources. The diversion of management attention and any difficulties encountered
in the transition and integration process could harm our business. If we consummate any significant acquisitions using stock or
other securities as consideration, our shareholders' equity could be significantly diluted. If we make any significant acquisitions
using cash consideration, we may be required to use a substantial portion of our available cash. Acquisition financing may not
be available on favorable terms, if at all. In addition, we may be required to amortize significant amounts of other intangible
assets in connection with future acquisitions, which would harm our operating results and financial condition.
If we successfully
develop products and/or services, but those products and/or services do not achieve and maintain market acceptance, our business
will not be profitable.
The degree of acceptance
of our Cryoport Express
®
Solutions or any future products or services by our current target markets, and any other
markets to which we attempt to sell our products and services, and our profitability and growth will depend on a number of factors
including, among others:
·
our shippers' ability to perform and preserve the integrity of the materials shipped,
·
relative convenience and ease of use of our shipper and/or Cryoportal
TM
,
·
availability of alternative products,
·
pricing and cost effectiveness,
·
effectiveness of our or our collaborators' sales and marketing strategy, and
·
the adoption cycles of our targeted customers.
If any products or services
we may develop do not achieve market acceptance, then we may not generate sufficient revenue to achieve or maintain profitability.
In addition, even if our
products and services achieve market acceptance, we may not be able to maintain that market acceptance over time if new products
or services are introduced that are more favorably received than our products and services, are more cost effective, or render
our products obsolete. Although we are not aware of any other treatments or methods currently being developed that would directly
compete with the methods we employ, there can be no assurance that future developments in technology will not make our technology
non-competitive or obsolete, or significantly reduce our operating margins or the demand for our offerings, or otherwise negatively
impact our ability to be profitable.
14
We may not be
able to compete with our competitors in the industry because many of them have greater resources than we do.
We expect to continue
to experience significant and increasing levels of competition in the future. In addition, there may be other companies which are
currently developing competitive products and services or which may in the future develop technologies and products that are comparable,
superior or less costly than our own. For example, some cryogenic equipment manufacturers with greater resources currently have
solutions for storing and transporting cryogenic liquid and gases and may develop storage solutions that compete with our products.
Additionally, some specialty couriers with greater resources currently provide dry ice transportation and may develop other products
in the future, both of which compete with our products. A competitor that has greater resources than us may be able to bring its
product to market faster than we can and offer its product at a lower price than us to establish market share. We may not be able
to successfully compete with a competitor that has greater resources and such competition may adversely affect our business.
Intellectual Property
Risks Associated with Our Business
Our success depends,
in part, on our ability to obtain patent protection for our solutions and business model, preserve our trade secrets, and operate
without infringing the proprietary rights of others.
Our policy is to seek
to protect our proprietary position by, among other methods, filing United States patent applications related to our technology,
inventions and improvements that are important to the development of our business. We have three issued U.S. patents, one pending
U.S. patent application, and one recently filed U.S. provisional patent application, all relating to various aspects of our solutions
and services. Our patents or patent application may be challenged, invalidated or circumvented in the future or the rights granted
may not provide a competitive advantage. We intend to vigorously protect and defend our intellectual property. Costly and time-consuming
litigation brought by us may be necessary to enforce our patents and to protect our trade secrets and know-how, or to determine
the enforceability, scope and validity of the proprietary rights of others.
We also rely upon trade
secrets, technical know-how and continuing technological innovation to develop and maintain our competitive position. In the past
our employees, consultants, advisors and suppliers have not always executed confidentiality agreements and inventions assignment
and work for hire agreements in connection with their employment, consulting, or advisory relationships. Consequently, we may not
have adequate remedies available to us to protect our intellectual property should one of these parties attempt to use our trade
secrets or refuse to assign any rights he or she may have in any intellectual property he or she developed for us. Additionally,
our competitors may independently develop substantially equivalent proprietary information and techniques or otherwise gain access
to our proprietary technology, or we may not be able to meaningfully protect our rights in unpatented proprietary technology.
While we are not aware
of any third party that is infringing any of our patents or trademarks nor do we believe that we are infringing on the patents
or trademarks of any other person or organization, we cannot guarantee that our current and potential competitors and other third
parties have not filed (or in the future will not file) patent applications for (or have not received or in the future will not
receive) patents or obtain additional proprietary rights that will prevent, limit or interfere with our ability to make, use or
sell our solutions either in the United States or internationally. Additionally, we may face assertions of claims by holders of
patents alleging that we are infringing upon their patent rights, which claims may be without merit, but may nonetheless result
in our incurring substantial costs of defense.
We are dependent
on a third party for the continued development and maintenance of our Cryoportal™
software.
Our proprietary Cryoportal™
is a logistics platform software used by our customers, business partners and client care team to automate the entry of orders,
prepare customs documentation and facilitate status and location monitoring of shipped orders while in transit. The continued development
of the Cryoportal™ platform is contracted with an outside software development company. If this developer becomes unable
or unwilling to continue work on scheduled projects, and an alternative software development company cannot be secured, we may
not be able to implement needed enhancements to the system. Furthermore, if we terminate our agreement with our current software
developer and cannot reach an agreement or fail to fulfill an agreement for the termination, it is possible we could lose our license
to use this software. Failure to proceed with enhancements or the loss of our license for the system would adversely affect our
ability to generate new business and serve existing customers, resulting in a reduction in revenue.
Our customers could
also become the target of litigation relating to the patent and other intellectual property rights of others.
Any litigation relating
to the intellectual property rights of others could trigger technical support and indemnification obligations in licenses or customer
agreements that we may enter into. These obligations could result in substantial expenses, including the payment by us of costs
and damages relating to claims of intellectual property infringement. In addition to the time and expense required for us to provide
support or indemnification to our customers, any such litigation could disrupt the businesses of our customers, which in turn could
hurt our relationships with such customers and cause the sale of our products to decrease. No assurance can be given that claims
for indemnification will not be made, or that if made, such claims would not have a material adverse effect on our business, operating
results or financial conditions.
15
Our Cryoportal™
software platform may be subject to intentional disruption that could adversely impact our reputation and future revenues.
We have implemented our
Cryoportal™ software platform which is used by our customers and business partners to automate the entry of orders, prepare
customs documentation and facilitate status and location monitoring of shipped orders while in transit. Although we believe we
have sufficient controls in place to prevent intentional disruptions, we could be a target of cyber-attacks specifically designed
to impede the performance of the Cryoportal™
software platform. Similarly, experienced computer programmers may
attempt to penetrate our Cryoportal™ software platform in an effort to search for and misappropriate proprietary or confidential
information or cause interruptions of our services. Because the techniques used by such computer programmers to access or sabotage
networks change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques.
Our activities could be adversely affected and our reputation, brand and future sales could be harmed if such intentionally disruptive
efforts were successful.
Regulatory Risks Relating
to Our Business
Complying with
certain regulations that apply to shipments using our solutions can limit our activities and increase our cost of operations.
Shipments using our solutions
and services are subject to various regulations in the various countries in which we operate. For example, shipments using our
solutions may be required to comply with the shipping requirements promulgated by the Centers for Disease Control ("CDC"),
the Occupational Safety and Health Organization ("OSHA"), the Department of Transportation ("DOT") as well
as rules established by the IATA and the ICAO. Additionally, our data logger may be subject to regulation and certification by
the Food and Drug Administration ("FDA"), Federal Communications Commission ("FCC"), and the Federal Aviation
Administration ("FAA"). We will need to ensure that our solutions and services comply with relevant rules and regulations
to make our solutions and services marketable, and in some cases compliance is difficult to determine. Significant changes in such
regulations could require costly changes to our solutions and services or prevent use of our shippers for an extended period of
time while we seek to comply with changed regulations. If we are unable to comply with any of these rules or regulations or fail
to obtain any required approvals, our ability to market our solutions and services may be adversely affected. In addition, even
if we are able to comply with these rules and regulations, compliance can result in increased costs. In either event, our financial
results and condition may be adversely affected. We depend on our business partners and unrelated and frequently unknown third
party agents in foreign countries to act on our behalf to complete the importation process and to make delivery of our shippers
to the final user. The failure of these third parties to perform their duties could result in damage to the contents of the shipper
resulting in customer dissatisfaction or liability to us, even if we are not at fault.
Risks Relating to Our
Current Financing Arrangements
Certain of our
existing stockholders own and have the right to acquire a substantial number of shares of common stock.
As of March 12, 2015,
our directors, executive officers and beneficial owners of 5% or more of our outstanding common stock beneficially owned 1,737,017
shares of common stock (without regard to beneficial ownership limitations contained in certain warrants) assuming their exercise
of all outstanding preferred stock, warrants and options that are exercisable within 60 days of March 12, 2015 or approximately
19.4% of our outstanding common stock. Of these shares of common stock, 431,204 shares, or approximately 5.4% of our common
stock, will be beneficially owned by Cranshire Capital Master Fund. As such, the concentration of beneficial ownership of our common
stock may have the effect of delaying or preventing a change in control of Cryoport and may adversely affect the voting or other
rights of other holders of our common stock.
The sale of substantial
shares of our common stock may depress our stock price.
As of December 31, 2014
there were 7,507,231 shares of our common stock outstanding. Substantially all of these shares of common stock are eligible for
trading in the public market. The market price of our common stock may decline if our stockholders sell a large number of shares
of our common stock in the public market, or the market perceives that such sales may occur.
We could also issue up
to 13,086,586 shares of our common stock, including shares to be issued upon the conversion of outstanding preferred stock,
exercise of outstanding warrants and options, or reserved for future issuance under our stock incentive plans, as further described
in the following table:
16
Number of
Shares of
Common Stock
Issuable or
Reserved for
Issuance
Common stock issuable upon conversion of outstanding preferred stock
1,660,830
Common stock issuable upon exercise of outstanding warrants
8,397,894
Common stock issuable upon exercise of outstanding options or reserved for future incentive awards under our stock incentive plans
3,027,862
Total
13,086,586
Of the total options and
warrants outstanding as of December 31, 2014 options and warrants exercisable for an aggregate of 1,178,801 shares of common stock
would be considered dilutive to the value of our stockholders' interest in Cryoport because we would receive upon exercise
of such options and warrants an amount per share that is less than the market price of our common stock on December 31, 2014.
If equity research
analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our common
stock and warrants, the price of our common stock and warrants could decline.
The trading market for
our common stock and warrants relies in part on the research and reports that equity research analysts publish about us and our
business. We do not control these analysts. The price of our common stock and warrants could decline if one or more equity analyst
downgrades our stock or if analysts downgrade our stock or issue other unfavorable commentary or cease publishing reports about
us or our business.
We have not paid
dividends on our common stock in the past and do not expect to pay dividends in the foreseeable future. Any return on investment
may be limited to the value of our common stock.
We have never paid cash
dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. The payment of dividends on
our common stock will depend on our earnings, financial condition and other business and economic factors affecting us at such
time as the Board of Directors may consider the payment of any such dividends. If we do not pay dividends, our common stock may
be less valuable because a return on your investment will only occur if the price of our common stock appreciates.
We need additional
capital, and the sale of additional shares of common stock or other equity securities could result in additional dilution to our
stockholders.
Our current cash and cash
equivalents and anticipated cash flow from operations are insufficient to meet our cash needs. We require additional cash resources
to fund our operations and may require additional funds in the future due to changed business conditions or other future developments,
including any investments or acquisitions we may decide to pursue. The sale of additional equity securities, or debt securities
convertible into equity securities, could result in additional dilution to our stockholders. The incurrence of indebtedness would
result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations.
Our Articles
of Incorporation allow our Board of Directors to issue up to 2,500,000 shares of "blank check" preferred stock.
Our Articles of Incorporation
allows our Board of Directors to issue up to 2,500,000 shares of "blank check" preferred stock, without action by our
stockholders. We have designated 800,000 shares as Class A Preferred Stock, of which 454,750 shares are issued and outstanding
at March 12, 2015, and 400,000 shares as Class B Preferred Stock, of which 26,134 shares are issued and outstanding at March 12,
2015. Accordingly, the Board of Directors will have discretion to issue up to 1,300,000 shares on terms determined by them. Without
limiting the foregoing, (i) such shares of preferred stock could have liquidation rights that are senior to the liquidation preference
applicable to our common stock and Preferred Stock, (ii) such shares of preferred stock could have voting or conversion rights,
which could adversely affect the voting power of the holders of our common stock and Preferred Stock and (iii) the ownership interest
of holders of our common stock will be diluted following the issuance of any such shares of preferred stock. In addition, the issuance
of such shares of blank check preferred stock could have the effect of discouraging, delaying or preventing a change of control
of our Company.
17
Provisions in
our bylaws and Nevada law might discourage, delay or prevent a change of control of our Company or changes in our management and,
as a result, may depress the trading price of our common stock.
Provisions of our bylaws
and Nevada law may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider
favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. The relevant
bylaw provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions
include advance notice requirements for stockholder proposals and nominations, and the ability of our Board of Directors to make,
alter or repeal our bylaws.
Absent approval of our
Board of Directors, our bylaws may only be amended or repealed by the affirmative vote of the holders of at least a majority of
our outstanding shares of capital stock entitled to vote.
In addition, Section 78.438
of the Nevada Revised Statutes prohibits a publicly-held Nevada corporation from engaging in a business combination with an interested
stockholder (generally defined as a person which together with its affiliates owns, or within the last three years has owned, 10%
of our voting stock, for a period of two years after the date of the transaction in which the person became an interested stockholder)
unless the business combination is approved in a prescribed manner.
The existence of the foregoing
provisions and other potential anti-takeover measures could limit the price that investors might be willing to pay in the future
for shares of our common stock. They could also deter potential acquirers of our Company, thereby reducing the likelihood that
you could receive a premium for your common stock in an acquisition.
Even though we
are not incorporated in California, we may become subject to a number of provisions of the California General Corporation Law.
Section 2115(b) of
the California Corporations Code imposes certain requirements of California corporate law on corporations organized outside California
that, in general, are doing more than 50% of their business in California and have more than 50% of their outstanding voting securities
held of record by persons residing in California. While we are not currently subject to Section 2115(b), we may become subject
to it in the future.
The following summarizes
some of the principal differences which would apply if we become subject to Section 2115(b).
Under both Nevada and
California law, cumulative voting for the election of directors is permitted. However, under Nevada law, cumulative voting must
be expressly authorized in the Articles of Incorporation and our Amended and Restated Articles of Incorporation do not authorize
cumulative voting. If we become subject to Section 2115(b), we may be required to permit cumulative voting if any stockholder
properly requests to cumulate his or her votes.
Under Nevada law, the
stockholders may remove directors by the vote of two-thirds of the voting power of the issued and outstanding stock entitled to
vote. However, California law permits the removal of directors by the vote of only a majority of the outstanding shares entitled
to vote. If we become subject to Section 2115(b), the removal of a director may be accomplished by a majority vote, rather
than a vote of two-thirds, of the stockholders entitled to vote.
Under California law,
the corporation must take certain steps to be allowed to provide for greater indemnification of its officers and directors than
is provided in the California Corporation Code. If we become subject to Section 2115(b), our ability to indemnify our officers
and directors, to the extent permitted in our Articles of Incorporation, Bylaws and under Nevada law, may be limited by California
law.
Nevada law permits distributions
to stockholders as long as, after the distribution, (i) the corporation would be able to pay its debts as they become due
and (ii) the corporation's total assets are at least equal to its liabilities and preferential dissolution obligations.
Under California law, distributions may be made to stockholders as long as the corporation would be able to pay its debts as they
mature and either (i) the corporation's retained earnings equal or exceed the amount of the proposed distributions,
or (ii) after the distributions, the corporation's tangible assets are at least 125% of its liabilities and the corporation's
current assets are at least equal to its current liabilities (or, 125% of its current liabilities if the corporation's average
operating income for the two most recently completed fiscal years was less than the average of the interest expense of the corporation
for those fiscal years). If we become subject to Section 2115(b), we will have to satisfy more stringent financial requirements
to be able to pay dividends to our stockholders. Additionally, stockholders may be liable to the corporation if we pay dividends
in violation of California law.
California law permits
a corporation to provide "supermajority vote" provisions in its Articles of Incorporation, which would require specific
actions to obtain greater than a majority of the votes, but not more than 66
2
/
3
percent. Nevada law does
not permit supermajority vote provisions. If we become subject to Section 2115(b), it is possible that our stockholders would
vote to amend our Articles of Incorporation and require a supermajority vote for us to take specific actions.
18
Under California law,
in a disposition of substantially of all the corporation's assets, if the acquiring party is in control of or under common
control with the disposing corporation, the principal terms of the sale must be approved by 90 percent of the stockholders. Although
Nevada law does contain certain rules governing interested stockholder business combinations, it does not require similar stockholder
approval. If we become subject to Section 2115(b), we may have to obtain the vote of a greater percentage of the stockholders
to approve a sale of our assets to a party that is in control of, or under common control with, us.
California law places
certain additional approval rights in connection with a merger if all of the shares of each class or series of a corporation are
not treated equally or if the surviving or parent party to a merger represents more than 50 percent of the voting power of the
other corporation prior to the merger. Nevada law does not require such approval. If we become subject to Section 2115(b),
we may have to obtain the vote of a greater percentage of the stockholders to approve a merger that treats shares of a class or
series differently or where a surviving or parent party to the merger represents more than 50% of the voting power of the other
corporation prior to the merger.
California law requires
the vote of each class to approve a reorganization or a conversion of a corporation into another entity. Nevada law does not require
a separate vote for each class. If we become subject to Section 2115(b), we may have to obtain the approval of each class
if we desire to reorganize or convert into another type of entity.
California law provides
greater dissenters' rights to stockholders than Nevada law. If we become subject to Section 2115(b), more stockholders
may be entitled to dissenters' rights, which may limit our ability to merge with another entity or reorganize.
Our stock is
deemed to be penny stock.
Our stock is currently
traded on the OTCQB, operated by the OTC Markets Group, Inc., and is subject to the "penny stock rules" adopted pursuant
to Section 15(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The penny stock rules apply
to companies not listed on a national exchange whose common stock trades at less than $5.00 per share or which have tangible net
worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). Such rules require, among
other things, that brokers who trade "penny stock" to persons other than "established customers" complete
certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading
in the security, including a risk disclosure document and quote information under certain circumstances. Penny stocks sold in violation
of the applicable rules may entitle the buyer of the stock to rescind the sale and receive a full refund from the broker.
Many brokers have decided
not to trade "penny stock" because of the requirements of the penny stock rules and, as a result, the number of broker-dealers
willing to act as market makers in such securities is limited. In the event that we remain subject to the "penny stock rules"
for any significant period, there may develop an adverse impact on the market, if any, for our securities. Because our securities
are subject to the "penny stock rules," investors will find it more difficult to dispose of our securities. Further,
for companies whose securities are traded on the OTCQB, it is more difficult: (i) to obtain accurate quotations, (ii)
to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not
publish press releases about such companies, and (iii) to obtain needed capital.
If we fail to
maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial
results, and current and potential stockholders may lose confidence in our financial reporting.
We are required by the
SEC to establish and maintain adequate internal control over financial reporting that provides reasonable assurance regarding the
reliability of our financial reporting and the preparation of financial statements in accordance with generally accepted accounting
principles. We are likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose
any changes and material weaknesses in those internal controls.
Any failure to maintain
such internal controls in the future could adversely impact our ability to report our financial results on a timely and accurate
basis. If our financial statements are not accurate, investors may not have a complete understanding of our operations. Likewise,
if our financial statements are not filed on a timely basis as required by the SEC and the OTCQB, we could face severe
consequences from those authorities. In either case, there could result a material adverse effect on our business. Inferior internal
controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect
on the trading price of our stock.
19
Our publicly-filed
SEC reports are reviewed by the SEC from time to time and any significant changes required as a result of any such review may result
in material liability to us and have a material adverse impact on the trading price of our common stock.
The reports of publicly-traded
companies are subject to review by the SEC from time to time for the purpose of assisting companies in complying with applicable
disclosure requirements and to enhance the overall effectiveness of companies' public filings, and reviews of such reports
are now required at least every three years under the Sarbanes-Oxley Act of 2002. SEC reviews may be initiated at any time, and
we could be required to modify or reformulate information contained in prior filings as a result of an SEC review. Any modification
or reformulation of information contained in such reports could be significant and could result in material liability to us and
have a material adverse impact on the trading price of our common stock.
The requirements
of being a U.S. public company may strain our resources and divert management's attention.
As a U.S. public company,
we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, certain listing requirements,
and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and
financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems
and resources. The Exchange Act requires, among other things, that we file annual and current reports with respect to our business
and operating results.
As a result of disclosure
of information in this prospectus and in filings required of a public company, our business and financial condition is more visible,
which we believe may result in threatened or actual litigation, including by competitors and other third parties. If such claims
are successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved
in our favor, these claims, and the time and resources necessary to resolve them, could divert resources of our management and
harm our business and operating results.
Risks Relating Principally
to This Offering and Our Capital Structure
We have broad
discretion in the use of the net proceeds from this offering and may not use them effectively.
We cannot specify with
certainty all of our potential uses for the estimated $13,600,000 in net proceeds we will receive from this offering.  Our management
will have broad discretion in the application of the net proceeds. Accordingly, you will have to rely upon the judgment of our
management with respect to the use of the proceeds, with only limited information concerning management's specific intentions.
Our management may spend a portion or all of the net proceeds from this offering in ways that our stockholders may not desire or
that may not yield a favorable return. The failure by our management to apply these funds effectively could harm our business.
Pending its use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
An active market
for our common stock and warrants may not develop or be maintained, which could limit your ability to sell your common stock and/or
warrants.
Prior to this offering,
there has been a limited public market for our common stock and no market for our warrants and the public offering price may bear
no relationship to the price at which our common stock and warrants will trade after this offering.  There can be no
assurance that an active public market for our common stock or warrants will develop or be sustained after this offering or how
liquid that market might become.  As a result, investors may not be able to sell their common stock or warrants at or
above the public offering price or at the time that they would like to sell.
Our stock and
warrant price may be volatile.
The market price of our
common stock and warrants is likely to be highly volatile and could fluctuate widely in price in response to various factors, many
of which are beyond our control, including, but not limited to:
·
technological innovations or new products and services
by us or our competitors,
·
additions or departures of key personnel,
·
sales of our common stock,
·
our ability to integrate operations, technology, products
and services,
·
our ability to execute our business plan,
·
operating results below expectations,
·
loss of any strategic relationship,
·
industry developments,
20
·
economic and other external factors, and
·
period-to-period fluctuations in our financial results.
You may consider any one
of these factors to be material.  The price of common stock and warrants may fluctuate widely as a result of any of the
above listed factors.  In addition, the securities markets have from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially
and adversely affect the market price of our common stock and warrants.
A significant
portion of our total outstanding shares of common stock may be sold into the public market in the near future, which could cause
the market price of our common stock and warrants to drop significantly, even if our business is doing well.
Sales of a substantial
number of shares of our common stock in the public market could occur at any time after the expiration of the lock-up agreements
described in "Underwriting and Plan of Distribution." These sales, or the market perception that the holders of a large
number of shares of common stock intend to sell shares of common stock, could reduce the market price of our common stock and warrants.
After this offering, we will have up to 12,666,600 shares of common stock outstanding based on the number of shares of common stock
outstanding as of March 12, 2015 and after giving effect to the anticipated 8-to-1 reverse stock split. This amount includes the
3,409,091 shares of common stock that we are selling in this offering, which may be resold in the public market immediately and
1,719,145 shares of common stock that will be issued upon the mandatory conversion of Class A and Class B preferred stock. The
remaining 7,538,364 shares of common stock, or 60% of our outstanding shares of common stock after this offering, will be able
to be sold immediately, subject to any applicable volume limitations under federal securities laws, or within 180 days after the
date of this prospectus, subject to extension in specified instances, due to lock-up agreements between certain holders of some
of these shares of common stock and the underwriters (as described in "Underwriting and Plan of Distribution"). However,
the underwriters can waive the provisions of these lock-up agreements and allow these stockholders to sell their shares of common
stock at any time.
When we effect
a reverse stock split, the liquidity of our common stock and market capitalization could be adversely affected.
The Board of Directors
intends to effect a reverse stock split in order to increase the stock price to a level that will enable it to apply for listing
on the NASDAQ Capital Market or other national stock exchange.
A reverse stock split
is often viewed negatively by the market and, consequently, can lead to a decrease in our overall market capitalization.  If
the per share market price does not increase proportionately as a result of the reverse split, then the value of our company as
measured by our market capitalization will be reduced, perhaps significantly. This also will significantly reduce the number of
shares of our common stock that are outstanding, and the liquidity of our common stock could be adversely affected and you may
find it more difficult to purchase or sell shares of our common stock.
If you purchase shares
of common stock in this offering, you will suffer immediate dilution of your investment.
The public offering per
price per share of our common stock will be substantially higher than the net tangible book value per share of our common stock
immediately after the offering. At the assumed public offering price of $4.40 per share, purchasers of our common stock will incur
immediate dilution
of $3.42
per share in the net tangible book value of their purchased
shares. Conversely, the shares of our common stock that our existing stockholders currently own will receive an increase in net
tangible book value per share. See "Dilution."
You may be diluted
by exercises of outstanding options and warrants and conversions of outstanding convertible promissory notes.
As of March 12, 2015,
we had outstanding options to purchase an aggregate of 2,621,716 shares of our common stock at a weighted average exercise price
of $3.01 per share, warrants to purchase an aggregate of 8,022,740 shares of our common stock at a weighted average exercise price
of $4.80 per share and convertible promissory notes convertible at a twenty percent (20%) discount to the price per share of the
securities issued by the Company in this public offering. The exercise of such outstanding options and warrants and the conversion
of such outstanding convertible promissory notes will result in further dilution of your investment. In addition, you may experience
additional dilution if we issue common stock in the future. As a result of this dilution, you may receive significantly less in
net tangible book value than the full purchase price you paid for the shares in the event of liquidation.
21
There is no guarantee
that our shares of common stock or warrants will be listed on the NASDAQ Capital Market.
In connection with the
filing of the registration statement of which this prospectus forms a part, we applied for listing of our common stock and warrants
on the NASDAQ Capital Market.  After the consummation of this offering, we believe that we will satisfy the listing requirements
and expect that our common stock and warrants will be listed on the NASDAQ Capital Market.  Such listing, however, is
not guaranteed.  If such listing is approved, there can be no assurance any broker will be interested in trading our
stock.  Therefore, it may be difficult to sell your shares of common stock if you desire or need to sell them.  Our
lead underwriter, Aegis Capital Corp., is not obligated to make a market in our securities, and even if they make a market, they
can discontinue market making at any time without notice.  Neither we nor the underwriters can provide any assurance
that an active and liquid trading market in our securities will develop or, if developed, that such market will continue.
If our common stock and
warrants are approved for listing on the NASDAQ Capital Market, there is no guarantee that we will be able to maintain such listing
for any period of time by perpetually satisfying NASDAQ's continued listing requirements.
Because we do not anticipate
paying any cash dividends on our capital stock in the foreseeable future, capital appreciation, if any, will be your sole source
of gain.
We have not historically,
and do not anticipate paying future dividends on our capital stock. We currently intend to retain all of our future earnings, as
applicable, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude
us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the
foreseeable future.
Reports published by
securities or industry analysts, including projections in those reports that exceed our actual results, could adversely affect
our common stock price and trading volume.
Securities research analysts,
including those affiliated with our underwriters, may establish and publish their own periodic projections for our business. These
projections may vary widely from one another and may not accurately predict the results we actually achieve. Our stock price may
decline if our actual results do not match securities research analysts' projections. Similarly, if one or more of the analysts
who writes reports on us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price
could decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, our
stock price or trading volume could decline. While we expect securities research analyst coverage, if no securities or industry
analysts begin to cover us, the trading price for our stock and the trading volume could be adversely affected.
FORWARD-LOOKING STATEMENTS
This prospectus contains
forward-looking statements. All statements other than statements of historical fact contained in this prospectus, including statements
regarding our future results of operations and financial position, business strategy and plans and objectives of management for
future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements.
In some cases, you can
identify forward-looking statements by terms such as "may," "will," "should," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential," "continue,"
or the negative of these terms or other similar words. These statements are only predictions. We have based these forward-looking
statements largely on our current expectations and projections about future events and financial trends that we believe may affect
our business, financial condition and results of operations. We discuss many of the risks in greater detail under the heading "Risk
Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the date of this prospectus.
Forward-looking statements in this prospectus include, but are not necessarily limited to, those relating to:
·
our intention to introduce new products or services,
·
our expectations about securing strategic relationships
with global couriers or large clinical research organization,
·
our future capital needs,
·
results of our research and development efforts, and
·
success of our patent applications.
Forward-looking statements
are subject to risks and uncertainties, certain of which are beyond our control. Actual results could differ materially from those
anticipated as a result of the factors described in "Risk Factors" in this prospectus and detailed in our other SEC
filings, including among others:
·
the effect of regulation by United States and foreign
governmental agencies,
22
·
research and development efforts, including delays in
developing, or the failure to develop, our products,
·
the development of competing or more effective products
by other parties,
·
uncertainty of market acceptance of our products,
·
errors in business planning attributable to insufficient
market size or segmentation data,
·
problems that we may face in manufacturing, marketing,
and distributing our products,
·
problems that we may encounter in further development
of Cryoport Express® Solutions, which includes the cloud-based logistics management software branded as Cryoportal™,
·
our inability to raise additional capital when needed,
·
delays in the issuance of, or the failure to obtain,
patents for certain of our products and technologies,
·
problems with important suppliers and strategic business
partners, and
·
difficulties or delays in establishing marketing relationships
with international couriers.
Because of these risks
and uncertainties, the forward-looking events and circumstances discussed in this prospectus might not transpire. Except for our
ongoing obligations to disclose material information as required by the federal securities laws, we undertake no obligation to
release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may
materially affect our actual results and may be beyond our control. New factors emerge from time to time, and it is not possible
for our management to predict all of such factors or to assess the effect of each factor on our business.
This prospectus also contains
estimates and other industry and statistical data developed by independent parties and by us relating to market size, growth, and
segmentation of markets. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight
to such estimates. We have not independently verified these estimates generated by independent parties and contained in this prospectus
and, accordingly, we cannot guarantee their accuracy or completeness. In addition, projections, assumptions, and estimates of our
future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of
uncertainty and risk due to a variety of factors, including those described in "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this prospectus. These and other
factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.
USE OF PROCEEDS
We estimate that the net proceeds
to us from the sale of the shares of common stock and warrants that we are offering will be approximately $13,600,000, based on
an assumed public offering price of $4.40 per share of common stock and warrant to purchase one share of common stock and after
deducting underwriting discounts and commissions and estimated offering expenses that we must pay. We intend to use those net proceeds
primarily for working capital purposes and to partially repay certain secured promissory notes. Currently, our monthly operating
deficit is approximately $445,000 per month. Initially, we will have an increasing need for working capital to support our growth
strategy; hence, the amount of operating deficit may increase in advance of the anticipated substantial growth in our revenues.
With appropriate funding, such as receipt of proceeds from the issuance of substantially all of the shares of common stock and
warrants in this offering, we anticipate achieving cash flow breakeven involving an annual revenue run rate of $12 million
in twelve to fourteen months.
Between December 3, 2014 and
February 17, 2015, we issued our 7% Bridge Notes in the aggregate original principal amount of $915,000. Pursuant to the terms
of such notes, we are required to make prepayments in the amount equal to twenty five percent (25%) of the net cash proceeds received
by us from debt or equity offerings we complete. As of March 12, 2015, we have repaid approximately $173,600 of the original principal
amount of such notes. Accordingly, twenty five percent (25%) of the net cash proceeds received by us in the Offering will be used
to prepay such notes.
Pending any use, as described
above, we plan to invest the net proceeds in investment-grade, short-term, interest-bearing securities.
MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information
Our common stock is traded
on the OTCQB, operated by the OTC Markets Group, Inc. under the symbol "CYRX". We have also applied for listing of
our common stock on the NASDAQ Capital Market under the symbol ["*"]. No assurance can be given that our application
will be approved.
23
On March 12, 2015, the last
reported sale price for our common stock was $4.40 per share (after giving effect to the anticipated 8-to-1 reverse stock split).
There can be no assurances
that an active public market for our common stock or warrants will develop or be sustained. The high and low closing sale prices
of our common stock reported by OTCQB during the periods indicated were as follows:
High
Low
Year 2015:
Third Quarter Ended December 31, 2014
$
3.84
$
2.88
Second Quarter Ended September 30, 2014
$
3.92
$
3.20
First Quarter Ended June 30, 2014
$
4.24
$
2.80
Year 2014:
Fourth Quarter Ended March 31, 2014
$
4.56
$
2.72
Third Quarter Ended December 31, 2013
$
4.40
$
2.40
Second Quarter Ended September 30, 2013
$
4.16
$
1.84
First Quarter Ended June 30, 2013
$
4.48
$
1.28
Year 2013
Fourth Quarter Ended March 31, 2013
$
4.88
$
2.64
Third Quarter Ended December 31, 2012
$
3.12
$
0.88
Second Quarter Ended September 30, 2012
$
4.08
$
1.52
First Quarter Ended June 30, 2012
$
5.60
$
2.96
Number of Stockholders
As of March 12, 2015,
there were 229 record holders of our common stock.
Dividend Policy
No dividends on common
stock have been declared or paid by the Company. As of December 31, 2014, the Company had cumulative, undeclared dividends that
have not been accrued related to its outstanding preferred stock of $194,900. Upon the closing of this offering, the outstanding
Class A Convertible Preferred Stock and the Class B Convertible Preferred Stock, including the dividends that have accrued thereon,
will automatically convert into common stock and warrants. The Company intends to employ all available funds for the development
of its business and, accordingly, does not intend to pay any cash dividends in the foreseeable future.
Securities Authorized
For Issuance Under Equity Compensation Plans
We currently maintain
three equity compensation plans, referred to as the 2002 Stock Incentive Plan (the "2002 Plan"), the 2009 Stock Incentive
Plan (the "2009 Plan") and the 2011 Stock Incentive Plan (the "2011 Plan"). Our Compensation Committee
is responsible for making, reviewing and recommending grants of options and other awards under these plans which are approved by
the Board.
The 2002 Plan, which was
approved by our stockholders in October 2002, allows for the grant of options to purchase up to 62,500 shares of the Company's
common stock. The 2002 Plan provides for the granting of options to purchase shares of our common stock at prices not less than
the fair market value of the stock at the date of grant and generally expire 10 years after the date of grant. The stock options
are subject to vesting requirements, generally three or four years. The 2002 Plan also provides for the granting of restricted
shares of common stock subject to vesting requirements. The 2002 Plan expired as of October 2012, and thus no shares are available
for issuance.
The 2009 Plan, which was
approved by our stockholders at our 2009 Annual Meeting of Stockholders held on October 9, 2009, provides for the grant of
stock-based incentives. The 2009 Plan allows for the grant of up to 150,000 shares of our common stock for awards to our officers,
directors, employees and consultants. The 2009 Plan provides for the grant of incentive stock options, nonqualified stock options,
restricted stock rights, restricted stock, performance share units, performance shares, performance cash awards, stock appreciation
rights, and stock grant awards. The 2009 Plan also permits the grant of awards that may qualify for the "performance-based
compensation" exception to the $1,000,000 limitation on the deduction of compensation imposed by Section 162(m) of the
Code. As of December 31, 2014, a total of 37,971 shares of our common stock remained available for future grants under the 2009
Plan.
24
The 2011 Plan, as amended,
which was approved by our stockholders at our 2011 Annual Meeting of Stockholders held on September 22, 2011 and, with respect
to the amendments, at our 2012, 2013 and 2014 Annual Meeting of Stockholders held on September 13, 2012, September 6, 2013 and
August 29, 2014, respectively, provides for the grant of stock-based incentives. The 2011 Plan allows for the grant of up to 1,737,500
shares of our common stock for awards to our officers, directors, employees and consultants. The 2011 Plan provides for the grant
of incentive stock options, nonqualified stock options, restricted stock rights, restricted stock, performance share units, performance
shares, performance cash awards, stock appreciation rights, and stock grant awards. The 2011 Plan also permits the grant of awards
that may qualify for the "performance-based compensation" exception to the $1,000,000 limitation on the deduction of
compensation imposed by Section 162(m) of the Code. Awards may be granted under the 2011 Plan until September 21, 2021
or until all shares available for awards under the 2011 Plan have been purchased or acquired unless the stockholders of the Company
vote to approve an extension of the 2011 Plan prior to such expiration date. As of December 31, 2014, a total of 323,249 shares
remained available for future grants under the 2011 Plan.
In addition to the stock
options issued pursuant to the Company's incentive plans, the Company has granted warrants to employees, officers, non-employee
directors and consultants. The warrants are generally not subject to vesting requirements and have ten-year terms.
The following table sets
forth certain information as of December 31, 2014 concerning the Company's common stock that may be issued upon the exercise
of options or warrants or pursuant to purchases of stock under the 2002 Plan, the 2009 Plan, the 2011 Plan and other stock based
compensation:
Plan Category
(a)
Number of Securities
to be Issued Upon the
Exercise of
Outstanding Options
and Warrants
(b)
Weighted-Average
Exercise Price of
Outstanding
Options and
Warrants
(c)
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
Equity compensation plans approved by stockholders
1,454,320
$
3.49
361,220
Equity compensation plans not approved by stockholders
(1)
1,245,180
$
4.13
N/A
2,699,500
361,220
(1)
During November 5, 2012 through December 31, 2014, a total of 1,212,322 options were granted to employees outside of an option plan. In the past the Company has issued warrants to purchase 40,927 shares of common stock in exchange for services provided to the Company, of which warrants to purchase 32,857 shares of common stock are outstanding. The exercise prices ranged from $22.40 to $86.40 and generally vested upon issuance. Fifteen consultants and former officers and directors received warrants to purchase 40,927 shares of common stock in this manner.
DETERMINATION OF THE
OFFERING PRICE
The public offering price
of the shares of common stock and warrants offered by this prospectus will be based on the closing market price of our common stock
immediately prior to the closing date of this offering and other factors described in "Underwriting and Plan of Distribution."
CAPITALIZATION
The
following table sets forth our cash and cash equivalents and our capitalization as of December 31, 2014, in each case after giving
effect to the proposed 8-to-1 reverse stock split of our common stock expected to be effected after the board files an amendment
to our certificate of incorporation. It is our intent to effect the reverse stock split prior to the closing of this offering:
●
On an actual basis;
●
On a proforma basis giving the effect the following transactions and adjustments
as if they had occurred on December 31, 2014:
●
The issuance of 1,719,145 shares of common stock issuable upon the mandatory
conversion of 454,750 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred Stock that will occur upon
the closing of this financing (includes 11,862 shares of our Class A Preferred Stock and 26,134 shares of our Class B Preferred
Stock issued at $12.00 per share during the period January 1, 2015 through March 12, 2015 and the conversion of unpaid dividends
for the Class A Preferred Stock and Class B Preferred Stock totaling $278,760 and $2,023, respectively, as of March 12, 2015).
●
On a proforma as adjusted basis, giving effect to the sale by us of 3,409,941
shares of common stock in this offering at an assumed public offering price of $4.40 per share, after deducting the estimated underwriting
discounts and commissions and estimated offering expenses payable to us.
You
should read this table together with "Management's Discussion and Analysis of Financial Condition and Results of Operations"
and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.
December 31, 2014
Pro Forma
Actual
Pro Forma
As Adjusted
(unaudited)
(unaudited)
(unaudited)
Cash and Cash Equivalents
$
773,922
$
1,229,874
$
14,829,874
Stockholders (Deficit) Equity:
Preferred Stock, $0.001 par value; 2,500,000 shares authorized;
Class A convertible preferred stock - $0.001 par value; 800,000 shares authorized 442,888 shares issued and outstanding, actual; no shares issued and outstanding pro forma; no shares issued and outstanding pro forma as adjusted
$
443
$
-
$
-
Common stock, $0.001 par value; 250,000,000 shares
    authorized; 7,507,231 shares issued and outstanding, actual; 9,226,376 shares issued and outstanding pro forma; 12,635,467
    shares issued and outstanding, pro forma as adjusted
7,507
9,226
12,635
Additional paid-in capital
92,802,795
93,538,254
107,134,845
Accumulated deficit
(93,928,378
)
(94,209,161
)
(94,209,161
)
Total capitalization
$
(1,117,633
)
$
(661,681
)
$
12,938,319
25
The
number of shares of our common stock to be outstanding after this offering is based on 7,507,231 shares outstanding as of December
31, 2014, and excludes:
●
2,666,642 shares of our common stock issuable upon the exercise of options
outstanding December 31, 2014 with a weighted average exercise price of $3.01 per share;
●
8,397,894 shares of common stock issuable upon the exercise of warrants outstanding
as of December 31, 2014 with a weighted average exercise price of $6.37 per share;
●
361,220 shares of common stock available for future grant as of December 31,
2014 under our 2009 and 2011 Plans.
●
3,409,091 shares of common stock issuable upon the exercise of the warrants
to be issued in connection with this offering;
●
1,719,145 shares of our common stock issuable upon the exercise of warrants
that will be issued upon the mandatory conversion of the Class A Preferred Stock and Class B Preferred Stock that will occur upon
the closing of the offering;
●
Warrants to purchase up to 136,364 shares of our common stock issuable to the
underwriter in connection with the completion of this offering;
●
1,022,728 shares of common stock (including the shares of common stock underlying
the warrants included as part of the shares of common stock and warrants) that comprise the shares of common stock and warrants
that may be purchased by the underwriters' representative upon the exercise of its 45-day option to cover over-allotments, if any;
and
●
273,065 shares of common stock and 273,065 shares of common stock
                                                                   issuable upon the exercise of warrants that may be issued upon the voluntary conversion of certain promissory notes as a
                                                                   result of this offering.
DILUTION
If you invest in our common
stock, your interest will be diluted to the extent of the difference between the public offering price you pay and the as adjusted
net tangible book value per share of our common stock after this offering, assuming no value is attributed to the warrants we are
offering by this prospectus. Our net tangible book value as of December 31, 2014 was $(1,263,948), or $(0.17) per share of common
stock (after giving effect to the anticipated 8-to-1 reverse stock split). We calculate net tangible book value per share by calculating
the difference between the total assets less goodwill and other intangible assets and total liabilities, and dividing the result
by the number of shares of common stock outstanding.
Net tangible book value
dilution per share represents the difference between the amount per share of common stock and warrant to purchase one share of
common stock paid by new investors who purchase shares of common stock and warrants in this offering and the pro forma net tangible
book value per share of common stock immediately after completion of this offering as of December 31, 2014, after giving effect
to:
●
the sale by us of 3,409,091 shares of common stock at an assumed public offering price of $4.40 per
share and the application of the estimated net proceeds to us in this offering as described under "Use of Proceeds";
26
●
the 8-to-1 reverse stock split;
●
the issuance of 1,719,145 shares of common stock that will be issued upon the mandatory conversion
of 454,750 shares of Class A Preferred Stock and 26,134 shares of Class B Preferred Stock that will occur upon the closing of this
offering.; and
●
the estimated underwriting discounts and commissions and offering expenses payable by us.
Adjusted
Assumed public
    offering price per share of common stock and warrant to purchase one share of common stock
$
4.40
Net tangible book deficit per share  as of
    December 31, 2014
$
(0.17
)
Increase in net tangible
    book value per share attributable to this offering
1.15
As adjusted net tangible
    book value per share after this offering
0.98
Dilution in net tangible
    book value per share to new investors
$
3.42
The following table summarizes
as of December 31, 2014, on a pro forma basis to reflect the same adjustments described above, the number of shares of common stock
purchased from us, the total consideration paid and the average price per share paid by:
●
the existing common stockholders and preferred stockholders
on an as converted basis; and
●
the new investors in this offering, assuming the sale
of 3,409,091 shares of common stock offered hereby at an assumed public offering price of $4.40 per share
The calculations are based
upon total consideration given by new and existing stockholders, before any deduction of estimated underwriting discounts and commissions
and offering expenses.
Shares of Common Stock
Purchased
Total Consideration
Average
Price
Number
Percent
Amount
Percent
Per Share
Existing Stockholders
9,226,376
73
%
$
46,061,487
75
%
$
4.99
New Investors
3,409,091
27
%
$
15,000,000
25
%
$
4.40
Total
12,635,467
100
%
$
61,061,487
100
%
$
4.83
The above table excludes
an aggregate of up to 16,690,356 additional shares of common stock reserved and available for future issuance (i) upon the exercise
of all outstanding stock options and warrants to purchase common stock, (ii) upon the exercise of all warrants issued in connection
with this public offering, and (iii) under the 2009 Plan and the 2011 Plan.
27
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial
statements and related notes that appear elsewhere in this prospectus. In addition to historical consolidated financial information,
the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these
differences include those discussed below and elsewhere in this prospectus, particularly in "Risk Factors." We caution
the reader not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of
the date of this prospectus. We undertake no obligation to update forward-looking statements to reflect events or circumstances
occurring after the date of this prospectus.
General Overview
We provide cryogenic logistics
solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology and
specialized cold chain logistics knowhow. We view our solutions as disruptive to the "older technologies" of dry ice
and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client's requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.
Our Cryoport Express
®
Solutions include a sophisticated cloud-based logistics operating platform that we have branded as the Cryoportal™. The Cryoportal™
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal™ records
and retains a fully documented "chain-of-custody" and, at the client's option, "chain-of-condition"
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.
The branded packaging
for our Cryoport Express
®
Solutions includes our liquid nitrogen dry vapor shippers, The Cryoport Express
®
Shippers. Cryoport Express
®
Shippers are cost-effective and reusable cryogenic transport containers (our standard
shipper is a patented vacuum flask) utilizing an innovative application of "dry vapor" liquid nitrogen ("LN2")
technology. Cryoport Express
®
Shippers are International Air Transport Association ("IATA") certified
and validated to maintain stable temperatures of minus 150° C and below for a 10-day dynamic shipment period. The Company currently
features three Cryoport Express
®
Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials), the High Volume
Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express
®
CXVC1 Shipper (holding
up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials, canes, straws,
plates, etc.)
Our most used solution
is the "turnkey" solution, which can be accessed directly through our cloud-based Cryoportal™ or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express
®
Shipper package to the client who conveniently loads its frozen commodity into the inner chamber of the Cryoport Express
®
Shipper.  The customer then closes the shipper package and reseals the shipping box displaying the next recipient's
address ("Flap A") for pre-arranged carrier pick up.  Cryoport arranges for the pick-up of the parcel by a shipping
service provider, which is designated by the client or chosen by Cryoport, for delivery to the client's intended recipient. 
The recipient simply opens the shipper package and removes the frozen commodity that has been shipped.  The recipient then
reseals the package, displaying the nearest Cryoport Operations Center address ("Flap B") making it ready for
pre-arranged carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper, it is
cleaned, put through quality assurance testing, and returned to inventory for reuse.
In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard "Turn-key Solution," described above, we also provide the following
customer facing, value-added solutions to address our various clients' needs:
28
·
"
Customer
Staged Solution
," designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express
®
Shipper packages to our customer, in an uncharged state, enabling our customer
(after training/certification) to charge them with liquid nitrogen and use our Cryoportal™ to enter orders with shipping
and delivery service providers for the transportation of the package. Once the order is released, our customer services professionals
monitor the shipment and the return of the shipper for cleaning, quality assurance testing and reuse.
·
"
Customer
Managed Solution
," a limited customer implemented solution whereby we supply our Cryoport Express
®
Shippers packages to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection
of the shipping and delivery service provider and the return of the shipper to us. Under this solution, the customer accepts a
significant level of risk for a successful shipment.
·
"
powered
by Cryoport
SM
," made available to providers of shipping and delivery services who seek to offer a "branded"
cryogenic logistics solution as part of their service offerings, with "
powered by Cryoport
SM
" appearing
prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements,
such as minimum required shipping volumes.
·
"
Integrated
Solution,
"
which is our outsource solution. It is our most comprehensive and complex solution. It involves
our management of the entire cryogenic logistics process for our client, including Cryoport employees at the client's site
to manage the client's cryogenic logistics function in total.
·
"
Regenerative
Medicine Point-of-Care Repository Solution,
" designed for allogeneic therapies. In this model we supply our Cryoport
Express
®
Shipper package to ship and store cryogenically preserved life science products for up to 6 days (or longer
periods with supplementary shippers) at a point-of-care site, with the Cryoport Express
®
Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service
professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport
Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through quality assurance testing,
and returned to inventory for reuse.
·
"
Personalized
Medicine and Cell-based Immunotherapy Solution,
" designed for autologous therapies. In this model, our Cryoport
Express
®
Shipper package serves as an enabling technology for the safe transportation of manufactured autologous
cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition
transport from, (a) the collection of the patient's cells in a hospital setting, to (b) a central processing facility where
they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells
to a point-of-care treatment facility.  If required, the Cryoport Express
®
Shipper can then serve as a temporary
freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where the medical
provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device.
Our customer service professionals monitor each shipment throughout the predetermined process, including the return of the shipper
to us. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through
quality assurance testing, and returned to inventory for reuse.
Strategic Logistics
Alliances
We have sought to establish
strategic alliances as a method of marketing our solutions providing minus 150° C shipping conditions to the life sciences
industry. We have focused our efforts on leading companies in the logistics services industry as well as participants in the life
sciences industry. In connection with our alliances with providers of shipping services, we refer to their offerings as "
powered
by Cryoport
SM
" to reflect our solutions being integrated into our alliance partner's services.
Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.
29
FedEx.
In January
2013, we entered into a master agreement with Federal Express Corporation ("FedEx") (the "FedEx Agreement")
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal
TM
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days' notice.
Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport's services for frozen temperature-controlled cold chain transportation
as its FedEx
®
Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx's
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal
TM
software
platform, which is "
powered by Cryoport
SM
" for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.
DHL.
In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding ("DHL"). This relationship with
DHL is a further implementation of the Company's expansion of distribution partnerships under the "
powered by Cryoport
SM
"
model described above, allowing us to expand our sales and marketing reach through our partners and build awareness of the benefits
of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold chain logistics offerings to its life
sciences and healthcare customers with Cryoport's validated cryogenic solutions. DHL added 15 additional certified Life Sciences
stations in the second quarter of 2014 bringing the Thermonet network to 60 stations in operation. Over the course of rolling out
our new relationship, this expanded network will offer Cryoport's cryogenic solutions under the DHL brands as "
powered
by Cryoport
SM
". In addition, DHL's customers will be able to have direct access to our cloud-based order
entry and tracking portal to order Cryoport Express
®
Solutions and receive preferred DHL shipping rates and discounts.
Our proprietary logistics management operating platform, the Cryoportal
TM
, is integrated with DHL's tracking and
billing systems to provide DHL life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.
UPS.
In October
2014, we added United Parcel Services, Inc. ("UPS") as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company's
expansion of distributors under the "
powered by Cryoport
SM
" model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.
Over the course of rolling
out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal to
order Cryoport Express
®
Solutions and gain access to UPS's broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal
TM
,
is integrated with UPS's tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.
These agreements
the three largest integrators in the world represent a significant validation of our solutions and the way we conduct our business.
Life Sciences Agreements
Zoetis.
In December 2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal
TM
to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis' total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport's scope to manage all logistics
of Zoetis' key frozen poultry vaccine to all Zoetis' international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport's role to include the logistics management
for a second poultry vaccine.
30
Liventa Biosciences.
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. ("Liventa"), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport's Regenerative Medicine
Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express
®
Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport's proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa's distribution capability to orthopedic care providers.
The implementation of Cryoport's Regenerative Medicine
Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express
®
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.
In summary, we serve the
life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.
Companies or institutions
such as therapy developers for personalized medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic
laboratories, contract manufacturers, cord blood repositories, vaccine manufacturers, animal husbandry related companies, in-vitro
fertilization clinics, and other organizations handling commodities requiring reliable cryogenic logistics solutions are amongst
our clients. These companies usually operate within heavily regulated environments and as such, changing vendors and distribution
practices typically require a number of steps, which may include the audit of our facilities, review of our procedures, qualifying
us as a vendor, and performing test shipments. This process can take three to nine months or longer to complete prior to a potential
customer adopting one or more of our Cryoport Express
®
Solutions.
Going Concern
As reported in the Report
of Independent Registered Public Accounting Firm to our March 31, 2014 and 2013 consolidated financial statements, we have
incurred recurring losses and negative cash flows from operations since inception. These factors, among others, raise substantial
doubt about our ability to continue as a going concern.
We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express
®
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at March 31, 2014, and funds currently being raised through a preferred stock offering together
with the revenues generated from our services will be sufficient to sustain our planned operations into the second quarter of fiscal
year 2015; however, we must obtain additional capital to fund operations thereafter and for the achievement of sustained profitable
operations. These factors raise substantial doubt about our ability to continue as a going concern. We are currently working on
funding alternatives in order to secure sufficient operating capital to allow us to continue to operate as a going concern.
Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express
®
Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis on acceptable terms or at all. Management's inability to successfully achieve significant
revenue increases or its cost reduction strategies or to complete any other financing will adversely impact our ability to continue
as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts to become
a self-sustaining financially viable entity.
At December 31, 2014,
we had an accumulated deficit of $93.9 million. During the nine months ended December 31, 2014, we used cash in operations
of $2.8 million and had a net loss of $5.1 million.
While we increased revenues
year-over-year by 142% to $2.7 million for the fiscal year ended March 31, 2014, our revenues are still significantly lower than
our operating expenses during the year and we have no assurance of the level of future revenues. We incurred a net loss of $19.6
million and used cash of $4.4 million in our operating activities during the year ended March 31, 2014. We had negative working
capital of $2.9 million, and had cash and cash equivalents of $369,600 at March 31, 2014.
31
We
have funded our operations through a preferred stock offering and secured promissory notes (see Note 5 and Note 8 in the accompanying
December 31, 2014 condensed consolidated financial statements) and plan to raise additional funds through additional debt or equity
offerings to cover general working capital needs and sales and marketing initiatives to expand our customer base and increase sales.
There is no assurance that funds can be secured or if these funds would allow us to continue our operations until more significant
revenues can be generated or more funding can be secured. These matters raise substantial doubt about our ability to continue as
a going concern.
Results of Operations
Nine months ended
December 31, 2014 compared to nine months ended December 31, 2013:
The following table summarizes
certain information derived from our condensed consolidated statements of operations:
Nine Months Ended
December 31,
2014
2013
$ Change
% Change
($ in 000's)
Revenues
$
2,737
$
1,825
$
912
50.0
%
Cost of revenues
(1,938
)
(1,531
)
(407
)
26.6
%
Gross margin
799
294
505
171.9
%
Selling, general and administrative
(4,431
)
(3,768
)
(663
)
17.6
%
Research and development
(268
)
(330
)
62
(18.8
)%
Debt conversion expense
—
(13,714
)
13,714
(100.0
)%
Interest expense
(1,185
)
(627
)
(558
)
89.1
%
Change in fair value of derivatives
—
21
(21
)
(100.0
)%
Other expense, net
(3
)
—
(3
)
100.0
%
Provision for income taxes
(2
)
—
(2
)
100.0
%
Net loss
$
(5,090
)
$
(18,124
)
$
13,034
(71.9
)%
Revenues
.
We generated revenues from customers in all of our target life sciences markets, such as biotech and diagnostic companies, pharmaceutical
companies, central laboratories, contract research organizations, the reproductive medicine market, and research institutions.
Revenues increased $911,700 or 50.0% for the nine months ended December 31, 2014, as compared to the nine months ended December
31, 2013. This increase is primarily driven by an overall increase in the number of customers utilizing our services and frequency
of shipments compared to the prior year, an increase in revenues in the reproductive medicine market and the ramp up and expansion
of logistics services provided to Zoetis. Revenues in the reproductive medicine market increased by 82% over the prior period to
$691,400 for the nine months ended December 31, 2014, driven by continued success of our telemarketing activities and email and
other targeted marketing campaigns and an increased awareness of our cryogenic logistics solutions in this market. Our revenues
from Zoetis were $685,000 for the nine months ended December 31, 2014, representing a 21% increase over the prior year period.
This is reflective of the expansion of our services, both domestically and globally, provided to Zoetis for a primary poultry vaccine,
and the addition of logistics management for a second vaccine that was introduced to the market during the fourth calendar quarter
of 2013.
Gross margin and
cost of revenues.
Gross margin for the nine months ended December 31, 2014 was 29.2% of revenues, as compared to 16.1%
of revenues for the nine months ended December 31, 2013. The increase in gross margin is primarily due to the increase in revenues
combined with a reduction in freight as a percentage of revenues and a decrease of fixed manufacturing costs. Cost of revenues
for the nine months ended December 31, 2014 was 70.8% of revenues, as compared to 83.9% of revenues for the nine months ended December
31, 2013. Our cost of revenues are primarily comprised of freight charges, payroll and related expenses related to our operations
center in California, third-party charges for our European and Asian operations centers in Holland and Singapore, depreciation
expenses of our Cryoport Express
®
Shippers and supplies and consumables used for our solutions. The increase in
cost of revenues is primarily due to freight charges from the growth in shipments.
Selling, general
and administrative expenses
.
Selling, general and administrative expenses increased $663,200 for the nine months ended
December 31, 2014 or 17.6% as compared to the nine months ended December 31, 2013. The increase is primarily due to salaries and
recruiting fees incurred to expand our sales force, the engagement of an investor relations firm and related activities, equity
based compensation charges, public company related expenses including legal, SOX and financial reporting expenses, and banking
charges as a result of the higher business volume.
32
Research and development
expenses
.
Research and development expenses decreased $62,000 or 18.8% for the nine months ended December 31, 2014, as
compared to the nine months ended December 31, 2013. Our research and development efforts are focused on continually improving
the features of the Cryoport Express
®
Solutions including the Company's cloud-based logistics management platform,
the Cryoportal
TM
, the Cryoport Express
®
Shippers and development of new packaging solutions and
additional accessories to facilitate the efficient shipment of life science commodities using our solution. We use an outside software
development company and other third parties to provide some of these services. Research and development expenses to date have consisted
primarily of costs associated with continually improving the features of our Cryoport Express
®
Solution including the web based customer service portal and the Cryoport Express
®
Shippers. Further, these efforts are expected to lead to the introduction of shippers of varying sizes based on market requirements,
constructed of lower cost materials and utilizing high volume manufacturing methods that will make it practical to provide the
cryogenic packages offered by our Cryoport Express
®
Solution. Other research
and development effort has been directed toward improvements to the liquid nitrogen retention system to render it more reliable
in the general shipping environment and to the design of the outer packaging. Alternative phase change materials in place of liquid
nitrogen may be used to increase the potential markets these shippers can serve such as ambient and 2°- 8°C markets.
Debt conversion
expense
. Debt conversion expense for the nine months ended December 31, 2013 of $13.7 million was related to the induced
conversion of $4.1 million of aggregate principal and interest from the bridge notes into shares of common stock and warrants.
Debt conversion expense represents the fair value of the securities transferred in excess of the fair value of the securities issuable
upon the original conversion terms of the bridge notes. The Company calculated the fair value of the common stock issued by using
the closing price of the stock on the date of issuance. The fair value of the warrants was calculated using Black-Scholes.
Interest expense
.
Interest expense increased $558,600 for the nine months ended December 31, 2014, as compared to the nine months ended December
31, 2013. Interest expense for the nine months ended December 31, 2014 included amortization of the debt discount and deferred
financing fees of approximately $1.1 million, of which $826,900 related to the fair value of the beneficial conversion feature
of the 5% Bridge Notes that was triggered by the convertible preferred stock offering, interest expense on our 5% Bridge Notes
of approximately $10,600, accrued interest on our related party notes payable of approximately $23,600, amortization of the debt
discount on the 7% Bridge Notes of $38,100 and related interest expense of $3,000. Interest expense for the nine months ended December
31, 2013 included accrued interest on our related party notes payable of approximately $27,900, amortization of the debt discount
and deferred financing fees of approximately $540,600 and interest expense on our bridge notes of approximately $58,600.
Change in fair value
of derivatives
.
The warrants classified as derivative liabilities expired in April 2014. The gain on the change in fair
value of derivative liabilities was $20,800 for the nine months ended December 31, 2013 as a result of a decrease in the value
of our warrant derivatives, due primarily to a decrease in our stock price.
Results of Operations
for Fiscal 2014 Compared to Fiscal 2013
The following table summarizes
certain information derived from our consolidated statements of operations:
Year Ended March 31,
2014
2013
$ Change
% Change
($ in 000's)
Revenues
$
2,660
$
1,101
$
1,559
141.7
%
Cost of revenues
(2,223
)
(1,588
)
(635
)
40.0
%
Gross margin (loss)
437
(487
)
924
189.7
%
Selling, general and administrative
(5,106
)
(5,412
)
306
(5.6
)%
Research and development
(409
)
(425
)
16
(3.8
)%
Debt conversion expense
(13,714
)
—
(13,714
)
100.0
%
Interest expense
(784
)
(72
)
(712
)
976.6
%
Change in fair value of derivatives
21
16
5
26.5
%
Other expense, net
(8
)
—
(8
)
100.0
%
Provision for income taxes
(2
)
(2
)
—
—
Net loss
$
(19,565
)
$
(6,382
)
$
(13,183
)
206.6
%
33
Revenues
.
We
generated revenues from customers in all of our target life sciences markets, such as biotech and diagnostic companies, pharmaceutical
companies, central laboratories, contract research organizations, the reproductive medicine market/in vitro fertilization market,
and research institutions. Net revenues were $2.7 million for the year ended March 31, 2014, as compared to $1.1 million for the
year ended March 31, 2013. This $1.6 million or 142% increase is primarily driven by the ramp up and expansion of logistics services
provided to Zoetis, an increase in revenues in the reproductive medicine/in vitro fertilization market and an overall increase
in both the number of customers utilizing our services and frequency of shipments compared to the prior year. Our revenues from
Zoetis increased to $820,600 for the year ended March 31, 2014 from $62,300 during the prior year. This reflects the successful
implementation and expansion of our integrated model with Zoetis, which commenced in February of 2013, whereby we manage the cryogenic
shipments of a certain vaccine, both domestically and globally, and in October of 2013 expanded our services to include the logistics
management for a second vaccine. The increase in revenues in the reproductive medicine/in vitro fertilization market was particularly
strong, with revenues increasing from $238,000 to $614,000, an increase of $376,000 or 158%. This is partially the result of targeted
telemarketing activities and email marketing campaigns to broaden the awareness of our solution in this space.
Gross margin and
cost of revenues
. Gross margin for the year ended March 31, 2014 was 16.4% of revenues, as compared to a gross loss
of 44.3% of revenues for the prior year. The increase in gross margin is primarily due to the increase in net revenues combined
with a reduction in freight as a percentage of revenues and a decrease of fixed manufacturing costs. Cost of revenues for the year
ended March 31, 2014 was 83.6% of revenues, as compared to 144.3% of revenues for the prior year. Our cost of revenues are
primarily comprised of freight charges, payroll and related expenses related to our operations center in California, third-party
charges for our European and Asian operations centers in Holland and Singapore, depreciation expenses of our Cryoport Express
®
Shippers and supplies and consumables used for our solutions. The increase in cost of revenues is primarily due to freight charges
from the growth in shipments.
Selling, general
and administrative expenses
. Selling, general and administrative expenses decreased $306,000, or 5.6% for the year ended
March 31, 2014 as compared to the prior year. This decrease is primarily related to a severance payment of approximately $180,000
paid to the former Chief Executive Officer in April 2012 and a decrease in board of director stock-based compensation. Partially
offsetting these decreases is an increase in compensation related to replacement of the Chief Executive Officer and an increase
in expenses related to sales and marketing activities compared to previous year.
Research and development
expenses
. Research and development expenses decreased $16,000 or 3.8% for the year ended March 31, 2014, as compared
to the prior year. Our research and development efforts are focused on continually improving the features of the Cryoport Express
®
Solutions including the Company's cloud-based logistics management platform, the Cryoportal
TM
, the Cryoport Express
®
Shippers
and development of additional accessories to facilitate the efficient shipment of life science commodities using our solution.
We use an outside software development company and other third parties to provide some of these services. Research and development
expenses to date have consisted primarily of costs associated with continually improving the features of the Cryoport Express
®
Solution including the web based customer service portal and the Cryoport Express
®
Shippers. Further, these efforts
are expected to lead to the introduction of shippers of varying sizes based on market requirements, constructed of lower cost materials
and utilizing high volume manufacturing methods that will make it practical to provide the cryogenic packages offered by the Cryoport
Express
®
Solution. Other research and development effort has been directed toward improvements to the liquid nitrogen
retention system to render it more reliable in the general shipping environment and to the design of the outer packaging. Alternative
phase change materials in place of liquid nitrogen may be used to increase the potential markets these shippers can serve such
as ambient and 2°- 8°C markets.
Debt conversion
expense.
Debt conversion expense for the year ended March 31, 2014 of $13.7 million was related to the induced conversion
of $4.1 million of aggregate principal and accrued interest from the convertible bridge notes into shares of common stock
and warrants. Debt conversion expense represents the fair value of the securities transferred in excess of the fair value of the
securities issuable upon the original conversion terms of the bridge notes.  The Company calculated the fair value of the
common stock issued by using the closing price of the stock on the date of issuance.  The fair value of the warrants was calculated
using the Black-Scholes option pricing model.
Interest expense
.
Interest expense increased $712,000 for the year ended March 31, 2014, as compared to the prior year. Interest expense for
the year ended March 31, 2014 included amortization of the debt discount and deferred financing fees of approximately $678,900,
interest expense on our bridge notes of approximately $71,600, and accrued interest on our related party notes payable of approximately
$36,500. Interest expense for the year ended March 31, 2013 included amortization of the debt discount of approximately $17,500,
interest expense on our convertible debentures of approximately $9,900, and accrued interest on our related party notes payable
of approximately $42,200.
34
Change in fair value
of derivatives
. The gain for the year ended March 31, 2014 was the result of a decrease in the value of our warrant derivatives,
due primarily to a decrease in our stock price.
Other expense, net
.
The other expense, net for the year ended March 31, 2014 is primarily due to administrative charges and foreign exchange losses
on accounts receivable and payable invoices.
Liquidity and Capital
Resources
As of December 31, 2014,
the Company had cash and cash equivalents of $773,900 and negative working capital of $1.6 million. Historically, we have
financed our operations primarily through sales of our debt and equity securities.
For the nine months ended
December 31, 2014, we used $2.8 million of cash for operations primarily as a result of the net loss of $5.1 million offset by
non-cash expenses of $1.9 million primarily comprised of amortization of debt discount and deferred financing costs, stock-based
compensation expense, and depreciation and amortization. Also contributing to the cash impact of our net operating loss (excluding
non-cash items) was an increase in accounts payable and accruals of $317,600 and a reduction in accounts receivable of $107,900
due to improved collections. Net cash used in investing activities of $67,900 during the nine months ended December 31, 2014 was
due to the purchase of the recently introduced Cryoport Express
®
CXVC1 Shippers (holding up to fifteen hundred 2.0
ml vials).
Net cash provided by financing
activities totaled $3.3 million during the nine months ended December 31, 2014, and resulted from net proceeds from the issuance
of convertible preferred stock of $2.8 million, proceeds from the exercise of stock options and warrants of $11,600 and proceeds
of $615,000 from notes payable, partially offset by the repayment of convertible debentures of $50,000 and the repayment of related
party notes of $72,000.
As discussed in Note 2
of the accompanying condensed consolidated financial statements, there exists substantial doubt regarding the Company's ability
to continue as a going concern. The Company received gross proceeds of $3.4 million (approximately $2.8 million after offering
costs) in exchange for the issuance of 279,280 shares of convertible preferred stock in the first three quarters of fiscal 2015
which is further described in Note 8 in the accompanying condensed consolidated financial statements and proceeds of $865,000 from
the 7% Bridge Notes (see Notes 5 and 10 in the accompanying condensed consolidated financial statements). The funds raised are
being used for working capital purposes and to continue our sales efforts to advance the Company's commercialization of the
Cryoport Express
®
Solutions. However, the Company's management recognizes that the Company will need to obtain
additional capital to fund its operations until sustained profitable operations are achieved. Management is currently working on
such funding alternatives in order to secure sufficient operating capital through the end of fiscal year 2015. In addition, management
will continue to review its operations for further cost reductions to extend the time that the Company can operate with its current
cash on hand and additional bridge financing and to utilize third parties for services such as its international recycling and
refurbishment centers to provide for greater flexibility in aligning operational expenses with the changes in sales volumes.
Additional funding plans
may include obtaining additional capital through equity and/or debt funding sources; however, no assurance can be given that additional
capital, if needed, will be available when required or upon terms acceptable to the Company.
Off-Balance Sheet
Arrangements
We do not have any off
balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
Contractual Obligations
The following table summarizes
our contractual obligations as of December 31, 2014, and the effects such obligations are expected to have on liquidity and cash
flow in future periods ($ in '000's):
Total
Less than
1 Year
1-3 Years
4-5 Years
After
5 Years
Contractual obligations
Operating lease obligations
(1)
$
56
$
56
$
—
$
—
$
—
Notes payable
(2)
615
615
—
—
—
Other obligations
(3)
1,310
1,310
—
—
—
Total
$
1,981
$
1,981
$
—
$
—
$
—
35
(1)
The operating lease obligations are primarily related to the facility lease for our principal executive
office in Lake Forest, California expiring June 30, 2015.
(2)
Notes payable represent secured convertible promissory notes and accrued interest at 7% per annum
which were issued in December 2014 to certain accredited investors pursuant to the terms of subscription agreements and letters
of investment intent. All principal and accrued interest is due July 1, 2015. However, the Company may elect to extend the maturity
date to January 1, 2016.
(3)
Other obligations represent outstanding unsecured
indebtedness and accrued interest owed to four related parties which bear interest at the rate of 6% per annum. The unpaid principal
and accrued interest was due at maturity on various dates through March 1, 2015. In March 2015, the Company entered into definitive
agreements to exchange or amend the unpaid principal and interest which are due at various dates through May 1, 2016.
Impact of
Inflation
From time to time, Cryoport
experiences price increases from third party manufacturers and these increases cannot always be passed on to Cryoport's customers.
While these price increases have not had a material impact on Cryoport's historical operations or profitability in the past,
they could affect revenues in the future.
Critical Accounting
Policies and Estimates
Management's discussion
and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this prospectus, are
based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted
in the U.S. ("U.S. GAAP") Our significant accounting policies are described in the notes to the audited consolidated
financial statements contained elsewhere in this prospectus. Included within these policies are our "critical accounting
policies." Critical accounting policies are those policies that are most important to the preparation of our consolidated
financial statements and require management's most subjective and complex judgment due to the need to make estimates about
matters that are inherently uncertain. Although we believe that our estimates and assumptions are reasonable, actual results may
differ significantly from these estimates. Changes in estimates and assumptions based upon actual results may have a material impact
on our results of operations and/or financial condition.
We believe that the critical
accounting policies that most impact the consolidated financial statements are as described below.
Basis of Presentation
The accompanying consolidated
financial statements have been prepared in accordance with U.S. GAAP.
Principles
of Consolidation
The consolidated financial
statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany accounts
and transactions have been eliminated.
Use of Estimates
The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts. The Company's
significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance for inventory obsolescence,
deferred taxes and their accompanying valuations, valuation of derivative liabilities and valuation of common stock, warrants and
stock options issued for products or services.
36
Fair Value
of Financial Instruments
The Company's financial
instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible notes payable,
accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value at March 31, 2014
and 2013 due to their short-term nature. The difference between the fair value and recorded values of the related party notes payable
is not significant.
Cash and Cash
Equivalents
The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.
Concentrations
of Credit Risk
The Company maintains
its cash accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation
("FDIC") with basic deposit insurance coverage limits up to $250,000 per owner. At March 31, 2014 and 2013, the
Company had cash balances of approximately $159,000 and $214,000, respectively. The Company performs ongoing evaluations of these
institutions to limit its concentration risk exposure.
Customers
The Company grants credit
to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues from
international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company's ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at March 31, 2014 and 2013 are net of reserves for doubtful accounts of $24,600 and $8,700,
respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.
The majority of the Company's
customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration of accounts
receivable within these industries, which is subject to normal credit risk. At March 31, 2014, there was one customer that accounted
for 30.6% of net accounts receivable. No other single customer owed us more than 10% of net accounts receivable at March 31, 2014
and 2013. The Company maintains reserves for bad debt and such losses, in the aggregate, historically have not exceeded our estimates.
The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During fiscal years 2014 and 2013, the Company
had revenues from foreign customers of approximately $434,000 and $161,000, respectively, which constituted approximately 16.3%
and 14.6% of total revenues, respectively. For the fiscal year ended March 31, 2014, there was one customer that accounted
for 30.8% of net revenues. No other single customer generated over 10% of net revenues during 2014 and 2013.
Inventories
The Company's inventories
consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned to the Company
with the containers at the culmination of the customer's shipping cycle. Inventories are stated at the lower of cost or current
estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire method.
Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of its inventories
to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs of inventories
are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and finished goods
include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level of inventories
considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories at its
net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic conditions,
customer demand, competition or other relevant factors differ from expectations. These estimates require us to make assessments
about future demand for the Company's products in order to categorize the status of such inventories items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company's forecasts of market conditions,
industry trends, competition and other factors.
37
Property and
Equipment
The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements are similar
to the accounting standard for leases since they convey the right to use the container over a period of time. The Company retains
the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer's shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.
Property and equipment
are recorded at cost. Cryogenic shippers, which comprise of 89% and 87% of the Company's net property and equipment balance
at March 31, 2014 and 2013, respectively, are depreciated using the straight-line method over their estimated useful lives
of three years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally
three to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of
the asset or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful
life of the assets or term of the lease, whichever is shorter and included in depreciation expense.
Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.
Intangible
Assets
Intangible assets are
comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and trademarks,
which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes certain
costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.
Long-lived
Assets
If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets' carrying value, and accordingly, we have not recognized any impairment losses through March 31, 2014.
Deferred Financing
Costs
Deferred financing costs
represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred
financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.
In connection with the
5% bridge notes, during the third and fourth quarter of fiscal 2014, the Company incurred financing costs that have been capitalized
and are being amortized over the term of the convertible bridge notes payable using the straight-line method which approximates
the effective interest method.
Convertible
Debentures
If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature ("BCF"). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.
38
Derivative
Liabilities
Certain of the Company's
issued and outstanding common stock purchase warrants which have exercise price reset features are treated as derivatives for accounting
purposes. The common stock purchase warrants were not issued with the intent of effectively hedging any future cash flow, fair
value of any asset, liability or any net investment in a foreign operation. The warrants do not qualify for hedge accounting, and
as such, all future changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants
are exercised, expire or the related rights have been waived. These common stock purchase warrants do not trade in an active securities
market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model ("Black-Scholes").
Income Taxes
The Company accounts for
income taxes under the provision of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 740,
Income Taxes
, or ASC 740. As of March 31, 2014 and 2013, there were no unrecognized tax benefits
included in the accompanying consolidated balance sheets that would, if recognized, affect the effective tax rates.
Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight of available
evidence, the Company's management has determined that it is more likely than not that the net deferred tax assets will not
be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company's
income tax provision consists of state minimum taxes.
The Company's policy
is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest
or penalties on its consolidated balance sheets at March 31, 2014 and 2013, respectively and has not recognized interest and/or
penalties in the consolidated statement of operations for the years ended March 31, 2014 and 2013. The Company is subject
to taxation in the U.S. and various state jurisdictions. As of March 31, 2014, the Company is no longer subject to U.S. federal
examinations for years before 2010 and for California franchise and income tax examinations for years before 2009. However, to
the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses were generated
and carried forward, and make adjustments up to the amount of the net operating loss carry forward amount. The Company is not currently
under examination by U.S. federal or state jurisdictions.
Revenue Recognition
The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements are similar
to the accounting standard for leases since they convey the right to use the containers over a period of time. The Company retains
title to the containers and provides its customers the use of the container for a specified shipping cycle. At the culmination
of the customer's shipping cycle, the container is returned to the Company.
The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the enclosed materials, and at
the time that collectability is reasonably certain. Revenue is based on gross net of discounts and allowances.
The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel. Revenue is recognized for these
services as services are rendered and at the time that collectability is reasonably certain.
Accounting
for Shipping and Handling Revenue, Fees and Costs
The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying consolidated statements of operations.
Research and
Development Expenses
Expenditures relating
to research and development are expensed in the period incurred.
39
Stock-based
Compensation
The Company accounts for
stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all stock-based
payments to employees and directors, including grants of employee stock options and warrants, to be recognized based upon their
fair values. The fair value of stock-based awards is estimated at grant date using Black-Scholes and the portion that is ultimately
expected to vest is recognized as compensation cost over the requisite service period.
Since stock-based compensation
is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate
to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods
if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in which the
change in estimate occurs. The estimated forfeiture rates at March 31, 2014 and 2013 were zero as the Company had not had
a significant history of forfeitures and does not expect significant forfeitures in the future.
Cash flows from the tax
benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company's loss position, there were no such tax benefits during years ended March 31,
2014 and 2013.
The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company's
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.
Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services
Issuances of the Company's
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn
the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.
Basic and
Diluted Net Income (Loss) Per Share
We calculate basic and
diluted net income (loss) per share using the weighted average number of common shares outstanding during the periods presented,
and adjust the amount of net income (loss) used in this calculation for preferred stock dividends (if any) declared during the
period. In periods of a net loss position, basic and diluted weighted average shares are the same. For the diluted earnings per
share calculation, we adjust the weighted average number of common shares outstanding to include dilutive stock options, warrants
and other common stock equivalents outstanding during the periods.
The following shows the
amounts used in computing net loss per share for each of the years ended March 31, 2014 and 2013 after giving effect to the proposed
8-to-1 reverse stock split:
Years Ended March 31,
2014
2013
Net loss
$
(19,565,426
)
$
(6,382,433
)
Less:
Preferred dividends paid in cash or stock
—
—
Loss attributable to Cryoport stockholders
$
(19,565,426
)
$
(6,382,433
)
Weighted average shares issued and outstanding
6,106,315
4,720,079
Basic and diluted net loss per share
$
(3.20
)
$
(1.35
)
40
The following table sets
forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been anti-dilutive:
Years Ended March 31,
2014
2013
Stock options
432,290
51,471
Warrants
402,716
—
835,006
51,471
Segment Reporting
We currently operate in
one reportable segment.
Fair Value Measurements
We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:
Level 1:
Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level 1 inputs.
Level 2:
Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.
Level 3:
Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3
inputs.
In determining fair value,
we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible, as well as consider counterparty credit risk in the assessment of fair value.
We did not elect the fair
value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value. Therefore,
material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and payable, are
reported at their historical carrying values.
The carrying values of
our assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014 and 2013 are
classified in the table below in one of the three categories of the fair value hierarchy described below. We have no assets or
liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014.
Fair Value Measurements
Level 1
Level 2
Level 3
Total
March 31, 2013
Liabilities:
Derivative liabilities
$
—
$
—
$
20,848
$
20,848
The following summarizes
the activity of Level 3 inputs measured on a recurring basis for the years ended March 31, 2014 and 2013:
Fair Value Measurements of
Unobservable Inputs (Level 3)
Balance at March 31, 2012
$
37,334
Transfers in / (out) of Level 3
—
Adjustments resulting from a change in fair value of derivative liabilities
(16,486
)
Balance at March 31, 2013
20,848
Transfers in / (out) of Level 3
—
Adjustments resulting from a change in fair value of derivative liabilities
(20,848
)
Balance at March 31, 2014
$
—
41
The fair value of derivative
liabilities were measured on their respective origination dates and at the end of each reporting period using Level 3 inputs.
The significant assumptions we use in the calculations under Black-Scholes as of March 31, 2014 and 2013 included an expected term
based on the remaining contractual life of the warrants, a risk-free interest rate based upon observed interest rates appropriate
for the expected term of the instruments, volatility based on the historical volatility of our common stock, and a zero dividend
rate based on our past, current and expected practices of granting dividends on common stock.
Foreign Currency Translation
We record foreign currency
transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included in results
of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.
Recent Accounting Pronouncements
In August 2014, the FASB
issued ASU 2014-15, "Presentation of Financial Statements-Going Concern". Currently, there is no guidance in U.S. GAAP
about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue
as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity's ability
to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards.
Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting
period including interim periods, (3) provide principles for considering the mitigating effect of management's plans, (4)
require certain disclosures when substantial doubt is alleviated as a result of consideration of management's plans, (5)
require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for
a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this
ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. Management is
currently assessing the impact the adoption of ASU 2014-15 will have on our consolidated financial statements.
In May 2014, the FASB
issued ASU No. 2014-09, "Revenue from Contracts with Customers". ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, "Revenue Recognition". The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our consolidated financial statements.
BUSINESS
Overview
We provide cryogenic logistics
solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology and
specialized cold chain logistics knowhow. We view our solutions as disruptive to the "older technologies" of dry ice
and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client's requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.
Our Cryoport Express
®
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal™. The Cryoportal™
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal™ records
and retains a fully documented "chain-of-custody" and, at the client's option, "chain-of-condition"
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.
42
The branded packaging
for our Cryoport Express
®
Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express
®
Shippers. The Cryoport Express
®
Shippers
are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of "dry vapor" liquid nitrogen
("LN2") technology. Cryoport Express
®
Shippers are International Air Transport Association ("IATA")
certified and validated to maintain stable temperatures of minus 150° C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express
®
Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express
®
CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)
Our most used solution
is the "turnkey" solution, which can be accessed directly through our cloud-based Cryoportal™ or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express
®
Shipper to the client
who conveniently loads its frozen commodity into the inner chamber of the
Cryoport
Express
®
Shipper
.  The customer then closes the shipper package and reseals the
shipping box displaying the next recipient's address ("Flap A") for pre-arranged carrier pick up.
Cryoport
arranges for the pick-up of the parcel by a shipping service provider, which is designated by the client or chosen by Cryoport,
for delivery to the client's intended recipient.  The recipient simply opens the shipper package and removes the frozen
commodity that has been shipped.  The recipient then reseals the package, displaying the nearest Cryoport Operations Center
address ("Flap B"), making it ready for pre-arranged carrier pick-up. The When the Cryoport Operations Center receives
the Cryoport Express
®
Shipper, it is cleaned, put through quality assurance testing, and returned to inventory for
reuse.
In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard "Turn-key Solution," described above, we also provide the following
customer facing, value-added solutions to address our various clients' needs:
·
"
Customer
Staged Solution
," designed for clients making 50 or more shipments per month. Under this solution, we supply an
inventory of our Cryoport Express
®
Shippers to our customer, in an uncharged state, enabling our customer (after
training/certification) to charge them with liquid nitrogen and use our Cryoportal™ to enter orders with shipping and delivery
service providers for the transportation of the package. Once the order is released, our customer services professionals monitor
the shipment and the return of the shipper to us for cleaning, quality assurance testing and reuse.
·
"
Customer
Managed Solution
," a limited customer implemented solution whereby we supply our Cryoport Express
®
Shippers to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of
the shipping and delivery service provider and the return of the shipper to us. .
·
"
powered
by Cryoport
SM
," available to providers of shipping and delivery services who seek to offer a "branded"
cryogenic logistics solution as part of their service offerings, with "
powered by Cryoport
SM
" appearing
prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements,
such as minimum required shipping volumes.
·
"
Integrated
Solution,
"
which is our outsource solution. It is our most comprehensive solution and involves our management
of the entire cryogenic logistics process for our client, including Cryoport employees at the client's site to manage the
client's cryogenic logistics function in total.
·
"
Regenerative
Medicine Point-of-Care Repository Solution,
" designed for allogeneic therapies. In this model we supply our Cryoport
Express
®
Shipper to ship and store cryogenically preserved life science products for up to 6 days (or longer periods
with supplementary shippers) at a point-of-care site, with the Cryoport Express
®
Shipper serving as a temporary
freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies
without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service
professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport
Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through quality assurance testing,
and returned to inventory for reuse.
43
·
"
Personalized
Medicine and Cell-based Immunotherapy Solution,
" designed for autologous therapies. In this model our Cryoport Express
®
Shipper serves as an enabling technology for the safe transportation of manufactured autologous cellular-based immunotherapy
market by providing a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the
collection of the patient's cells in a hospital setting, to (b) a central processing facility where they are manufactured
into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care
treatment facility.  If required, the Cryoport Express
®
Shipper can then serve as a temporary freezer/repository
to allow the efficient distribution of this personalized medicine to the patient when and where the medical provider needs it
most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer services
professionals monitor each shipment throughout the predetermined process, including the return of the shipper to us. When the
Cryoport Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through quality assurance
testing, and returned to inventory for reuse.
Strategic Logistics
Alliances
We have sought to establish
strategic alliances as a method of marketing our solutions providing minus 150° C shipping conditions to the life sciences
industry. We have focused our efforts on leading companies in the logistics services industry as well as participants in the life
sciences industry. In connection with our alliances with providers of shipping services, we refer to their offerings as "
powered
by Cryoport
SM
" to reflect our solutions being integrated into our alliance partner's services.
Cryoport now serves and
supports the three largest integrators in the world, responsible for over 85% of worldwide airfreight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.
FedEx.
In January
2013, we entered into a master agreement with Federal Express Corporation ("FedEx") (the "FedEx Agreement")
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal
TM
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days' notice.
Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport's services for frozen temperature-controlled cold chain transportation
as its FedEx
®
Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx's
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal
TM
software
platform, which is "
powered by Cryoport
SM
" for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.
DHL.
In June 2014,
we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding ("DHL"). This relationship with
DHL is a further implementation of the Company's expansion of distribution partnerships under the "
powered by Cryoport
SM
"
model described above, allowing us to expand our sales and marketing reach through our partners and build awareness of the benefits
of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold chain logistics offerings to its life
sciences and healthcare customers with Cryoport's validated cryogenic solutions. DHL added 15 additional certified Life Sciences
stations in the second quarter of 2014 bringing the Thermonet network to 60 stations in operation. Over the course of rolling out
our new relationship, this expanded network will offer Cryoport's cryogenic solutions under the DHL brands as "
powered
by Cryoport
SM
". In addition, DHL's customers will be able to have direct access to our cloud-based order
entry and tracking portal to order Cryoport Express
®
Solutions and receive preferred DHL shipping rates and discounts.
Our proprietary logistics management operating platform, the Cryoportal
TM
, is integrated with DHL's tracking and
billing systems to provide DHL life sciences and healthcare customers with a seamless way of accessing critical information regarding
shipments of biological material worldwide.
UPS.
In October
2014, we added United Parcel Services, Inc. ("UPS") as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company's
expansion of distributors under the "
powered by Cryoport
SM
" model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.
44
Over the course of rolling
out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal to
order Cryoport Express
®
Solutions and gain access to UPS's broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal
TM
,
is integrated with UPS's tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.
These agreements the three
largest integrators in the world represent a significant validation of our solutions and the way we conduct our business.
Life Sciences Agreements
Zoetis.
In December 2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport provides on-site
logistics personnel and its logistics management operating platform, the Cryoportal
TM
to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce economies
and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time and with
the optimum utilization of resources. The Company manages Zoetis' total fleet of dewar flask shippers used for this purpose,
including liquid nitrogen shippers. In July 2013 the agreement was amended to expand Cryoport's scope to manage all logistics
of Zoetis' key frozen poultry vaccine to all Zoetis' international distribution centers as well as all domestic shipments.
In October 2013, the agreement was further amended to further expand Cryoport's role to include the logistics management
for a second poultry vaccine.
Liventa Biosciences.
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. ("Liventa"), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport's Regenerative Medicine
Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express
®
Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport's proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa's distribution capability to orthopedic care providers.
The implementation of Cryoport's Regenerative Medicine
Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express
®
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.
In summary, we serve
the life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.
Corporate History and
Structure
We are a Nevada corporation
originally incorporated under the name G.T.5-Limited ("GT5") on May 25, 1990. In connection with a Share Exchange
Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired all of the issued and outstanding shares of
common stock of Cryoport Systems, Inc., a California corporation, in exchange for 301,352 shares of our common stock (which represented
approximately 81% of the total issued and outstanding shares of common stock following the close of the transaction). Cryoport
Systems, Inc., which was originally formed in 1999 as a California limited liability company, and subsequently reorganized into
a California corporation on December 11, 2000, remains the operating company under Cryoport, Inc. Our principal executive
offices are located at 20382 Barents Sea Circle, Lake Forest, CA 92630. The telephone number of our principal executive offices
is (949) 470-2300, and our main corporate website is www.cryoport.com. The information on, or that can be accessed through our
website is not part of this prospectus.
The Company became public
by a reverse merger with a shell company in May 2005. Over time the Company has transitioned from being a development company to
a fully operational public company, providing cold chain logistics solutions to the biotechnology and life sciences industries
globally.
45
Since fiscal year 2011,
the Company has taken significant steps towards commercialization of the Cryoport Express
®
logistics solutions in
validating, perfecting and expanding its features. The Company has now managed shipments of its Cryoport Express
®
Shippers
through its Cryoportal
TM
into and out of more than 80 countries, handling a vast array of different biological products
and specimens.
During fiscal year 2012,
the Company completed the external validation of its Cryoport Express Standard Shipper to ISTA 7E standards and introduced the
Cryoport Express
®
High Volume Shipper in response to customer demand. The Company also set up its European distribution
depot in Holland to better serve its customer base and support sales efforts in Europe.
During fiscal year 2013,
the Company elected Jerrell Shelton as President and CEO, realigned its sales team and introduced a solutions sales and operating
strategy. In addition, and as part of its global expansion plans, the Company set up its Asian distribution depot in Singapore.
Since the beginning of
fiscal year 2014, the Company's Board of Directors ("Board") has added certain members to better align the experience
and competencies of the directors with the Company's strategic direction. In March 2013, Richard G. Rathmann, a fund manager,
investor, and advisor to life science companies over the past 20 years, was appointed to the Board.  In September 2013, Mr. Rathmann
was elected Chairman of the Board. Also in September 2013, Mr. Edward Zecchini, an executive with more than thirty years of
experience in the healthcare and information technology industries was appointed to the Board. In June 2014, Dr. Ramkumar Mandalam
was appointed to the Board. Dr. Mandalam has more than twenty years of experience in the development of biologics and is currently
the President and Chief Executive Officer of Cellerant Therapeutics, Inc., a clinical-stage biotechnology company. Most recently,
in January 2015, Richard Berman was appointed to the Board. Mr. Berman's business career consists of more than 35 years
of venture capital, management and merger and acquisitions experience. The Company's remaining Board member, Jerrell Shelton,
the President and Chief Executive Officer of Cryoport, joined the Board in October 2012. The Company's five person Board
has four independent Board members, as determined by NASDAQ Rule 5605(a)(2) and the related rules of the Securities and Exchange
Commission.
Cryoport Express
®
Solutions
Our Cryoport Express
®
Solutions are currently made up primarily of the Cryoportal™ software platform, Cryoport Express
®
Shippers,
Cryoport Express® Smart Pak data loggers and our life sciences cold chain logistics expertise. Cryoport Express
®
Solutions are focused on improving the reliability of frozen shipping while reducing our clients' overall operating costs.
This is accomplished by providing complete end-to-end solutions for the transport and monitoring of frozen or cryogenically preserved
biological or other materials shipped primarily through distribution partners, such as FedEx, UPS, and DHL, and specialty couriers.
The information technology
is centered on a cryogenic logistics operating platform called the Cryoportal
TM
. The Cryoportal
TM
is a cloud-based
cryogenic logistics operating platform. Among its functions, the Cryoportal
TM
programmatically assists in the management
of all aspects of the logistics operations beginning with order entry and continuing to monitor, log data, track shipments and
store vital information. The Cryoportal
TM
is capable of producing a variety of Cryoport Express
®
Analytics
which report shipment performance metrics and evaluates temperature-monitoring data collected by the Cryoport Express
®
Smart Pak during shipment.
Cryoport Express
®
Solutions are focused on improving the reliability of cryogenic logistics while reducing our clients' overall operating costs.
This is accomplished by providing tailored and complete end-to-end solutions for cryogenic logistics requirements including management,
transport, monitoring and data collection regarding frozen/cryogenically preserved biological commodities or pharmaceutical materials
shipped primarily though integrators and Cryoport's logistics network which includes specialty couriers, brokers and other
intermediaries. Certain of the intellectual property underlying our Cryoport Express
®
Solutions, other than that
related to the Cryoport Express
®
Shippers, has been, and continues to be, developed under a contract with an outside
software development company, with the underlying technology licensed to Cryoport for exclusive use in our field of use.
Cryoportal
TM
The Cryoportal
TM
is used by Cryoport, our clients and business partners to automate the entry of orders, prepare customs documentation and
to facilitate status and location monitoring of shipped orders while in transit. It is used by Cryoport to assist in managing logistics
operations and to reduce administrative costs typically provisioned through manual labor relating to order-entry, order processing,
preparation of shipping documents and back-office accounting. It is also used to support the high level of customer service expected
by the industry. Certain features of the Cryoportal
TM
reduce operating costs and facilitate the scaling of Cryoport's
business, but more importantly they offer significant value to the customer in terms of cost avoidance and risk mitigation. Examples
of these features include automation of order entry, development of Key Performance Indicators ("KPI's") to support
our efforts for continuous process improvements in our business, and programmatic exception monitoring to detect and sometimes
anticipate delays in the shipping process, often before the customer or the shipping company becomes aware of them.
46
The Cryoportal
TM
also serves as the communications center for the management, collection and analysis of Smart Pak data collected from Smart
Pak data loggers in the field. Data is converted into pre-designed reports containing valuable and often actionable information
that becomes the quality control standard or "pedigree" of the shipment. This information can be utilized by Cryoport
to provide valuable feedback to our clients relating to their shipments.
The Cryoportal™
software platform has been developed as a "carrier-agnostic" system, allowing the client and the Cryoport Client Care
team to work with a single or multiple integrators, freight forwarders, couriers and/or brokers depending on the specific requirements
and client preferences. To increase operational efficiencies, Cryoportal™ has already been integrated with the tracking systems
of FedEx, DHL and UPS and we plan to integrate it with other key logistics providers.
The Cryoportal
TM
was developed for time- and temperature-sensitive shipments that are required to be maintained at specific temperatures,
such as ambient (between 20° and 25°C), chilled (between 2° and 8°C) or frozen (minus 10°C or less all the
way down to cryogenic temperatures (minus 150°C) to ensure that the shipped specimen is not subject to degradation or out of
its designated "safe" range. While our current focus is on cryogenic logistics within the life sciences industry using
the logistics solutions described herein, the use of the Cryoportal
TM
can and may be extended into other temperature
ranges of the cold chain.
To our knowledge, the
Cryoportal™ software platform is unique to cold chain logistics in the life sciences industry. It is robust and has considerable
capabilities. We frequently are complimented about the Cryoportal™ and our strategic alliance partners chose to license the
Cryoportal™ rather than attempt to duplicate its features in their logistics management software. We have engineered in a
way that gives us the ability to offer the "
powered by Cryoport
SM
" strategy to our strategic alliance
partners.
The Cryoport
Express
®
Shippers
Our Cryoport Express
®
Shippers are cryogenic dry vapor shippers capable of maintaining cryogenic temperatures of minus 150° Celsius or below
for a dynamic shipping period of 10 or more days. A dry vapor cryogenic shipper is a device that uses liquid nitrogen contained
inside a vacuum insulated vessel which serves as a refrigerant to provide stable storage temperatures below minus 150° Celsius.
Our Cryoport Express
®
Shippers are designed to ensure that there is no pressure build up as the liquid nitrogen
evaporates. We have developed a proprietary retention system to ensure that liquid nitrogen stays inside the vacuum container,
which allows the shipper to be designated as a dry vapor shipper meeting IATA requirements. Biological or pharmaceutical specimens
are stored in a specimen chamber, referred to as a "well" inside the container and refrigeration is provided by gas
evolving from the liquid nitrogen entrapped within the proprietary retention system. Specimens that may be transported using our
cryogenic shipper include: live cells, scientific or pharmaceutical commodities such as cancer vaccines, diagnostic materials,
semen, eggs, embryos, infectious substances, and other commodities that require continuous exposure to frozen/cryogenic temperatures,
i.e., temperatures below minus 150° Celsius.
An important feature of
our Cryoport Express
®
Shippers, except for the newly introduced Cryoport Express
®
CXVC1 Shipper,
is their compliance with the stringent packaging requirements of IATA Packing Instructions 602 and 650, respectively. These specifications
include meeting internal pressure (hydraulic) and drop performance requirements. Under IATA guidelines, Cryoport Express
®
Shippers are classified as "Non-hazardous." Dry ice and liquid nitrogen are classified as "Dangerous Goods."
Our shippers are also in compliance with International Civil Aviation Organization ("ICAO") regulations that prohibit
egress of liquid nitrogen residue from the shipping packages. The ICAO is a United Nations organization that develops regulations
for the safe transport of dangerous goods by air.
We currently offer three
sizes of dry vapor shippers, the Cryoport Express
®
Standard Shipper with a storage capacity of up to 75 2.0 ml vials,
the Cryoport Express
®
High Volume Shipper, which has a storage capacity of up to 500 2.0 ml vials, and the Cryoport
Express
®
CXVC1 Shipper, introduced in August 2014, which has a storage capacity of up to 1,500 2.0 ml vials. Our
Cryoport Express® Shippers are composed of an aluminum (aircraft-grade) dewar flask, containing a well for holding the high
value biological or other materials in its inner chamber and our proprietary retention foam that absorbs the liquid nitrogen placed
in the shipper to provide it with its extreme cold temperature. The dewar flask is vacuum insulated to limit the transmission of
heat from outside the flask to the liquid nitrogen captured within the absorption foam and the well.
47
Cryoport Express
®
Standard Shippers
The Cryoport Express
®
Standard Shippers are lightweight, low-cost, re-usable dry vapor liquid nitrogen storage containers that, we believe, combine
the best features of life sciences packaging, cryogenics science and vacuum insulation technology. A Cryoport Express
®
Standard Shipper is composed of an aluminum metallic dewar flask, with a well for holding the biological material in the inner
chamber. The dewar vessel is a device in which the conduction, convection and radiation of heat are reduced as much as possible
giving it the capability of maintaining its contents at a near-constant temperature over relatively long periods of time. The inner
chamber of the shipper is surrounded by a high surface, low-density material which retains the liquid nitrogen in-situ by absorption,
adsorption, and surface tension. Absorption is defined as the taking up of matter in bulk by other matter, as in the dissolving
of a gas by a liquid, whereas adsorption is the surface retention of solid, liquid or gas molecules, atoms or ions by a solid or
liquid. This material absorbs liquid nitrogen several times faster than currently used materials, while providing the shipper with
a hold time and capacity to transport biological materials safely and conveniently. The annular space between the inner and outer
dewar walls is evacuated to a very high vacuum (10
-6
Torr). The specimen-holding chamber has
a primary cap to enclose the specimens/commodities, and a removable and replaceable secondary cap to further enclose the specimen/commodity-holding
container and to contain the liquid nitrogen dry vapor. The entire dewar vessel is then wrapped in a plurality of insulating and
cushioning materials and placed in a disposable outer packaging made of recyclable material. The Cryoport Express
®
Standard
Shippers has a storage capacity of up to 75 2.0 ml vials.
The technology underlying
the Cryoport Express
®
Standard Shipper is under constant refinement to further improve its performance and reliability.
Our current shippers use aircraft grade aluminum and other lower weight materials, reducing freight cost which is based on dimensional-weight.
We maintain ongoing development efforts related to our shippers that are principally focused on material properties, particularly
those properties related to our low-temperature requirement, vacuum retention characteristics, such as the permeability of the
materials, and lower weight materials in an effort to meet the life sciences market requirements for achieving the most reliable,
lowest cost, frozen and cryogenic logistic solutions.
Cryoport Express
®
High Volume Shippers
The Cryoport Express
®
High Volume Shipper also uses a dry vapor liquid nitrogen (LN2) technology to maintain minus 150° C temperatures with
a dynamic shipping endurance of 10 days. The Cryoport Express
®
High Volume Shipper is based on the same dry vapor
technology as Cryoport's original standard dry shipper and utilizes an absorbent material to hold LN2, thus providing
the extended endurance time and IATA validation as a non-hazardous shipping container. The high volume dry shipper is reusable
and recyclable, making it a highly sustainable and cost effective method of transporting life science materials. The Cryoport
Express
®
High Volume Shipper has a storage capacity of up to 500 2.0ml vials.
Cryoport Express
®
CXVC1 Shippers
The Cryoport Express
®
CXVC1 Shipper is our largest shipper and can be used either as a dry vapor shipper or a liquid shipper. It is designed to
focus on vaccine ampoules or cryovial shipments in canisters. In the case of dry vapor liquid nitrogen (LN2), it maintains minus
150° C temperatures with a dynamic shipping endurance of 20 days. In the case of liquid nitrogen (LN2), it maintains minus
150° C temperatures with a shipping endurance of 72 days. The Cryoport Express
®
CXVC1 Shipper, in dry vapor
form, is based on the same technology as Cryoport's original standard dry shipper and utilizes an absorbent material to hold
LN2, thus providing the extended endurance time and IATA validation as a non-hazardous shipping container. The Cryoport Express
®
CXVC1 Shipper, in liquid form, is a straightforward wet dewar with all the characteristics attendant to a wet dewar and with a
holding time of 72 days. The Cryoport Express
®
CXVC1 Shipper is reusable and recyclable, making it a highly sustainable
and cost effective method of transporting life science materials. As a point of reference, the Cryoport Express
®
CXVC1 Shipper has a storage capacity of up to 1,500 0.2ml vials.
Cryoport Express
®
Shipper Summary
We believe Cryoport Express
®
Solutions are the best and most cost effective solution available in the biotechnology and life sciences markets and satisfy customer
needs and scientific and regulatory requirements relating to the shipment of time- and temperature-critical, frozen and refrigerated
transport of biological materials, such as stem cells, cell lines, pharmaceutical clinical trial samples, gene biotechnology, infectious
materials handling, animal and human reproduction markets. Due to our proprietary technology and innovative design, our shippers
are less prone to losing functional hold time when not kept in an upright position than the competing products because our proprietary
dry vapor technology and innovative design prevent the spilling or leakage of the liquid nitrogen when the container is tipped
or on its side which would otherwise adversely affect the functional hold time of the shipper.
48
The Cryoport
Express
®
Smart Pak Temperature Monitoring System
Temperature monitoring
is a high-value feature from our client's perspective as it is an effective and reliable method to determine that the shipment
materials were not damaged and did not experience degradation during shipment due to temperature fluctuations. Our Smart Pak System
consists of a self-contained automated data logger and thermocouple capable of recording cryogenic temperatures of samples shipped
in our Cryoport Express
®
Shippers. The data-logging temperature probe is positioned within the shipper to record
the most accurate reading. The resultant temperature mapping includes both the temperature inside the chamber (which is closest
to the actual biomaterial) and the external temperature. This reading, combined with the mapping of shipment check-in points, can
provide a holistic view of the complete shipping process. At the client's election, shipments can have a full chain-of-custody
and chain-of-condition with data monitoring, analysis, archival storage available.
Chain-of-Condition
Chain-of-Condition information
is essential for many life sciences materials, for laboratories and in some cases for compliance with regulatory authorities. Data
monitoring starts with our custom built data logger (the Cryoport Express
®
Smart Pak). The Cryoport Express®
Smart Pak can be set up to report during a shipment and/or after the shipment. For those shipments involving biologics, clinical
trials or any other material that needs to be verified before receiving, the information recorded by the data logger can be downloaded
to the data station onsite. Alternatively, Cryoport can upload the temperature data from the Cryoport Express® Smart Pak for
analysis to the Cryoportal upon return of the shipper. The report from the data monitor serves as analysis for temperature monitoring
of the entire shipment as well as a tamper warning. The Cryoportal™ also acts as the data repository for all shipment and
temperature information, which the customer can access remotely through the Internet. Chain of condition service provided via Cryoport
Express
®
Smart Pak is available at the client's election.
Chain-of-Custody
When overlaid with the
carrier check-ins, the data monitor and analysis also provides a chain of custody. The report from the data monitor serves as analysis
for temperature monitoring of the entire shipment as well as a tampering warning. If the client has elected to have chain of condition
monitoring, each time the container is opened there is a temperature record. The report identifies outlier temperature excursions
such as opening the shipment in customs or tampering and thus will allow for more conclusive investigations to ensure that specimens
were not adversely impacted during shipment.
Cryoport Express
®
Analytics
Cryoport Express
®
Analytics information is captured by the Cryoportal™ to provide us and our customers access to important information from
the shipments recorded in the Cryoportal™ to assist in management of our customers' shipping. For us, we use the information
to support planned future features to allow for an expansion of our solutions offering. Analytics is a term used by IT professionals
to refer to performance benchmarks or Key Performance Indicators ("KPI's") that management utilizes to measure
performance against desired standards. Examples for analytics tracked through the Cryoportal™ include time-based metrics
for order processing time and on-time deliveries by our shipping partners, as well as profiling shipping lanes to determine average
transit times and predicting potential shipping exceptions based on historical metrics. The analytical results are being utilized
by Cryoport to render consultative and proactive client services.
Biological Material
Holders
A patented containment
bag is used in connection with the shipment of infectious or dangerous goods using the Cryoport Express
®
Shippers.
Up to 75 cryovials (polypropylene vials with high-density polyethylene closures), set on aluminum canes are placed into an absorbent
pouch, which is designed to contain the entire contents of all the vials in the event of leakage. This pouch is then placed in
a watertight Tyvek bag (secondary packaging) capable of withstanding cryogenic temperatures, and then sealed. This bag is then
placed into the well of the Cryoport Express
®
Shipper.
Logistics Expertise
and Support
Cryoport's client
services professionals provide 24/7/365 live logistics and monitoring services with specialized knowledge in the domestic and global
logistics of life sciences material requiring cryogenic temperatures. The Cryoport logistics professionals have validated shipping
lanes in and out of more than 80 countries to date to ensure shipments maintain cryogenic temperatures and arrive securely and
on time.
49
Other Development
Activities
We are continuing our
research and development efforts to further refine our current technology as well as explore opportunities with partners to offer
complementary packaging solutions for frozen temperature (minus 10° Celsius or less), chilled temperature (2° to 8°
Celsius) and ambient temperature (between 20° and 25° Celsius) shipping markets.
We also continue to further
expand the functionality of our Cryoportal
TM
to ensure a high level of effectiveness and efficiency in the cold chain
logistics process and to allow for intelligent and easy data monitoring and analysis.
Government Regulation
The shipping of diagnostic
specimens, infectious substances and dangerous goods, whether via air or ground, falls under the jurisdiction of many state, federal
and international agencies. The quality of the containers, packaging materials and insulation that protect a specimen determine
whether or not it will arrive in a usable condition. Many of the regulations for transporting dangerous goods in the United States
are determined by international rules formulated under the auspices of the United Nations.
The International Civil
Aviation Organization ("ICAO") is the United Nations organization that develops regulations (Technical Instructions)
for the safe transport of dangerous goods by air. If shipment is by air, compliance with the rules established by International
Air Transport Association ("IATA") is required. IATA is a trade association made up of airlines and air cargo couriers
that publishes annual editions of the IATA Dangerous Goods Regulations. These regulations interpret and add to the ICAO Technical
Instructions to reflect industry practices. Additionally, the Centers for Disease Control ("CDC") has regulations (published
in the Code of Federal Regulations) for interstate shipping of specimens, and OSHA also addresses the safe handling of Class 6.2
Substances.
Our Cryoport Express
®
Shippers meet Packing Instructions 602 and 650 and are certified for the shipment of Class 6.2 Dangerous Goods per the requirements
of the ICAO Technical Instructions for the Safe Transport of Dangerous Goods by Air and IATA. Our present and planned future versions
of the Cryoport Smart Pak data logger will likely be subject to regulation by the FAA, FCC, FDA, IATA and possibly other agencies
which may be difficult to determine on a global basis.
We are also subject to
numerous other federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs
to comply with such laws and regulations now or in the future.
Manufacturing and Raw
Materials
Manufacturing
.
Due to our currently adequate levels of dewar inventories, manufacturing is currently suspended. The component parts for our shippers
are primarily manufactured at third party manufacturing facilities. We also have a warehouse at our facility in Lake Forest, California,
where we are capable of manufacturing certain parts and to fully assemble our shippers. Most of the components that we use in the
manufacture of our shippers are available from more than one qualified supplier. For some components, however, there are relatively
few alternate sources of supply and the establishment of additional or replacement suppliers may not be accomplished immediately,
however, we have identified alternate qualified suppliers. Should this occur, we believe that with our current level of shippers,
we have enough inventory to cover our forecasted demand.
There are no specific
agreements with any manufacturer nor are there any long term commitments to any manufacturer. We believe that most of the manufacturers
currently used by us could be replaced within a short period of time as none have a proprietary component or a substantial capital
investment specific to our shippers.
Our production and manufacturing
process incorporates innovative technologies developed for aerospace and other industries which are cost effective, easier to use
and more functional than the traditional dry ice devices and other methods currently used for the shipment of temperature-sensitive
materials. Our manufacturing process uses non-hazardous cleaning solutions, which are provided and disposed of by a supplier approved
by the Environmental Protection Agency (the "EPA"). EPA compliance costs for us are therefore negligible.
Cryoport Express
®
High Volume Shippers are purchased from a third party and modified to meet our specifications using our proprietary technology
and know-how.
50
Our data loggers have
been acquired from a single source with the calibration done by an independent third party. We are currently considering adding
alternate data loggers with greater range of functionality.
Raw Materials
.
Various common raw materials are used in the manufacture of our shippers and in the development of our technologies. These raw
materials are generally available from several alternate distributors and manufactures. We have not experienced any significant
difficulty in obtaining these raw materials and we do not consider raw material availability to be a significant factor in our
business.
Patents and Proprietary
Rights
In order to remain competitive,
we must develop and maintain protection on the proprietary aspects of our technologies. We rely on a combination of patents, copyrights,
trademarks, trade secret laws and confidentiality agreements to protect our intellectual property rights. We currently own three
registered U.S. trademarks and three issued U.S. patents primarily covering various aspects of our Cryoport Express
®
Shippers.
In addition, we have a
pending U.S. patent application for various aspects of our shipper and web-portal, which includes, in part, various aspects of
our business model referred to as the Cryoport Express® System. We have also filed a U.S. provisional patent application for
a smart label which will communicate electronically with our data logger. We intend to file additional patent applications to strengthen
our intellectual property rights.
The technology covered
by the above indicated issued patents relates to matters specific to the use of liquid nitrogen shippers in connection with the
shipment of biological materials. The concepts include those of disposability, package configuration details, liquid nitrogen retention
systems, systems related to thermal performance, systems related to packaging integrity, and matters generally relevant to the
containment of liquid nitrogen. Similarly, the trademarks mentioned relate to the cryogenic temperature shipping activity. Issued
patents and trademarks currently owned by us and a patent application include:
Type:
No.
Issued
Expiration
Patent
6,467,642
Oct. 22, 2002
Jan. 2, 2021
Patent
6,119,465
Sep. 19, 2000
Feb. 10, 2019
Patent
6,539,726
Apr. 1, 2003
May 8, 2021
Patent Application
12/656,641
Trademark
3,569,471
Feb. 3, 2009
Feb. 3, 2019
Trademark
3,589,928
Mar. 17, 2009
Mar. 17, 2019
Trademark
2,632,328
Oct. 8, 2002
Oct. 8, 2022
Our success depends in
part upon our ability to develop proprietary products and technologies and to obtain patent coverage for these products and technologies.
We intend to file trademark and patent applications covering any newly developed products, methods and technologies. However, there
can be no guarantee that any of our pending or future filed applications will be issued as patents. There can be no guarantee that
the U.S. Patent and Trademark Office or some third party will not initiate an interference proceeding involving any of our pending
applications or issued patents. Finally, there can be no guarantee that our issued patents or future issued patents, if any, will
provide adequate protection from competition.
Patents provide some degree
of protection for our proprietary technology. However, the pursuit and assertion of patent rights involve complex legal and factual
determinations and, therefore, are characterized by significant uncertainty. In addition, the laws governing patent issuance and
the scope of patent coverage continue to evolve. Moreover, the patent rights we possess or are pursuing generally cover our technologies
to varying degrees. As a result, we cannot ensure that patents will issue from any of our patent applications, or that any of its
issued patents will offer meaningful protection. In addition, our issued patents may be successfully challenged, invalidated, circumvented
or rendered unenforceable so that our patent rights may not create an effective barrier to competition. Moreover, the laws of some
foreign countries may not protect our proprietary rights to the same extent as the laws of the United States. There can be no assurance
that any patents issued to us will provide a legal basis for establishing an exclusive market for our products or provide us with
any competitive advantages, or that patents of others will not have an adverse effect on our ability to do business or to continue
to use our technologies freely.
We granted a first priority
security interest in generally all of our assets, including our intellectual property, to secure the repayment of the 7% Bridge
Notes.
51
We may be subject to third
parties filing claims that our technologies or products infringe on their intellectual property. We cannot predict whether third
parties will assert such claims against us or whether those claims will hurt our business. If we are forced to defend against such
claims, regardless of their merit, we may face costly litigation and diversion of management's attention and resources. As
a result of any such disputes, we may have to develop, at a substantial cost, non-infringing technology or enter into licensing
agreements. These agreements may be unavailable on terms acceptable to such third parties, or at all, which could seriously harm
our business or financial condition.
We also rely on trade
secret protection of our intellectual property. We attempt to protect trade secrets by entering into confidentiality agreements
with third parties, employees and consultants, although, in the past, we have not always obtained such agreements. It is possible
that these agreements may be breached, invalidated or rendered unenforceable, and if so, our trade secrets could be disclosed to
our competitors. Despite the measures we have taken to protect our intellectual property, parties to such agreements may breach
confidentiality provisions in our contracts or infringe or misappropriate our patents, copyrights, trademarks, trade secrets and
other proprietary rights. In addition, third parties may independently discover or invent competitive technologies, or reverse
engineer our trade secrets or other technology. Therefore, the measures we are taking to protect our proprietary technology may
not be adequate.
Customers and Distribution
As a result of growing
globalization, including such areas as biotechnology and life science, clinical trials, distribution of pharmaceutical products
and reproductive medicine, the requirement for effective and reliable solutions for keeping clinical samples, pharmaceutical products
and other specimen at frozen temperatures takes on added significance due to more complex shipping routes, extended shipping times,
custom delays and logistics challenges. Today, such specimens are traditionally shipped in styrofoam cardboard insulated containers
packed with dry ice, gel/freezer packs or a combination thereof. The current dry ice solutions have limitations that severely limit
their effective use for both short and long-distances (e.g., international). Conventional dry ice shipments often require labor-intensive
"re-icing" operations resulting in higher labor and shipping costs.
We believe our patented
Cryoport Express
®
Shippers, the Cryoportal™ and our logistics expertise make us well positioned to take advantage
of the growing demand for effective and efficient international transport of temperature sensitive materials resulting from continued
globalization. Of particular significance is the trend within the life sciences and biotechnology industries toward globalization.
We provide domestic shipping
solutions in situations where specimens must be kept at frozen temperatures and in regions where there is a high priority placed
on maintaining the integrity of materials shipped at these temperatures.
Pharmaceutical Clinical
Trials
. Every United States based pharmaceutical company developing a new drug must seek drug development protocol approval
by the FDA. These clinical trials are to test the safety and efficacy of the potential new drug among other things. A significant
amount of clinical trial activity is managed by a number of large Clinical Research Organizations ("CROs").
In connection with the
clinical trials, due to globalization, companies can be enrolled from all over the world and may need to regularly submit a blood
or other specimen at the local hospital, doctor's office or laboratory. These samples are then sent to specified testing
laboratories, which may be local or in another country. The testing laboratories will typically set the requirements for the storage
and shipment of blood specimens. In addition, drugs used by the patients may require frozen shipping to the sites of the clinical
trials. While both domestic and international shipping of these specimens is accomplished using dry ice today, international shipments
especially present several problems, as dry ice, under the best of circumstances, can only provide freezing for one to two days
in the absence of re-icing (which is quite costly). Because shipments of packages internationally can take longer than one to two
days or be delayed due to flight cancellations, incorrect destinations, labor problems, ground logistics, customs delays and safety
reasons, dry ice is not always a reliable and/or cost effective option. Clinical trial specimens are often irreplaceable because
each one represents clinical data at a prescribed point in time, in a series of specimens on a given patient, who may be participating
in a trial for years. Sample integrity during the shipping process is vital to retaining the maximum number of patients in each
trial. Our shippers are ideally suited for this market, as our longer hold time ensures that specimens can be sent over long distances
with minimal concern that they will arrive in a condition that will cause their exclusion from the trial. There are also many instances
in domestic shipments where Cryoport Express
®
Shippers will provide higher reliability and be cost effective.
Furthermore, the IATA
requires that all airborne shipments of laboratory specimens be transmitted in either IATA Instruction 650 or 602 certified packaging.
We have developed and obtained IATA certification of our Cryoport Express
®
System, which is ideally suited for this
market, in particular due to the elimination of the cost to return the reusable shipper.
52
Biotechnology and Diagnostic
Companies
. The biotechnology market includes basic and applied research and development in diverse areas such as stem cells,
cloning, gene therapy, DNA tumor vaccines, tissue engineering, genomics, and blood products. Companies participating in the foregoing
fields rely on the frozen transport of specimens in connection with their research and development efforts, for which our Cryoport
Express
®
Shippers are ideally suited.
Cell Therapy Companies.
Rapid advancements are underway in the research and development of cell based therapies, which involve cellular material being
injected into a patient. In allogeneic cell therapy, the donor is a different person to the recipient of the cells. Autologous
cell therapy is a therapeutic intervention that uses an individual's cells, which are cultured and expanded outside the body,
and reintroduced into the donor. Once cells are processed, in either case, they must be shipped cryogenically for which our Cryoport
Express
®
Shippers are ideally suited.
Central Laboratories.
With the increase and globalization of clinical studies and trials, logistics has become more complex and ensuring sample integrity
has become more challenging. International courier costs are now consuming a significant portion of global protocol budgets. We
believe laboratories performing the testing of samples collected during the conduct of these global multi-site studies are looking
for reliable state-of-the-art logistics solutions.
Pharmaceutical Distribution
.
The current focus for the Cryoport Express
®
System also includes the area of pharmaceutical distribution. There
are a significant number of therapeutic drugs and vaccines currently or anticipated soon to be undergoing clinical trials. After
the FDA approves them for commercial marketing, it will be necessary for the manufacturers to have a reliable and economical method
of distribution to the physician who will administer the product to the patient. It is likely that the most efficient and reliable
method of distribution will be to ship a single dosage to the administering physician. These drugs are typically identified to
individual patients and therefore will require a complete tracking history from the manufacturer to the patient. The most reliable
method of doing this is to ship a unit dosage specifically for each patient. If such drugs require maintenance at frozen or cryogenic
temperatures, each such shipment will require a frozen or cryogenic shipping package. Cryoport can provide the technology to meet
this anticipated need.
Distribution of Vaccines
and Biologic Therapies.
There are a variety of vaccines and other drugs or therapies that require distribution at frozen or
cryogenic temperatures. We anticipate significant growth in this area, in particular therapies based upon stem cells. It is likely
that the most efficient and reliable method of distribution will be to ship a single dosage or a limited supply to the physician
for administration to a patient.
In February 2013, we started
providing comprehensive logistics management services for the lead poultry vaccine distribution of Zoetis, Inc. In October 2013,
Zoetis engaged us to manage distribution of an additional vaccine.
One of our strategic alliance
partners, Liventa Bioscience, Inc., is, in part, basing its business strategy on using our Cryoport Express
®
Shippers
to deliver supplies of cell-based therapies to physicians, which will be able to keep the shippers at the physician's facility
for up to one week and thus avoid the need to invest in costly cryogenic refrigeration equipment for commodity storage. With the
inclusion of our Cryoport Express
®
Smart Pak data logger, Liventa and the physician will have assurance that cryogenic
temperatures were maintained within the shipper.
Fertility Clinics and
In Vitro Fertilization ("IVF")
. Maintaining cryogenic temperatures during shipping and transfer of in vitro fertilization
specimens like eggs, sperm, or embryos is critical for cell integrity in order to retain viability, stabilize the cells, and ensure
reproducible results and successful IVF treatment. There are approximately 3,300 fertility clinics worldwide. Cryoport anticipates
that this market will continue to grow; in the United States alone, the fertility market has grown to more than $4.0 billion with
over 1.3 million women seeking treatment each year. In the worldwide market, it is reported that there are more than one billion
IVF cycles per year and growing.
Sales and Marketing
We currently have two
sales directors in the United States, one sales director in Europe, one inside sales representative focused on Reproductive Medicine/IVF
and a part time senior director of marketing promoting the use of our Cryoport Express® Solutions on a direct basis, in addition
to the distribution channels we are establishing. Given the global nature of our business, our sales and marketing initiatives
should more thoroughly cover the Americas, Europe and Asia. For the fiscal year ended March 31, 2014, we had one customer
that accounted for 30.8% of net revenues. No other single customer generated over 10% of our net revenues during 2014 and 2013.
Our geographical revenues
for the fiscal year ended March 31, 2014 were as follows:
USA
83.7
%
Europe
6.7
%
Asia
3.7
%
Rest of World
5.9
%
53
We renewed our agreement
with FedEx and plan to further expand our revenues and marketing efforts through the establishment of additional strategic partnerships
with global integrators and freight forwarders. Subject to available financial resources, we also plan to hiring additional sales
and marketing personnel and implement marketing initiatives intended to increase awareness of the Cryoport Express
®
Solutions.
Cryoport Operations
Centers
In addition to the services
provided through our facility in Lake Forest, California, we have contracted with third parties to run our European Operations
Center (located in Leiden, Holland) and Asian Operations Center (located in Singapore). The operations centers provide warehousing,
shipping, receiving, refurbishing and recycling services for our shipping containers. This approach is a cost-effective way to
initiate operations outside of the US and allows us to scale up as our business grows globally. In March 2013, we shut down a small
third-party operations center in New Delhi, India without impact on our business or customers.
Industry and Competition
Our products and services
are sold into a rapidly growing segment of the logistics industry focused on the temperature sensitive packaging and shipping of
biological materials. Expenditures for "value added" packaging for frozen transport have been increasing for the past
several years and, due in part to continued globalization, are expected to continue to increase even more in the future as more
domestic and international biotechnology firms introduce pharmaceutical products that require continuous refrigeration at cryogenic
temperatures. We believe this will require a greater dependence on passively controlled temperature transport systems (i.e., systems
having no external power source). In addition, we expect that industry standards and regulations will be introduced globally, requiring
more comprehensive tracking and validation of shipping temperatures.
We believe that growth
in the following markets has resulted in the need for increased reliability, efficiencies and greater flexibility in the temperature
sensitive segment of the logistics market:
·
cell-based therapies
·
gene and stem cell biotechnology
·
cell lines
·
vaccine production
·
commercial drug product
distribution
·
clinical trials, including
transport of tissue culture samples
·
diagnostic specimens
·
infectious sample materials
·
inter/intra-laboratory
diagnostic testing
·
temperature-sensitive
specimens
·
biological samples,
in general
·
environmental sampling
·
IVF
·
animal husbandry
54
Many of the biological
products in these above markets require transport in a frozen state as well as the need for shipping containers which have the
ability to maintain a frozen, cryogenic environment (e.g., minus 150° Celsius) for a period ranging from two to ten days (depending
on the distance and mode of shipment). These products include stem cells, semen, embryo, tissue, tissue cultures, cultures of viruses
and bacteria, enzymes, DNA materials, vaccines and certain pharmaceutical products.
One of the integral parts
of our solutions are our Cryoport Express
®
Shippers that are based on a liquid nitrogen dry vapor technology. The
following paragraphs compare our shippers with dry ice and liquid nitrogen shipping methods. Our solutions integrate the Cryoport
Express® Shippers with our Cryoportal
TM
logistics software platform and our cold chain logistics know-how that are
comprehensive and tailored to client requirements.
Cryoport Express
Shippers (Liquid Nitrogen Dry Vapor) compared to Dry Ice Shipments
One problem faced by many
companies operating in these specialized markets is the limited number of cryogenic shipping systems serving their needs. The currently
adopted protocol and the most common method for packaging frozen transport in these industries is the use of solid-state carbon
dioxide (dry ice). Dry ice is and has been used extensively in shipping to maintain a frozen state for a period of one to four
days. Dry ice is used in the transport of many biological products, such as pharmaceuticals, laboratory specimens and certain infectious
materials. The common approach to shipping these items via ground freight is to pack the product in a container, such as an expanded
polystyrene (styrofoam) box or a molded polyurethane box, with a variable quantity of dry ice. The box is taped or strapped shut
and shipped to its destination with freight charges based on its initial shipping weight. All dry ice shipping is considered dangerous
goods shipping, requiring extra packaging steps and adding costs. It gives off carbon dioxide and sublimates unevenly and in short
duration.
With respect to shipments
via specialized courier services, there is no standardized method or device currently in use for the purpose of transporting temperature-sensitive
frozen biological specimens. One common method for courier transport of biological materials is to place frozen specimens, refrigerated
specimens, and ambient specimens into a compartmentalized container, similar in size to a 55 quart Coleman or Igloo cooler. The
freezer compartment in the container is loaded with a quantity of dry ice at minus 78° Celsius, while the refrigerated compartment
at 8° Celsius utilizes ice substitutes.
Two manufacturers of the
polystyrene and polyurethane containers frequently used in the shipping and courier transport of dry ice frozen specimens are Insulated
Shipping Containers, Inc. and Tegrant (formerly SCA Thermosafe). When these containers are used with dry ice, the average sublimation
rate (e.g., the rate at which dry ice turns from a solid to a gaseous state) in a container with a 1
1
/
2
inch
wall thickness is slightly less than three pounds per 24 hours. Other existing refrigerant systems employ the use of gel packs
and ice substitutes for temperature maintenance. Gels and eutectic solutions (phase changing materials) with a wide range of phasing
temperatures have been developed in recent years to meet the needs of products with varying specific temperature control requirements.
The use of dry ice and
ice substitutes, however, regardless of external packaging used, are frequently inadequate because they do not provide low enough
storage temperatures and, in the case of dry ice, last for only a few days without re-icing. As a result, companies run the risk
of increased costs due to lost specimens and additional shipping charges due to the need to re-ice.
Some of the other disadvantages
to using dry ice for shipping or transporting temperature sensitive products are as follows:
•
availability of a dry
ice source;
•
handling and storage
of the dry ice;
•
cost of the dry ice;
•
compliance with local,
state and federal regulations relating to the storage and use of dry ice;
•
dangerous goods shipping
regulations;
•
weight of containers
when packed with dry ice;
•
securing a shipping
container with a high enough R-value (which is a measure of thermal resistance) to hold the dry ice and product for the required
time period;
55
•
securing a shipping container
that meets the requirements of IATA, the DOT, the CDC, and other regulatory agencies; and
•
emission of greenhouse
gases (primarily carbon dioxide) into the environment.
Due to the limitations
of dry ice, specimens that require frozen shipping are more securely shipped at true cryogenic temperatures using a service such
as liquid nitrogen dry vapor shippers (Cryoport Express Shippers), or liquid nitrogen shippers where the specimen is kept over
actual liquid nitrogen. However, liquid nitrogen is hazardous and has many pitfalls including safety and expense.
Cryoport Express
Shippers (Liquid Nitrogen Dry Vapor) compared to Liquid Nitrogen Dewars/Tanks
There are distinct disadvantages
when using liquid nitrogen compared to the dry vapor liquid nitrogen used in Cryoport Express
®
Shippers. Liquid
nitrogen dewars/tanks are classified as dangerous goods and cannot be shipped as parcel. In addition, the liquid nitrogen has to
be disposed of prior to returning the dewar/tank to its origin. These issues add additional procedural steps and costs to the shipment.
In addition, there is a risk of liquid nitrogen leakage if the dewar/tank tips to the side during transport, which can cause bodily
injury and compromise the specimen being shipped. Due to the use of our proprietary technology, our Cryoport Express
®
Shippers are not prone to leakage when on their side or inverted, thereby protecting the integrity of our shipper's hold
time and being safe for handling.
While both liquid nitrogen
dry vapor and liquid nitrogen shippers provide solutions to the issues encountered when shipping with dry ice, liquid nitrogen
shippers have some draw backs. For example, the cost for a liquid nitrogen shipper typically can range from $650 to $4,000 per
unit, which can substantially limit their use for the transport of many common biologics, particularly with respect to small quantities
such as is the case with direct to the physician drug delivery. Because of the initial cost and limited production of these containers,
they are designed to be reusable. However, the cost of returning these containers can be significant, particularly in international
markets, because most applications require only one-way shipping. In addition, the logistics support of cryogenic shippers requires
more sophisticated logistics management and discipline to ensure shippers are returned and recycled, especially for international
shipments, which many companies do not have in place.
Cryoport's solutions
are totally comprehensive and integrated for maximum reliability, economy and total effectiveness. Cryoport's total logistics
solution enables life sciences companies to utilize the superior liquid nitrogen dry vapor technology without having to make capital
investments or developing in-house logistics expertise and systems by offering a complete solution, which includes the cloud-based
Cryoportal
TM
logistics management platform, the temperature monitoring system and the 24/7/365 logistics support. Cryoport
allows the customer to outsource logistics and focus on its core competencies while maintaining visibility of all shipping related
information.
Within our intended biotechnology
and life sciences markets for Cryoport Express
®
Shippers, there is limited known direct competition. We compete
with liquid nitrogen and dry ice solutions by reason of the improved and integrated hardware and software technology in our products
including our comprehensive logistics management software and through the use of our service enabled business model. The Cryoport
Express
®
Solution provides a simple and cost effective solution for the frozen or cryogenic transport of biotech
and life sciences materials. The Cryoportal
TM
assists with the management, scheduling and shipping of the Cryoport Express
®
Shippers, removing the burdens associated with other methods.
Traditional dry ice shippers
and liquid nitrogen tank suppliers, such as MVE/Chart Industries, Taylor Wharton, and Air Liquide, offer various models of dry
vapor liquid nitrogen shippers that are not as cost efficient for multi-use and multi-shipment purposes due to their significantly
greater unit costs and unit weight (which may substantially increase the shipping cost). On the other hand, they are more established
and have larger organizations and have greater financial, operational, sales and marketing resources, have a broader manufactured
product offering of other liquid nitrogen products and more experience in research and development than we do.
Factors that we believe
give us a competitive advantage are attributable to our software and shipping containers, which allow our shipper to retain liquid
nitrogen when placed in non-upright positions, the overall "leak-proofness" of our package which determines compliance
with shipping regulations, the overall weight and volume of the package which determines shipping costs, and our business model
represented by the merged integration of our shipper with Cryoportal
TM
and Smart Pak data logger into a seamless shipping,
tracking and monitoring solution.
56
Other companies that offer
potentially competitive products include Industrial Insulation Systems, which offers cryogenic transport units and has partnered
with Marathon Products Inc., a manufacturer and global supplier of wireless temperature data collecting devices used for documenting
environmentally sensitive products through the cold chain, and Kodiak Thermal Technologies, Inc. which offers, among other containers,
a repeat use active-cool container that uses free piston stirling cycle technology. While not having their own shipping devices,
BioStorage Technologies is potentially a competitive company through their management services offered for cold-chain logistics
and long-term biomaterial storage. Cryogena offers a single use disposable LN2 shipper with better performance than dry ice, but
it does not perform as well and is not as cost-effective as the Cryoport solution when all costs are considered. In addition, BioMatrica,
Inc. is developing and offering technology that stabilizes biological samples and research materials at room temperature. They
presently offer these technologies primarily to research and academic institutions; however, their technology may eventually enter
the broader cold-chain market. Fisher BioServices, part of Thermo Fisher Scientific, provides cell therapy logistics services, maintaining
cold chain from manufacturer to patient bedside.  They provide customized solutions in biospecimen collection kits, biospecimen
shipping, lab processing, biobanking and clinical trial support services.
Research and Development
Our research and development
efforts are focused on continually improving the features of our Cryoport Express
®
Solutions including the cloud-based
Cryoportal
TM
and the Cryoport Express
®
Shippers. These efforts are expected to lead to the introduction
of shippers of varying sizes based on market requirements, constructed of lower cost materials and utilizing high volume manufacturing
methods that will make it practical to provide the cryogenic packages offered with the Cryoport Express
®
Solutions.
Alternative phase change materials in place of liquid nitrogen may be used to increase the potential markets these shippers can
serve such as ambient and 2°- 8°C markets. Our research and development expenditures for the fiscal years ended March 31,
2014 and 2013 were $409,100 and $425,400, respectively with the largest portion being spent on software maintenance and development.
Employees
The efforts of our employees
are critical to our success. We believe that we have assembled a strong management team with the experience and expertise needed
to execute our business strategy. We anticipate hiring additional personnel as needs dictate to implement our growth strategy.
As of December 31, 2014, we had twenty-three full-time employees, three consultants and three temporary employees.
Insurance
We currently maintain
general liability insurance, with coverage in the amount of $1 million per occurrence, subject to a $2 million annual limitation.
Claims may be made against us that exceed these limits. In fiscal year 2014, we did not experience any claims against our professional
liability insurance. Our liability policy is an "occurrence" based policy. Thus, our policy was complete when we purchased
it, and following cancellation of the policy, it will continue to provide coverage for future claims based on conduct that took
place during the policy term. However, our insurance may not protect us against all liability because our policies typically have
various exceptions to the claims covered and also require us to assume some costs of the claim even though a portion of the claim
may be covered. In addition, if we expand into new markets, we may not be aware of the need for, or be able to obtain insurance
coverage for such activities or, if insurance is obtained, the dollar amount of any liabilities incurred could exceed our insurance
coverage. A partially or completely uninsured claim, if successful and of significant magnitude, could have a material adverse
effect on our business, financial condition and results of operations.
We also maintain product
liability insurance with coverage in the amount of $1,000,000 per year. In addition, we currently maintain cargo insurance for
shipments for one customer, with coverage of up to $10,000 per shipment.
DESCRIPTION OF PROPERTY
We do not own real property.
We currently lease one facility, with approximately 12,000 square feet of corporate, research and development, and warehouse facilities,
located in Lake Forest, California under an operating lease expiring June 30, 2015, which we do not intend to renew. We are currently
exploring other facilities to meet our growing demands.
The Company currently
makes base lease payments of approximately $10,000 per month, due at the beginning of each month. We believe that these facilities
are adequate, suitable and of sufficient capacity to support our immediate needs. Additional space may be required, however, as
we expand our research and development, manufacturing and selling and marketing activities.
57
LEGAL PROCEEDINGS
In the ordinary course
of business, we are at times subject to various legal proceedings and disputes, including product liability claims. We currently
are not aware of any such legal proceedings or claim that we believe will have, individually or in the aggregate, a material adverse
effect on our business, operating results or cash flows. It is our practice to accrue for open claims based on our historical experience
and available insurance coverage.
DIRECTORS AND EXECUTIVE
OFFICERS
Directors and Executive
Officers
The following table sets
for the name and age of each director and executive officer, the year first elected as a director and/or executive officer and
the position(s) held with Cryoport:
Name
Age
Position
Date
Elected
Jerrell W. Shelton
69
President, Chief Executive Officer, Director
2012
Robert S. Stefanovich
50
Chief Financial Officer, Treasurer and Corporate Secretary
2011
Richard J. Berman
72
Director
2014
Edward J. Zecchini
53
Director
2013
Richard G. Rathmann
53
Chairman
2013
Ramkumar Mandalam
49
Director
2014
Background of Directors
and Officers:
Jerrell W. Shelton
,
age 69, became President and Chief Executive Officer of the Company on November 5, 2012. He served on the Board of Directors and
standing committees of Solera Holdings, Inc. from April 2007 through November 2011. From June 2004 to May 2006, Mr. Shelton
was the Chairman and CEO of Wellness, Inc., a provider of advanced, integrated hospital and clinical environments. Prior to that,
he served as CEO of IBM's WebFountain. From October 1998 to October 1999, Mr. Shelton was Chairman, President and CEO
of NDC Holdings II, Inc. Between October 1996 and July 1998, he was President and CEO of Continental Graphics Holdings, Inc. and
from October 1991 to July 1996, Mr. Shelton served as President and CEO of Thomson Business Information Group. Mr. Shelton
has a B.S. in Business Administration from the University of Tennessee and an M.B.A. from Harvard University. Mr. Shelton
currently serves on the Advisory Board of Directors and the Nominating and Stewardship committee of the Smithsonian Institution
Libraries.
Robert S. Stefanovich
,
age 50, became Chief Financial Officer, Treasurer and Corporate Secretary for the Company on June 27, 2011 following the Company's
filing of its Form 10–K for the fiscal year ended March 31, 2011. On June 15, 2012, Mr. Stefanovich served
as the Principal Executive Officer of the Company. From November 2007 through March 2011, Mr. Stefanovich served
as Chief Financial Officer of Novalar Pharmaceuticals, Inc., a venture-backed specialty pharmaceutical company. Prior to that,
he held several senior positions, including interim Chief Financial Officer of Xcorporeal, Inc., a publicly traded medical device
company, Executive Vice President and Chief Financial Officer of Artemis International Solutions Corporation, a publicly traded
software company, Chief Financial Officer and Secretary of Aethlon Medical Inc., a publicly traded medical device company and Vice
President of Administration at SAIC, a Fortune 500 company. Mr. Stefanovich also served as a member of the Software Advisory
Group and an Audit Manager with Price Waterhouse LLP's (now PricewaterhouseCoopers) hi-tech practice in San Jose, CA and
Frankfurt, Germany. He currently also serves as a board member of Project InVision International, a provider of business performance
improvement solutions. He received his Masters of Business Administration and Engineering from University of Darmstadt, Germany.
Richard J. Berman
,
age 72 became a member of the Board in January 2015, and serves as Chairman of the Audit and Compensation Committee and member
of the Nominating and Governance Committee of the Board. Mr. Berman's business career consists of more than 35 years
of venture capital, management and merger and acquisitions experience. He currently serves as a director of four public companies:
NeoStem, Inc. (NASDAQ: NBS), Advaxis, Inc. (OTC: ADXS), Lustros, Inc. (OTC: LSLD) and MetaStat Inc. (OTC: MTST), where he is the
chairman, and has served as a director and/or officer of more than a dozen public and private companies. His previous experience
includes positions at Goldman Sachs and as Senior Vice President of Bankers Trust Company. Some of his more notable positions include
his service from 2006-2011 as Chairman of National Investment Managers (OTC: NIVM.OB), a company with $12 billion in pension administration
assets. In 2012, he sold Easylink Services for over $300 million, where he was chairman and CEO from 1999 to 2000 and director
from 1998 to 2012. From 2004-2010, Mr. Berman served as a Director of NexMed Inc., a public biotech company. In 2008, Mr. Berman
became its Chairman and CEO. In 2010 he merged the company with Apricus Biosciences. Mr. Berman is a past director of the
Stern School of Business of NYU, where he received his B.S. and M.B.A. He also holds two law degrees, a J.D. from Boston College
and a Special Certificate from The Hague Academy of International Law.
58
Edward J.
Zecchini
, age 53 became a member of the Board on September 13, 2013, and serves as Chairman of the Nominating and
Governance Committee of the Board and member of the Audit Committee and the Compensation Committee. Mr. Zecchini
currently serves as Chief Information Officer at Remedy Partners, Inc. Prior to that, Mr. Zecchini served as Executive Vice
President and Chief Technology Officer at Sandata Technologies, LLC, from May 2010 to March 2014, as President and Chief Executive Officer of IT Analytics LLC from March 2008 to
April 2010, Executive Vice President of Operations and Chief Information Officer of Touchstone Healthcare Partnership from
May 2007 to February 2008 and Senior Vice President and Chief Information Officer of HealthMarkets, Inc. from October 2004 to
April 2007. Earlier in his career he held senior level positions at Thomson Healthcare and SportsTicker, Inc.
Mr. Zecchini has over thirty years of experience in the healthcare and information technology
industries. Mr. Zecchini holds a Bachelor of Arts degree from the State University of New York. Mr. Zecchini
currently serves on the board of directors of Insur I.Q. LLC.
Richard G. Rathmann
,
age 53, became a member of our Board in March 2013 and serves as the Chairman of the Board and member of the Audit, Compensation,
and Nomination and Governance Committees. Mr. Rathmann served for the past eighteen years as a director of various for-profit
and non-profit companies. He has served as the manager of GBR Investments, LLC since 2005 and has served as the Executive
Director of the Rathmann Family Foundation since 2002. Mr. Rathmann received his bachelor's degree from the University
of Colorado and his juris doctor degree from Boston College Law School. Mr. Rathmann currently serves on the board of directors
of PIN Pharma, the Rathmann Family Foundation, and Cellerant Therapeutics, where he served as Chairman from 2007 to 2012.
Ramkumar Mandalam,
Ph.D
., age 49, became a member of the Company's Board on June 16, 2014 and currently serves as a member of the Compensation
Committee and the Nomination and Governance Committee. Dr. Mandalam is the President and CEO of Cellerant Therapeutics, Inc., a
clinical stage biotechnology company developing novel cell-based and antibody therapies for cancer treatment and blood-related
disorders. Prior to joining Cellerant in 2005, he was the Executive Director of Product Development at Geron Corporation, a biopharmaceutical
company where he managed the development and manufacturing of cell based therapies for treatment of degenerative diseases and cancer.
From 1994 to 2000, he held various positions in research and development at Aastrom Biosciences, where he was responsible for programs
involving ex vivo expansion of human bone marrow stem cells and dendritic cells. Dr. Mandalam received his Ph.D. in Chemical Engineering
from the University of Michigan, Ann Arbor, Michigan. Dr. Mandalam is the author or co-author of several publications, patent applications,
and abstracts. The directors and officers of Cryoport hold office until their successors are elected and qualified, or until their
death, resignation, or removal.
None of the directors
or officers listed above has:
•
Had a bankruptcy petition
filed by or against any business of which that person was a general partner of executive officer either at the time of the bankruptcy
or within two years prior to that time;
•
Had any conviction in
a criminal proceeding, or been subject to a pending criminal proceeding;
•
Been subject to any order,
judgment, or decree by any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise
limiting such person's involvement in any type of business, securities or banking activities; and
•
Been found by a court
of competent jurisdiction, the Commission, or the Commodity Futures Trading Commission to have violated a federal or state securities
or commodities law, or any law respecting financial institutions or insurance companies, or any law prohibiting mail or wire fraud
or fraud in connection with any business entity.
Director Independence
The Company is quoted
on the Over-The-Counter Bulletin Board system, which does not require director independence requirements. However, for purposes
of determining director independence, we have applied the definitions set forth in NASDAQ Rule 5605(a)(2) which states, generally,
that a director is not considered to be independent if he or she is, or at any time during the past three years was an employee
of the Company; or if he or she (or his or her family member) accepted compensation from the Company in excess of $120,000 during
any twelve month period within the three years preceding the determination of independence. Our Board has affirmatively determined
that Mr. Mandalam, Mr. Rathmann, Mr. Zecchini and Mr. Berman are "independent" as such term is
defined under NASDAQ Rule 5605(a)(2) and the related rules of the Securities and Exchange Commission (the "SEC"). We
intend to maintain at least two independent directors on the Board.
59
Committees of the Board
of Directors
Our Board of Directors
has established an Audit Committee, a Compensation Committee and a Nomination and Governance Committee.
Audit Committee
The functions of the Audit
Committee are to (i) review the qualifications of the independent auditors, our annual and interim financial statements, the
independent auditor's report, significant reporting or operating issues and corporate policies and procedures as they relate
to accounting and financial controls; and (ii) to consider and review other matters relating to our financial and accounting
affairs. The Company's Board has a formally established Audit Committee and adopted an Audit Committee charter. The Audit
Committee's charter is available on the Company's website at www.cryoport.com under the tab "Corporate Governance"
which is found under the heading "Company." Information on the website does not constitute a part of this prospectus.
The current members of
the Audit Committee are Mr. Richard J. Berman, who is the Audit Committee Chairman, Mr. Richard G. Rathmann and Mr. Edward
J. Zecchini. The Company has determined that (i) Mr. Berman qualifies as an "audit committee financial expert"
as defined in Item 401(h) of Regulation S-K of the SEC rules and is "independent" within the meaning of NASDAQ Rule
5605(a)(2) and the related rules of the SEC, and (ii) Mr. Rathmann and Mr. Zecchini meet NASDAQ's financial literacy
and financial sophistication requirements and are "independent" within the meaning of NASDAQ Rule 5605(a)(2) and the
related rules of the SEC. During fiscal 2014, the Company's Audit Committee held four meetings during fiscal 2014. In addition,
the Audit Committee regularly held discussions regarding the consolidated financial statements of the Company during Board meetings.
Compensation
Committee
The purpose of the Compensation
Committee is to discharge the Board's responsibilities relating to compensation of the Company's directors and executive
officers, to produce an annual report on executive compensation for inclusion in the Company's Proxy Statement, as necessary,
and to oversee and advise the Board on the adoption of policies that govern the Company's compensation programs including
stock incentive and benefit plans. In May 2010, the Company's Board established the Compensation Committee. Previously, the
Committee was known as the "Compensation and Governance Committee." The Compensation Committee's charter is available
on the Company's website at www.cryoport.com under the tab "Corporate Governance" which is found under the heading
"Company." Information on the website does not constitute a part of this prospectus.
The current members of
the Compensation Committee are Mr. Richard J. Berman, who is the Chairman, Mr. Richard G. Rathmann, Mr. Ramkumar
Mandalam, and Mr. Edward J. Zecchini, each of whom is independent under applicable independence requirements. Each of the
current members of the Compensation Committee is a "non-employee director" under Section 16 of the Exchange Act
and an "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"). The Compensation Committee met two times during fiscal year 2014.
Nomination and
Governance Committee
In May 2010, the Company
established the Nomination and Governance Committee. The function of the Nomination and Governance Committee is to (i) make
recommendations to the Board regarding the size of the Board, (ii) make recommendations to the Board regarding criteria for
the selection of director nominees, (iii) identify and recommend to the Board for selection as director nominees individuals
qualified to become members of the Board, (iv) recommend committee assignments to the Board, (v) recommend to the Board
corporate governance principles and practices appropriate to the Company, and (vi) lead the Board in an annual review of its
performance. The Nomination and Governance Committee's charter is available on the Company's website at www.cryoport.com
under the tab "Corporate Governance" which is found under the heading "Company." Information on the website
does not constitute a part of this prospectus.
The current members of
the Nomination and Governance Committee are Mr. Edward J. Zecchini, who is the Chairperson, Mr. Richard J. Berman, Mr. Ramkumar
Mandalam, and Mr. Richard G. Rathmann. The Nomination and Governance Committee met two times during fiscal year 2014.
60
EXECUTIVE COMPENSATION
Executive Officers of
the Company
The Company's current
executive officers are as follows:
Jerrell W. Shelton, age
69, became President and Chief Executive Officer of the Company on November 5, 2012. He served on the Board of Directors and standing
committees of Solera Holdings, Inc. from April 2007 through November 2011. From June 2004 to May 2006, Mr. Shelton was the
Chairman and CEO of Wellness, Inc., a provider of advanced, integrated hospital and clinical environments. Prior to that, he served
as CEO of IBM's WebFountain. From October 1998 to October 1999, Mr. Shelton was Chairman, President and CEO of NDC Holdings
II, Inc. Between October 1996 and July 1998, he was President and CEO of Continental Graphics Holdings, Inc. and from October 1991
to July 1996, Mr. Shelton served as President and CEO of Thomson Business Information Group. Mr. Shelton has a B.S. in
Business Administration from the University of Tennessee and an M.B.A. from Harvard University. Mr. Shelton currently serves
on the Advisory Board of Directors and the Nominating and Stewardship committee of the Smithsonian Institution Libraries.
Robert S. Stefanovich,
age 50, became Chief Financial Officer, Treasurer and Corporate Secretary for the Company on June 27, 2011 following the Company's
filing of its Form 10–K for the fiscal year ended March 31, 2011. From June 15, 2012 to November 4, 2012, Mr. Stefanovich
served as the Principal Executive Officer of the Company. From November 2007 through March 2011, Mr. Stefanovich
served as Chief Financial Officer of Novalar Pharmaceuticals, Inc., a venture-backed specialty pharmaceutical company. Prior to
that, he held several senior positions, including interim Chief Financial Officer of Xcorporeal, Inc., a publicly traded medical
device company, Executive Vice President and Chief Financial Officer of Artemis International Solutions Corporation, a publicly
traded software company, Chief Financial Officer and Secretary of Aethlon Medical Inc., a publicly traded medical device company
and Vice President of Administration at SAIC, a Fortune 500 company. Mr. Stefanovich also served as a member of the Software
Advisory Group and an Audit Manager with Price Waterhouse LLP's (now PricewaterhouseCoopers) hi-tech practice in San Jose,
CA and Frankfurt, Germany. He currently also serves as a board member of Project InVision International, a provider of business
performance improvement solutions. He received his Masters of Business Administration and Engineering from University of Darmstadt,
Germany.
SUMMARY COMPENSATION
TABLE
The following table contains
information with respect to the compensation for the fiscal years ended March 31, 2014 and 2013 of our chief executive officer,
chief financial officer and former chief executive officer. We refer to the executive officers identified in this table as our
"Named Executive Officers."
Name and Principal Position
Fiscal
Year
Salary (1)
($)
Bonus
($)
Option
Awards (5)
($)
All Other
Compensation
($)
Total
Compensation
($)
Jerrell W. Shelton
2014
300,000
(4)
—
930,358
(3)
—
1,230,358
President and Chief Executive Officer
2013
122,885
(9)
—
295,380
(7)
4,409
(8)
422,674
Robert S. Stefanovich
2014
225,000
(4)
—
201,028
(6)
—
426,028
Chief Financial Officer
2013
225,000
(4)
—
40,652
(6)
—
265,652
Larry G. Stambaugh
2014
—
—
—
—
—
Former President, Chief Executive Officer and Chairman
2013
6,923
(2)
—
—
241,115
(10)
248,038
(1)
This column represents salary as of the last payroll period prior to or immediately after March 31 of each fiscal year.
(2)
On August 21, 2009, the Compensation Committee approved an employment agreement with Mr. Stambaugh which had an effective commencement date of August 1, 2009, the details of which are described below. $57,794 and $360,000 were paid to Mr. Stambaugh in fiscal years 2013 and 2012, respectively, per the terms of the employment agreement. Mr. Stambaugh resigned as President, Chief Executive Officer and Chairman on April 5, 2012.
(3)
This amount represents the fair value of all options granted to Mr. Shelton as compensation for services as a director and officer of the Company during fiscal year 2014. Based on the recommendation of the Compensation Committee and approval by the Board, on June 28, 2013, Mr. Shelton was granted an option to purchase 487,814 shares of common stock in connection with his engagement as Chief Executive Officer of the Company.
(4)
This amount represents the annual base salary paid.
(5)
This column represents the total grant date fair value of all stock options granted in the Company's fiscal year ended March 31, 2014 and the Company's fiscal year ended March 31, 2013. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For information on the valuation assumptions with respect to the grants made in fiscal years 2014 and 2013, refer to Note 2 "
Summary of Significant Accounting Policies
"
in the accompanying consolidated financial statements.
61
(6)
This amount represents the fair value of all options granted to Mr. Stefanovich as compensation for services during fiscal years 2014 and 2013. Based on the recommendation of the Compensation Committee and approval by the Board, on June 28, 2013 and August 3, 2012, Mr. Stefanovich was granted an option to purchase 104,877 and 12,500 shares of common stock, respectively. The exercise prices of the options are equal to the fair value of the Company's stock as of the grant date.
(7)
This amount represents the fair value of all options granted to Mr. Shelton as compensation for services as a director and officer of the Company during fiscal year 2013. Based on the recommendation of the Board, on October 22, 2012, Mr. Shelton was granted an option to purchase 12,500 shares of the Company's common stock upon joining the Board. Based on the recommendation of the Compensation Committee and approval by the Board, on November 5, 2012, Mr. Shelton was granted an option to purchase 206,250 shares of common stock in connection with his engagement as Chief Executive Officer of the Company
(8)
This amount represents board fees paid to Mr. Shelton as compensation for services as a director of the Company during fiscal year 2013 prior to becoming Chief Executive Officer of the Company.
(9)
This amount reflects a pro-rated salary for Mr. Shelton who began employment with the Company on November 5, 2012.
(10)
This amount represents $180,000 severance payment, $50,871 personal time off payout and $10,244 COBRA reimbursements to Mr. Stambaugh per the terms of his separation agreement.
Narrative Disclosure
to Summary Compensation Table
Employment
Contracts
Jerrell W. Shelton
On November 5, 2012,
the Company entered into an employment agreement (the "Initial Agreement") with Mr. Shelton with respect to his
employment as President and Chief Executive Officer. The Initial Agreement provided a term of six months. The Initial Agreement
provided an initial annual base salary of $300,000 during the Term.
In addition, on the date
of the Initial Agreement, Mr. Shelton was awarded two options giving him the right to acquire an aggregate of 206,250 shares
of the Company's common stock at an exercise price equal to the closing price of the Company's common stock on the
date of the Agreement, or $1.60 per share. The aggregate number of shares was determined by dividing $350,000 by the closing price
of the Company's common stock on the date of the Agreement, or $1.60 per share, and subtracting 12,500 shares, which is the
number of shares of common stock that Mr. Shelton was given the right to purchase pursuant to the option that was issued to
him in connection with his appointment to the Board of Directors on October 22, 2012. The first option issued in connection
with the Agreement was issued under the Company's 2011 Stock Incentive Plan and provides Mr. Shelton the right to purchase
81,250 shares of the common stock of the Company, which is the maximum that may be awarded to Mr. Shelton in this fiscal year
under such plan. Mr. Shelton subsequently exercised 81,250 of these shares in May and November 2013. The second option provided
Mr. Shelton the right to purchase 125,000 shares of common stock of the Company and was granted outside of the Company's
incentive plans. The options vest in six equal monthly installments during the Term and expire at the earlier of (a) ten years
from the date of the Agreement, and (b) five (5) years from the date of the resignation and/or removal of the Mr. Shelton
as a member of the Board of Directors of the Company.
On June 28, 2013, after
the expiration of the Initial Agreement, the Company entered into a new employment agreement (the "Agreement") with
Mr. Shelton with respect to his employment as President and Chief Executive Officer. The Agreement is effective through May
14, 2017 (the "Term").
The Agreement provides
an initial annual base salary of $300,000 during the Term. In addition, on the date of the Agreement, Mr. Shelton was awarded
options giving him the right to acquire an aggregate of 487,814 shares of the Company's common stock at an exercise price
equal to the closing price of the Company's common stock on the date of the Agreement, or $2.16 per share, and such options
were granted outside of the Company's incentive plans. The options vest immediately with respect to 20,326 shares and the
remaining right to purchase the remaining shares vest in equal monthly installments on the fifth day of each month for forty six
months beginning on July 5, 2013 and ending on May 5, 2017, provided that such vesting will be accelerated on the date that the
Company files a Form 10-Q or Form 10-K indicating an income from operations for the Company in two consecutive fiscal quarters
and immediately in the event of a change of control of the Company.
The options expire at
the earlier of (a) ten years from the date of the Agreement, and (b) twenty four (24) months from the date of the resignation and/or
removal of the Mr. Shelton as Chief Executive Officer of the Company.
62
Mr. Shelton has agreed
during the Term and for a period of one year following the termination of the Agreement not to solicit, induce, entice or attempt
to solicit, induce, or entice any employee of the Company to leave employment with the Company. Payments due to Mr. Shelton
upon a termination of his employment agreement are described below.
Robert S. Stefanovich
Although the Company does
not have a written employment agreement with Mr. Stefanovich, pursuant to the terms of his offer letter, the Company has agreed
to pay Mr. Stefanovich an annual base salary of $225,000 per year. In addition, he is eligible for an incentive bonus targeted
at 25% of his annual base salary. Mr. Stefanovich is eligible to participate in all employee benefits plans or arrangements
which may be offered by the Company during the term of his employment. The Company shall pay the cost of Mr. Stefanovich's
health insurance coverage in accordance with the Company's plans and policies while he is an employee of the Company. Mr. Stefanovich
is also eligible for fifteen (15) paid time-off days a year, and is entitled to receive fringe benefits ordinarily and customarily
provided by the Company to its senior officers. Payments due to Mr. Stefanovich upon a termination of his employment agreement
with the Company are described below.
Larry G. Stambaugh
(former President and Chief Executive Officer)
On August 21, 2009,
the Compensation Committee approved an employment agreement with Mr. Stambaugh, the Company's former Chief Executive
Officer, President and Chairman, which commenced effective as of August 1, 2009 and continued in effect until April 5, 2012
(the "Stambaugh Employment Agreement"), the date of Mr. Stambaugh's resignation. Pursuant to the terms of
the Stambaugh Employment Agreement, Mr. Stambaugh was paid an annual base salary of $360,000. In connection with Mr. Stambaugh's
resignation as Chief Executive Officer and Chairman of the Board, the Company paid Mr. Stambaugh a lump sum severance payment
of $180,000 and extended the exercise period of two stock options granted to Mr. Stambaugh on September 10, 2010, with exercise
prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common stock vested as of April 5, 2012,
which amount to 45,279 and 26,250 shares of the Company's common stock, respectively.
The Company has no other
employment agreements with executive officers of the Company as of December 31, 2014.
OUTSTANDING EQUITY AWARDS
AT FISCAL YEAR END 2014
The following table shows
information regarding unexercised stock options held by our Named Executive Officers as of fiscal year ended March 31, 2014:
Name
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
Equity
Incentive
Plan Awards
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Jerrell W. Shelton
12,500
(1)
—
—
$
1.52
10/21/22
125,000
(2)
—
—
$
1.60
11/4/22
111,791
(3)
—
376,023
(3)
$
2.16
6/27/23
Robert Stefanovich
9,766
(4)
—
5,859
(4)
$
6.88
6/19/21
—
(5)
—
5,000
(5)
$
3.44
8/2/22
2,813
(6)
—
4,687
(6)
$
3.44
8/2/22
19,665
(7)
—
85,212
(7)
$
2.16
6/27/23
Larry Stambaugh
45,279
(8)
—
—
$
5.28
4/5/17
(10)
26,250
(9)
—
—
(9)
$
5.28
4/5/17
(10)
(1)
Based on the recommendation
of the Compensation Committee and approval by the Board, Mr. Shelton was granted an option to purchase 12,500 shares of common
stock exercisable at $1.52 per share on October 22, 2012 upon joining the board of directors. Options vest in twelve equal monthly
installments. The exercise price for shares of common stock pursuant to the options is equal to the fair value of the Company's
stock as of the grant date.
63
(2)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Shelton
was granted an option to purchase 206,250 shares of common stock exercisable at $1.60 per share on November 5, 2012, which vests
in six equal monthly installments. 81,250 of these options were issued under the 2011 stock option plan and exercised in May and
November 2013 and 125,000 were issued outside of a plan. The exercise price for shares of common stock pursuant to the option is
equal to the fair value of the Company's stock as of the grant date.
(3)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Shelton
was granted an option to purchase 487,814 shares of common stock exercisable at $2.16 per share on June 28, 2013. The option vests
2/48
th
immediately with the remainder vesting 1/48
th
per month for 46 months. The exercise price for the
shares of common stock pursuant to the option is equal to the fair value of the Company's stock on the date of grant.
(4)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stefanovich
was granted an option to purchase 15,625 shares of common stock exercisable at $6.88 per share on June 20, 2011. The option vests
in six month installments over a four year period. The exercise price for the shares of common stock pursuant to the option is
equal to the fair value of the Company's stock on the date of grant.
(5)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stefanovich
was granted an option to purchase 5,000 shares of common stock exercisable at $3.44 per share on August 3, 2012. The option vests
based on certain performance criteria. The exercise price for the shares of common stock pursuant to the option is equal to the
fair value of the Company's stock on the date of grant
(6)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stefanovich
was granted an option to purchase 7,500 shares of common stock exercisable at $3.44 per share on August 3, 2012. The option vests
in six month installments over a four year period. The exercise price for the shares of common stock pursuant to the option is
equal to the fair value of the Company's stock on the date of grant
(7)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stefanovich
was granted an option to purchase 104,877 shares of common stock exercisable at $2.16 per share on June 28, 2013. The options vest
in equal monthly installments over four years. The exercise price for the shares of common stock pursuant to the option is equal
to the fair value of the Company's stock on the date of grant.
(8)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stambaugh
was granted an option to purchase 45,279 shares of common stock exercisable at $5.28 per share on September 15, 2010, in lieu of
payment of his fiscal year 2010 cash bonus of $216,000. The option was fully vested at date of grant. The exercise price for shares
of common stock pursuant to the option is equal to the fair value of the Company's stock as of the grant date.
(9)
Based on the recommendation of the Compensation Committee and approval by the Board, Mr. Stambaugh
was granted an option to purchase 52,500 shares of common stock exercisable at $5.28 per share on September 15, 2010. The right
to exercise the stock option vested as to 25% of the underlying shares of common stock upon grant, with the remaining underlying
shares vesting in equal installments on the first, second and third anniversary of the grant date. The exercise price for shares
of common stock pursuant to the option is equal to the fair value of the Company's stock as of the grant date.
(10)
In connection with Mr. Stambaugh's resignation as Chief Executive Officer and Chairman
of the Board, which was effective on April 5, 2012, the Company extended the exercise period of two stock options granted to Mr. Stambaugh
on September 10, 2010, with exercise prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common
stock vested as of April 5, 2012, which amount to 45,279 and 26,250 shares of the Company's common stock, respectively.
Potential
Payments On Termination Or Change In Control
Pursuant to Mr. Shelton's
employment agreement, if Mr. Shelton terminates the Agreement, dies, or is terminated for "Cause" (as defined
in the agreement), he will be entitled to all compensation and benefits that he earned through the date of termination. If he is
terminated for Cause, the Company may, to the extent allowed by law, set off losses, fines or damages that he has caused as a result
of his misconduct. If he is terminated "without cause" (as defined in the agreement), he will be entitled to a continuation
of his base salary for three months following termination and one half of unvested options as of date of termination shall become
fully vested. In the event the Company terminates his employment, except if for "Cause" (as defined in the agreement),
within twelve (12) months after a Change in Control (as defined in the Cryoport, Inc. 2011 Stock Incentive Plan), then, Mr. Shelton
will be entitled to: (i) the continuation of his base salary for twelve (12) months following the date of termination, which shall
be paid in accordance with the Company's ordinary payroll practices in effect from time to time, and which shall begin on
the first payroll period immediately following the date on which the general release and waiver becomes irrevocable; and (ii) all
options previously granted to Mr. Shelton will become fully vested and exercisable as of the date of termination.
Pursuant to Mr. Stefanovich's
employment offer, in the event that Mr. Stefanovich's employment with the Company is terminated as a result of a "change
of control," as is defined in the Company's 2009 Stock Incentive Plan, he will be entitled to receive a severance payment
equal to twelve months of his base salary, continuation of health benefits for a period of twelve months, and the unvested portion
of his stock option grants immediately shall vest in full. Separately, in the event his employment is terminated by the Company
for reasons other than cause, Mr. Stefanovich will be entitled to receive a severance payment equal to six months of his base
salary plus continuation of health benefits for a period of six months.
64
In connection with Mr. Stambaugh's
resignation as Chief Executive Officer and Chairman of the Board, which was effective on April 5, 2012, the Company paid Mr. Stambaugh
a lump sum severance payment of $180,000 and extended the exercise period of two stock options granted to Mr. Stambaugh on
September 10, 2010, with exercise prices of $5.28 per share until April 5, 2017 with respect to those underlying shares of common
stock vested as of April 5, 2012, which amount to 45,279 and 26,250 shares of the Company's common stock, respectively.
The 2002 Plan, 2009 Plan
and 2011 Plan each provide that in the event of a "change of control," the applicable option agreement may provide
that such options or shares will become fully vested and may be immediately exercised by the person who holds the option, at the
discretion of the board.
The Company does not provide
any additional payments to named executive officers upon their resignation, termination, retirement, or upon a change of control.
DIRECTOR COMPENSATION
Compensation for the Board
is governed by the Company's Compensation Committee.
Director Fees
Effective August 21,
2009 through May 2, 2012 the fees payable to non-employee directors were set at a flat fee of $15,000 per quarter with no
additional fees payable for committee membership or serving as chairman of a committee. Effective May 3, 2012, the cash compensation
that each non-employee director is paid is $40,000 annually, except for the non-employee Chairman of the Board who is paid $56,000
annually. In addition, each non-employee director who serves as Chairman of one or more Board Committees will be paid additional
cash compensation of $8,000 annually for all Committee Chairmanships.
Effective January 1, 2015,
the compensation plan for non-employee directors was changed as follows:
Director fees will be
paid in cash, restricted shares of the Company's common stock or a combination thereof, at the option of the director.
Option 1: Cash compensation
of $40,000, paid quarterly,
Option 2: Cash compensation
of $13,000, paid quarterly and $27,000 converted into common stock using the volume weighted average price (VWAP) of the stock
for the last five days of the trading month ending each quarter, plus an annual grant of options, on the date of the Company's
annual meeting, to purchase 25,000 shares of the Company's common stock; or
Option 3: No cash compensation
but $40,000 converted into common stock using the volume weighted average price (VWAP) of the stock for the last five days of the
trading month ending each quarter and paid quarterly. This option carries a 15% premium, as there is no cash outlay to the Company.
The calculation would be $40,000 X 1.15 = $46,000 / VWAP.
In addition to the compensation
options above the following compensation applies to non-employee directors chairing a Board committee. This compensation will be
paid on the same basis as the Director chose from the options described above:
Chairman/Lead Director
$
25,000
Audit Committee
$
20,000
Compensation Committee
$
10,000
Nominating and Corporate Governance Committee
$
10,000
65
Director Stock Option
Grants
Effective May 3,
2012, each non-employee director was awarded a stock option to purchase 6,250 shares of the Company's common stock on the
date of the Company's annual meeting of stockholders, except for the non-employee Chairman of the Board who is awarded a
stock option to purchase 10,000 shares of the Company's common stock. In addition, each new non-employee director will be
granted a stock option to purchase 12,500 shares of the Company's common stock upon joining the Board. Effective January
1, 2015, each new non-employee director is granted stock options to purchase 25,000 shares of the Company's common stock
upon appointment to the Board. In addition, each non-employee director will receive an annual grant of stock options on the date
of the Company's annual meeting of stockholders to purchase 25,000 shares of the Company's common stock.
On May 3, 2012, Mr. Adam
M. Michelin, a former director, was granted options to purchase a total of 7,500 shares of the Company's common stock with
an exercise price of $3.52 per share which vested on September 22, 2012 for his service as a director, Chairman of the Audit Committee,
and as a member of the Compensation Committee and the Nomination and Governance Committee during fiscal 2012 and fiscal 2013 and
Lead Independent Director during fiscal 2012. The options to purchase a total of 4,375 shares were issued in connection with the
services he provided during fiscal 2012.
On May 3, 2012, Mr. Stephen
E. Wasserman, a former director, was granted options to purchase a total of 17,295 shares of the Company's common stock with
an exercise price of $3.52 per share which vested on March 29, 2013 for his service as a director, Chairman of the Board and member
of the Compensation Committee, Audit Committee and Governance and Nominating Committee during fiscal 2012 and fiscal 2013.
On May 3, 2012, Ms. Karen
Muller, a former director, was granted options to purchase a total of 20,805 shares of the Company's common stock with an
exercise price of $3.52 per share of which 14,555 shares immediately vested and the remaining 6,250 shares vested on September
22, 2012 for her service as a director, Chairman of the Compensation Committee and Nomination and Governance Committee, and a member
of the Audit Committee during fiscal 2012 and fiscal 2013. The options to purchase a total of 15,972 shares were issued in connection
with the services she provided during fiscal 2012.
On July 12, 2012, Mr. Michelin,
Mr. Wasserman, and Ms. Muller were each granted an option to purchase 12,500 shares of the Company's common stock with
an exercise price of $2.88 per share which were fully vested upon issuance for their service as the Office of the Chief Executive
for the months of April, May, and June 2012.
Annual awards were granted
at the shareholders meeting on September 13, 2012. Mr. Michelin, Ms. Muller and Mr. Wasserman were each granted an option
to purchase 6,250, 6,250 and 10,000 shares, respectively, of the Company's common stock with an exercise price of $2.40 per
share
On October 9, 2012, Mr. Michelin,
Mr. Wasserman, and Ms. Muller were each granted an option to purchase 15,625 shares of the Company's common stock with
an exercise price of $1.36 per share which were fully vested upon issuance for their service as the Office of the Chief Executive
for the months of July, August and September 2012.
On December 12, 2012,
Mr. Michelin, Mr. Wasserman, and Ms. Muller were each granted an option to purchase 6,250, 12,500 and 12,500 shares,
respectively, of the Company's common stock with an exercise price of $1.44 per share which were fully vested upon issuance
for their service as the Office of the Chief Executive for the month of October and part of November 2012.
Annual awards were granted
at the shareholders meeting on September 6, 2013. Mr. Rathmann and Mr. Wasserman were each granted an option to purchase
10,000 and 6,250 shares, respectively, of the Company's common stock with an exercise price of $3.04 per share.
On September 13, 2013,
Mr. Zecchini was granted an option to purchase 12,500 shares of the Company's common stock with an exercise price of
$3.20 per share when he joined the board.
On June 16, 2014, Dr.
Mandalam was granted an option to purchase 12,500 shares of the Company's common stock, with an exercise price of $3.60 per
share when he joined the board.
Annual awards were granted
at the shareholders meeting on August 29, 2014. Mr. Rathmann, Mr. Zecchini and Mr. Mandalam were each granted an
option to purchase 10,000, 6,250 and 6,250 shares, respectively, of the Company's common stock with an exercise price of
$3.36 per share.
On January 12, 2015, Mr. Berman
was granted an option to purchase 25,000 shares of the Company's common stock, with an exercise price of $3.04 per share
when he joined the board.
66
The following table sets
forth the director compensation of the non-employee directors of the Company during fiscal year 2014.
Name
Fees Earned
Or Paid in
Cash
($)(1)
Stock
Awards
($)
Option
Awards
($)(2)
All Other
Compensation
($)
Total
($)
Richard Rathmann
$
56,445
$
—
$
26,300
—
$
82,745
Stephen Wasserman
(3)
52,108
—
16,438
—
68,546
Edward Zecchini
26,400
—
34,632
—
61,032
Adam M. Michelin
(4)
24,000
$
—
—
—
24,000
Karen Muller
(4)
24,000
—
—
—
24,000
(1)
Fees earned or paid in cash as shown in this schedule
represent payments and accruals for directors' services earned during fiscal year 2014.
(2)
This column represents the total grant date fair value
of all stock options granted in fiscal 2014. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions. For information on the valuation assumptions with respect to the grants made in fiscal
2014, refer to Note 2 "
Summary of Significant Accounting Policies"
in the accompanying consolidated financial
statements.
(3)
Mr. Stephen Wasserman served as director of the
Company through the Company's annual meeting of stockholders on August 29, 2014.
(4)
Mrs. Muller and Mr. Michelin served as directors
of the Company through the Company's annual meeting of stockholders on September 6, 2013.
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
None.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets
forth information with respect to the beneficial ownership of the Company's common stock as of March 12, 2015, by each person
or group of affiliated persons known to the Company to beneficially own 5% or more of its common stock, each director, each named
executive officer, and all of its directors and named executive officers as a group. As of March 12, 2015, there were 7,538,364
shares of common stock outstanding. Unless otherwise indicated, the address of each beneficial owner listed below is c/o Cryoport,
Inc., 20382 Barents Sea Circle, Lake Forest, CA 92630.
The following table gives
effect to the shares of common stock issuable within 60 days of March 12, 2015, upon the exercise of all options and other rights
beneficially owned by the indicated stockholders on that date. The table reflects the anticipated 8-to-1 reverse stock split. Unless
otherwise indicated, the persons named in the table have sole voting and sole investment control with respect to all shares beneficially
owned.
Beneficial Owner
Number of Shares
of Preferred Stock
Beneficially Owned
Number of
Shares
of Common
Stock
Beneficially
Owned(2)
Percentage of Shares
of Common Stock
Beneficially
Owned(5)
Executive Officers and Directors:
Jerrell W. Shelton
15,481
616,374
(1)
7.6
%
Robert S. Stefanovich
75,595
(1)
1.0
%
Richard Rathmann
13,543
(4)
573,635
(1)
7.3
%
Edward Zecchini
18,021
(1)
*
Ramkumar Mandalam Ph.D.
15,938
(1)
*
Richard Berman
6,250
(1)
*
All directors and named executive officers as a group (6 persons)
1,305,813
(1)
15.3
%
Other Stockholders:
Cranshire Capital Master Fund(3)
431,204
(1)
5.4
%
Total for all Directors, Executive Officers and Other Stockholders
1,737,017
19.4
%
67
*
Represents less than
1%
(1)
Includes shares which
individuals shown above have the right to acquire as of March 12, 2015, or within 60 days thereafter, pursuant to outstanding
stock options, warrants and/or preferred stock as follows: Mr. Shelton—530,570 shares; Mr. Stefanovich—75,595
shares; Mr. Rathmann—335,465 of which 95,070 are individually owned by Mr. Rathmann and 238,137 are owned by GBR
Investments, LLC of which Mr. Rathmann is the manager; Mr. Zecchini—18,021; Dr. Mandalam—15,938 shares;
Mr. Berman—6,250 shares and Cranshire Capital—431,204 shares.
(2)
The number and percentage
of shares beneficially owned is determined in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, and the information
is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any
shares as to which the selling security holder has sole or shared voting power or investment power and also any shares which the
selling security holder has the right to acquire within 60 days. Includes preferred stock on an as-converted basis of 30 shares
of common stock for each share of preferred stock.
(3)
Cranshire Capital Master
Fund, Ltd. address is 3100 Dundee Road, Suite 703, Northbrook, IL 60062.
(4)
GBR Investments, LLC
of which Mr. Rathmann is the manager.
(5)
Includes preferred stock on an as-converted basis per the
                                                                                                                    conversion terms of the preferred stock.
Equity Compensation
Plan Information
We currently maintain
three equity compensation plans, referred to as the 2002 Stock Incentive Plan (the "2002 Plan"), the 2009 Stock Incentive
Plan (the "2009 Plan") and the 2011 Stock Incentive Plan (the "2011 Plan"). Our Compensation Committee
is responsible for making, reviewing and recommending grants of options and other awards under these plans which are approved by
the Board.
The 2002 Plan, which was
approved by our stockholders in October 2002, allows for the grant of options to purchase up to 62,500 shares of the Company's
common stock. The 2002 Plan provides for the granting of options to purchase shares of our common stock at prices not less than
the fair market value of the stock at the date of grant and generally expire 10 years after the date of grant. The stock options
are subject to vesting requirements, generally three or four years. The 2002 Plan also provides for the granting of restricted
shares of common stock subject to vesting requirements. The 2002 Plan has expired as of October 2012, and thus no shares are available
for future issuances.
The 2009 Plan, which was
approved by our stockholders at our 2009 Annual Meeting of Stockholders held on October 9, 2009, provides for the grant of
stock-based incentives. The 2009 Plan allows for the grant of up to 150,000 shares of our common stock for awards to our officers,
directors, employees and consultants. The 2009 Plan provides for the grant of incentive stock options, nonqualified stock options,
restricted stock rights, restricted stock, performance share units, performance shares, performance cash awards, stock appreciation
rights, and stock grant awards. The 2009 Plan also permits the grant of awards that qualify for the "performance-based compensation"
exception to the $1,000,000 limitation on the deduction of compensation imposed by Section 162(m) of the Code. As of March
12, 2015, a total of 37,971 shares of our common stock remained available for future grants under the 2009 Plan.
The 2011 Plan, as amended,
which was approved by our stockholders at our 2011 Annual Meeting of Stockholders held on September 22, 2011 and, with respect
to the amendments, at our 2012, 2013 and 2014 Annual Meeting of Stockholders held on September 13, 2012, September 6, 2013 and
August 29, 2014, respectively, provides for the grant of stock-based incentives. The 2011 Plan allows for the grant of up to 1,737,500
shares of our common stock for awards to our officers, directors, employees and consultants. The 2011 Plan provides for the grant
of incentive stock options, nonqualified stock options, restricted stock rights, restricted stock, performance share units, performance
shares, performance cash awards, stock appreciation rights, and stock grant awards. The 2011 Plan also permits the grant of awards
that qualify for the "performance-based compensation" exception to the $1,000,000 limitation on the deduction of compensation
imposed by Section 162(m) of the Code. Awards may be granted under the 2011 Plan until September 21, 2021 or until all
shares available for Awards under the 2011 Plan have been purchased or acquired unless the stockholders of the Company vote to
approve an extension of the 2011 Plan prior to such expiration date. As of March 12, 2015, a total of 305,123 shares remained available
for future grants under the 2011 Plan.
68
In addition to the stock
options issued pursuant to the Company's three stock incentive plans, the Company has granted warrants to employees, officers,
non-employee directors and consultants. The warrants are generally not subject to vesting requirements and have ten-year terms.
The following table sets
forth certain information as of December 31, 2014 concerning the Company's common stock that may be issued upon the exercise
of options or warrants or pursuant to purchases of stock under the 2002 Plan, the 2009 Plan, the 2011 Plan and other stock based
compensation:
Plan Category
(a)
Number of Securities
to be Issued Upon the
Exercise of
Outstanding Options
and Warrants
(b)
Weighted-Average
Exercise Price of
Outstanding
Options and
Warrants
(c)
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in Column (a))
Equity compensation plans approved by stockholders
1,454,320
$
3.49
361,220
Equity compensation plans not approved by stockholders
(1)
1,245,180
$
4.13
N/A
2,699,500
361,220
(1)
During November 5, 2012 through December 31, 2014, a total of 1,212,322 options were granted to employees outside of an option plan. In the past the Company has issued warrants to purchase 40,927 shares of common stock in exchange for services provided to the Company, of which warrants to purchase 32,857 shares of common stock are outstanding. The exercise prices ranged from $22.40 to $86.40 and generally vested upon issuance. Fifteen consultants and former officers and directors received warrants to purchase 40,927 shares of common stock in this manner.
Change in
Control Agreements
There are no understandings,
arrangements or agreements known by management at this time which would result in a change in control of the Company or any subsidiary.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
The Company has established
policies and other procedures regarding approval of transactions between the Company and any employee, officer, director, and certain
of their family members and other related persons, including those required to be reported under Item 404 of Regulation S-K.
These policies and procedures are generally not in writing, but are evidenced by long standing principles set forth in our Code
of Conduct or adhered to by our Board. As set forth in the Audit Committee Charter, the Audit Committee reviews and approves all
related-party transactions after reviewing such transaction for potential conflicts of interests and improprieties. Accordingly,
all such related-party transactions are submitted to the Audit Committee for ongoing review and oversight. Generally speaking,
we enter into related-party transactions only on terms that we believe are at least as favorable to our company as those that we
could obtain from an unrelated third party.
The following related-party
transaction were approved or ratified by at least two independent directors and future material affiliated transactions will be
approved by a majority of the independent directors who do not have an interest in the transaction and who had access, at the issuer's
expense, to issuer's or independent legal counsel.
On May 9, 2013, Richard
Rathmann, Director, invested $100,000 in the Bridge Notes offered by the Company to certain accredited investors. For information
on terms related to the Bridge Notes, refer to Note 8 "Convertible Debentures Payable" in the accompanying March 31,
2014 consolidated financial statements.  In addition, on July 12, 2013, GBR Investments, LLC, invested $100,000 in the Bridge
Notes offered by the Company to certain accredited investors and also received a warrant to purchase 50,000 shares of common stock
at an exercise price of $2.00 per share, pursuant to the terms of such offering. Richard Rathmann is the Manager of GBR Investments,
LLC and is considered an indirect beneficial owner of these securities.
69
During the year ended
March 31, 2014, the Company issued to certain accredited investors various unsecured promissory notes with the terms as described
under Note 7 in the accompanying March 31, 2014 consolidated financial statements. These unsecured promissory notes included $120,000
of the 5% Bridge Notes issued to Jerrell Shelton, the Company's Chief Executive Officer, $100,000 of the Bridge Notes issued
to Richard Rathmann, a member of the Board of Directors of the Company, $200,000 of the Bridge Notes and $100,000 of the 5% Bridge
Notes issued to GBR Investments, LLC, of which Richard Rathmann, is the manager. In May 2014, both note holders elected to convert
all principal and interest into a newly established Class A Convertible Preferred Stock and warrants to purchase common stock of
Cryoport as further described in Note 15 in the accompanying March 31, 2014 consolidated financial statements. In November 2014,
both Mr. Shelton and GBR Investments, LLC participated in the Class A convertible preferred stock offering and the Company issued
4,167 shares of Class A convertible preferred stock each in exchange for an aggregate amount of $100,000.
As of March 12, 2015,
we had an aggregate principal balance of $1.3 million, in unsecured indebtedness owed to five related parties, including four former
members of the Board of Directors, representing working capital advances made to us from February 2001 through March 2005. Accrued
interest related to these notes amounted to $1,636 as of March 12, 2015.
In March 2015, we entered
into definitive agreements relating to the exchange or amendment of the notes evidencing such working capital advances. Three of
the notes, which as of March 12, 2015 had an outstanding principal balance of $923,791, were amended and the holders received warrants
for the purchase 56,021, 33,336, and 26,118 shares, respectively, of the our common stock at an exercise price of $4.00 per
share, exercisable on March 2, 2015 and expiring on March 1, 2020, and warrants to purchase 1,250, 625, and 625 shares, respectively,
of the our common stock, exercisable on March 2, 2015 and expiring on March 1, 2020, to reimburse the three note holders for any
fees or other expenses incurred in connection with this transaction. The notes, as amended, require interest payments on a calendar
quarterly basis and all outstanding principal and accrued interest on the maturity date, which is the earlier to occur of (i) March
1, 2016, (ii) the sale of all or substantially all of our assets, or (iii) the merger, consolidation or other similar reorganization
of the Company or an affiliate of our Company with another entity. Under the terms of such note, upon the closing of a public offering
pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $5,000,000
of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of Common Stock among
the sale of other securities, the holder has the option to convert into the securities issued in such offering at a twenty percent
(20%) to the price per share (or per unit, if applicable) of the securities issued by the Company in such offering. The securities
issued to the holder upon conversion will be restricted securities and are not being registered pursuant to this registration statement.
One note was exchanged
for (i) a new convertible promissory note with an original principal amount equal to the outstanding principal and interest of
the original note, and (ii) a warrant to purchase 2,235 shares of the Registrant's Common Stock at an exercise price of
$4.00 per share, exercisable on February 20, 2015 and expiring on February 19, 2018. The new note, which as of March 12, 2015
had an outstanding principal balance of $35,761, requires interest payments on a calendar quarterly basis and all outstanding
principal and accrued interest on the maturity date, which is March 1, 2016. Under the terms of such note, upon the closing of
a public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at
least $5,000,000 of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of
Common Stock among the sale of other securities, the holder has the option to convert into the securities issued in such offering
at a twenty percent (20%) to the price per share (or per unit, if applicable) of the securities issued by the Company in such
offering. The securities issued to the holder upon conversion will be restricted securities and are not being registered pursuant
to this registration statement.
One note, which as of March 12, 2015 had an outstanding principal balance of $338,452, as amended,
now provides for interest at a rate of 6% per annum commencing on March 13, 2015; however, no interest payments will be due if
no event of default occurs and if the Company (i) complies with its regular payment obligations, reimburses the payee for
attorneys' fees in connection with the negotiation of the Note Amendment, up to a maximum amount of $1,000, on the later
of (A) March 13, 2015, or (B) three (3) days after receiving written notice from the payee of the amount of attorneys' fees
incurred by payee, and (iii) the Company immediately pays all unpaid amounts due and payable in full before the earlier of
May 1, 2016 or at the same time that payee(s) of any other promissory note(s) with the Company that were issued in 2005 are
paid in full before May 1, 2016, other than (Y) notes that are satisfied upon conversion into common stock, warrants or any other
equity of the Company, or (Z) notes that have been paid in full before March 2, 2015. All principal and interest under the
Original Note, as amended by the Note Amendment, will be due and shall be paid on May 1, 2016. The note requires monthly payments
of $20,000, except for the month of June 2015, where the monthly payment is $70,000.
70
SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange
Act requires the Company's directors and executive officers, and persons who own more than 10% of a registered class of the
Company's equity securities, to file with the SEC reports of beneficial ownership and reports of changes in beneficial ownership
in the Company's securities. Such directors, executive officers and 10% stockholders are also required to furnish the Company
with copies of all Section 16(a) forms they file.
Based solely on a review
of the copies of such forms received by it, the Company believes that during fiscal year 2014, all Section 16(a) filings applicable
to its directors, officers, and 10% stockholders were filed on a timely basis.
DESCRIPTION OF SECURITIES
Our authorized capital
consists of 250,000,000 shares of common stock, $0.001 par value per share, of which 7,538,364 shares of common stock were issued
and outstanding as of March 12, 2015, and 2,500,000 shares of "blank check" preferred stock, $0.001 par value per share,
of which 800,000 shares have been designated as Class A Convertible Preferred Stock and 400,000 shares have been designated as
Class B Convertible Preferred Stock. 454,750 shares of Class A Convertible Preferred Stock and 26,134 shares of Class B Convertible
Preferred Stock were issued and outstanding as of March 12, 2015. Upon the closing of this offering, the outstanding Class A Convertible
Preferred Stock and the Class B Convertible Preferred Stock will automatically convert into common stock and warrants. The following
description is a summary and is qualified in its entirety by our Amended and Restated Articles of Incorporation and Bylaws as currently
in effect, copies of which are referenced as exhibits herein, and the provisions of the Nevada Revised Statutes.
Common Stock
Subject to the preferential
rights of any outstanding preferred stock, each holder of common stock is entitled to receive ratable dividends, if any, as may
be declared by the Board of Directors out of funds legally available for the payment of dividends. As of the date of this prospectus,
we have not paid any dividends on our common stock, and none are contemplated in the foreseeable future. We anticipate that all
earnings that may be generated from our operations will be used to finance our growth.
Holders of common stock
are entitled to one vote for each share held of record. There are no cumulative voting rights in the election of directors. Thus
the holders of more than 50% of the outstanding shares of common stock can elect all of our directors if they choose to do so.
The holders of our common
stock have no preemptive, subscription, conversion or redemption rights. Upon our liquidation, dissolution or winding-up, the holders
of our common stock are entitled to receive our assets pro rata.
Blank Check Preferred
Stock
Our Board of Directors
is empowered, without further action by stockholders, to issue from time to time one or more series of preferred stock, with such
designations, rights, preferences and limitations as the Board may determine by resolution. The rights, preferences and limitations
of separate series of preferred stock may differ with respect to such matters among such series as may be determined by the Board,
including, without limitation, the rate of dividends, method and nature of payment of dividends, terms of redemption, amounts payable
on liquidation, sinking fund provisions (if any), conversion rights (if any) and voting rights. Certain issuances of preferred
stock may have the effect of delaying or preventing a change in control of our company that some stockholders may believe is not
in their interest.
Class A Convertible
Preferred Stock and Class B Convertible Preferred Stock
This registration statement
does not register the resale of any shares of Class A Convertible Preferred Stock Class or Class B Convertible Preferred Stock.
71
Dividends accrue on shares
of Class A Convertible Preferred Stock and Class B Convertible Preferred Stock (the "Preferred Stock") at the rate
of $0.96 per annum. Such dividends accrue day-to-day and are cumulative, and payable when, as, and if declared by the Board of
Directors. In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Preferred
Stock then outstanding are entitled to receive a preference payment equal to $12.00 per share (subject to appropriate adjustment
in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid
thereon, whether or not declared, together with any other dividends declared but unpaid thereon. Shares of Preferred Stock vote
together with the common stock on an as-converted basis; provided that the holder of Class A Convertible Preferred Stock will be
entitled to cast 3.75 votes for each whole share of Class A Convertible Preferred Stock held by such holder as of the record date
for determining stockholders entitled to vote on such matter. At any time after September 1, 2014, shares of Preferred Stock are
convertible into shares of Common Stock, at the rate of 3.75 shares of Common Stock for one share of Preferred Stock. In addition,
accrued but unpaid dividends on the Preferred Stock will also be convertible into common stock after September 1, 2014 at the rate
of one share for each $3.20 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination,
certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving
the Company. Shares of the Preferred Stock are subject to redemption by the Company at any time on or after January 15, 2017, upon
payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar
recapitalization) plus all accrued but unpaid dividends thereon. The Preferred Stock is subject to a liquidation preference over
common stock equal to $12 per share and the unpaid accrued dividend. Holders of the Preferred Stock will vote with holders of the
Company's common stock, but will have 3.75 votes per share of Preferred Stock held compared to one vote for each share of
common stock.
Upon the closing of a
public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least
$5,000,000 of gross cash proceeds to the Company for the sale of shares of Common Stock or includes the sale of shares of Common
Stock among the sale of other securities (a "Qualified Offering"), the Class A Preferred Stock and Class B Preferred
Stock will automatically convert into the securities issued in such Qualified Offering at a twenty percent (20%) to the price per
share (or per unit, if applicable) of the securities issued by the Company in such Qualified Offering. The securities issued to
the holder upon conversion will be restricted securities and are not being registered pursuant to this registration statement.
Warrants
Each purchaser in this
offering will receive a warrant to purchase one share of our common stock for each share of common stock it purchases in this offering.
The warrants are exercisable at an exercise price of $4.84 per share of common stock. The warrants are exercisable starting on
______________ and expire on ______________, 2019.
The warrant provides that
the warrant exercise price is subject to adjustment from time to time if we (i) pay a stock dividend or otherwise make a distribution
or distributions on shares of our common stock or any other equity or equity equivalent securities payable in shares of common
stock, (ii) subdivide outstanding shares of common stock into a larger number of shares, (iii) combine (including by
way of reverse stock split) outstanding shares of common stock into a smaller number of shares or (iv) issue by reclassification
of shares of the common stock any shares of our capital stock. For example, if we were to conduct a 4-for-1 stock split such that
each outstanding share became four shares of common stock, the exercise price of the warrant would be reduced to one-quarter of
the exercise price in effect immediately prior to the stock split and the number of shares acquirable upon a subsequent exercise
of the warrant shall be multiplied by four.
Transfer Agent and Registrar
The Transfer Agent and
Registrar for our common stock is Continental Stock Transfer & Trust Company, 17 Battery Place, 8th Floor, New York, New
York 10004.
Nevada Anti-Takeover
Law and Charter and Bylaws Provisions
Nevada revised statutes
sections 78.378 to 78.3793 provide state regulation over the acquisition of a controlling interest in certain Nevada corporations
unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply. This
statute currently does not apply to our Company because in order to be applicable we would have to have as shareholders a specified
number of Nevada residents and we would have to do business in Nevada directly or through an affiliate.
UNDERWRITING
Aegis Capital Corp. is
acting as the representative of the underwriters of the offering. We have entered into an underwriting agreement dated [•],
2015 with the representative. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each
underwriter named below and each underwriter named below has agreed, severally but not jointly, to purchase from us, at the public
offering price less the underwriting discount set forth on the cover page of this prospectus, the number of shares of common stock
and warrants listed next to its name in the following table:
72
Underwriters
Number of Shares of
common stock and
warrants
[                 ]
[                 ]
Aegis Capital Corp.
Total
The underwriters are
committed to purchase all the shares of common stock and warrants offered by us other than those covered by the option to purchase
additional shares of common stock and warrants described below, if they purchase any shares of common stock and warrants. The
obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement.
Furthermore, pursuant to the underwriting agreement, the underwriters' obligations are subject to customary conditions,
representations and warranties contained in the underwriting agreement, such as receipt by the underwriters of officers'
certificates and legal opinions.
We have agreed to indemnify
the underwriters against specified liabilities, including liabilities under the Securities Act of 1933, and to contribute to payments
the underwriters may be required to make in respect hereof.
The underwriters are offering
the shares of common stock and warrants, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
Over-allotment Option
We have granted the underwriters
an over-allotment option. This option, which is exercisable for up to 45 days after the date of this prospectus, permits the underwriters
to purchase a maximum of 511,364 additional shares of the common stock and warrants (15% of the shares of common stock and warrants
sold in this offering) from us to cover over-allotments, if any. If the underwriters exercise all or part of this option, they
will purchase shares of common stock and warrants covered by the option at the public offering price per share of common stock
and warrant to purchase one share of common stock that appears on the cover page of this prospectus, less the underwriting discount.
If this option is exercised in full, the total offering price to the public will be $[•] and the total net proceeds, before
expenses, to us will be $[•].
Discount
The following table shows
the public offering price, underwriting discount, and proceeds before expense to us. The information assumes either no exercise
or full exercise by the underwriters of the over-allotment option.
Total
Per Share of
Common Stock
and Warrant to
purchase one Share
of Common Stock
Without Over-
Allotment
With Over-
Allotment
Public Offering Price
$
4.40
$
15,000,000
$
17,250,000
Underwriting discount (1)
$
0.31
$
1,050,000
$
1,207,500
Non-accountable expense allowance (2)
$
0.04
$
150,000
$
150,000
Proceeds, before offering expenses, to us
$
4.05
$
13,800,000
$
15,892,500
73
(1) Underwriting discount
is $0.31 per share of common stock and warrant to purchase one share of common stock (7% of the price of the shares of common stock
and warrants sold in this offering).
(2) The non-accountable
expense allowance of 1% is not payable with respect to the shares of common stock and warrants sold upon exercise of the underwriters'
over-allotment option.
The underwriters propose
to offer the shares of common stock and warrants directly to the public at the public offering price set forth on the cover page
of this prospectus. In addition, the underwriters may offer some of the shares of common stock and warrants to other securities
dealers at such price less a concession of $[*] per share of common stock and warrant to purchase one share of common stock. After
this offering, this offering price and concessions and discounts to brokers and dealers and other selling terms may from time to
time be changed by the underwriters.
We have agreed to pay
the underwriters' expenses relating to the offering, including (a) all filing fees and communication expenses relating to
the registration of the shares of common stock and warrants to be sold in this offering (including any over-allotment shares of
common stock and warrants); (b) all filing fees associated with the review of the offering by FINRA; (c) all fees and expenses
relating to the listing of the common stock and warrants on the NASDAQ Capital Market; (d) all fees, expenses and disbursements
relating to background checks of our officers and directors in an amount not to exceed $5,000 per individual and $15,000 in the
aggregate; (e) all fees, expenses and disbursements relating to the registration or qualification of the shares of common stock
and warrants under the "blue sky" securities laws of such states and other jurisdictions as the representative may
reasonably designate (including, without limitation, all filing and registration fees, and the reasonable fees and disbursements
of "blue sky" counsel, it being agreed that such fees and expenses will be limited as follows: (1) if the offering
is commenced on the NASDAQ Capital Market, the Company will make a payment of $5,000 to such counsel at closing, or (2) if the
offering is commenced on the Over-the-Counter Bulletin Board, the Company will make a payment of $10,000 to such counsel upon the
commencement of "blue sky" work by such counsel and an additional $5,000 at closing); (f) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the shares of common stock and warrants under the securities laws of
such foreign jurisdictions as the representative may reasonably designate; (g) the costs of all mailing and printing of the underwriting
documents (including, without limitation, the Underwriting Agreement, any blue sky surveys and, if appropriate, any agreement among
underwriters, selected dealers' agreement, underwriters' questionnaire and power of attorney), registration statements,
prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final prospectuses as the representative
may reasonably deem necessary; (h) the costs and expenses of a public relations firm; (i) the costs of preparing, printing and
delivering certificates representing the common stock and warrants to be offered in this offering; (j) fees and expenses of the
transfer agent for the common stock; (k) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from
the Company to the underwriters; (l) the costs associated with post-closing advertising of the Offering in the national editions
of the Wall Street Journal and New York Times with the prior consent of the Company; (m) the costs associated with bound volumes
of the public offering materials as well as commemorative mementos and lucite tombstones, each of which the Company or its designee
shall provide within a reasonable time after the consummation of the offering in such quantities as the representative may reasonably
request; (n) the fees and expenses of the Company's accountants; (o) the fees and expenses of the Company's legal counsel
and other agents and representatives; (p) the $21,775 cost associated with the representative's use of Ipreo's book-building,
prospectus tracking and compliance software for this offering; and (q) up to $20,000 of the representative's actual accountable
"road show" expenses for the Offering.
We estimate that the total
expenses of this offering, excluding the underwriting discount and the non-accountable expense allowance, will be approximately
$200,000.
Lock-Up Agreements
All of our officers, directors
and stockholders beneficially owning 5% or more of our outstanding common stock expect to enter into lock up agreements with the
representative prior to the commencement of this offering pursuant to which each of these persons or entities, for a period of
180 days from the effective date of the registration statement of which this prospectus forms a part, without the prior consent
of the representative, agree not to (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of,
directly or indirectly, any of our equity securities or securities convertible into or exercisable or exchangeable for shares of
our common stock owned or acquired on or prior to the closing of this offering (or any securities acquired after the closing of
this offering upon the conversion , exercise or exchange of such securities); (2) enter into any swap or other arrangement that
transfer to another, in whole or in part, any of the economic consequences of ownership of the common stock, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of common stock or such other securities, in cash or otherwise;
(3) make any demand for or exercise any right with respect to the registration of shares of our common stock; or (4) publicly disclose
the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement
relating to our securities. The lock-up restrictions are subject to certain exceptions and limitations. The restricted lock-up
period described above may be extended if (a) during the last 17 days of the lock-up period the Company issues an earnings release
or material news or a material event relating to the Company occurs or (b) prior to the expiration of the lock-up period, the Company
announces we will release earnings results or becomes aware that material news or a material event will occur in the 16-day beginning
on the last day of the lock-up period, in which case the restrictions imposed by the lock-up agreements will continue to apply
until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of such material
news or material event.
74
Representative's
Warrant
We have agreed to issue
to the representative a warrant to purchase up to a total of 136,364 shares of common stock (4% of the shares of common
stock included in the shares of common stock and warrants sold, excluding the over-allotment). The shares of common stock issuable
upon exercise of this warrant are identical to those offered by this prospectus. This warrant is exercisable at any time, and from
time to time, in whole or in part, at $6.05 per share (137.5% of the price of the shares of common stock and warrants sold
in this offering), commencing on a date which is one year from the effective date of the registration statement and expiring five
years from the effective date of the registration statement. The warrant may also be exercised on a cashless basis. The warrant
and the 136,364 shares of common stock underlying the warrant have been deemed compensation by FINRA and are therefore subject
to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The representative (or permitted assignees under the Rule) will not
sell, transfer, assign, pledge, or hypothecate this warrant or the securities underlying this warrant, nor will it engage in any
hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of this warrant
or the underlying securities for a period of 180 days from the date of the offering. Additionally, the warrant may not be sold
transferred, assigned, pledged or hypothecated for a one-year period (including the foregoing 180 day period) following the effective
date of the registration statement except to any underwriter and selected dealer participating in this offering and their bona
fide officers or partners. The warrant grants holders "piggy back" registration rights. These rights apply
to all of the securities directly and indirectly issuable upon exercise of the warrant. We will bear all fees and expenses attendant
to registering the securities issuable on exercise of the warrant, other than underwriting commissions incurred and payable by
the holders. The exercise price and number of shares issuable upon exercise of the warrant may be adjusted in certain circumstances
including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation.
However, the warrant exercise price or underlying shares will not be adjusted for issuances of common stock at a price below the
warrant exercise price.
Right of First Refusal
For a period of [24] months
from the effective date of the offering, the representative has an irrevocable right of first refusal to act as sole and exclusive
investment banker, sole and exclusive book-runner, sole and exclusive financial advisor, sole and exclusive underwriter and/or
sole and exclusive placement agent, at the representative's sole and exclusive discretion, for each and every future public
and private equity and debt offering of the Company (or any successor or subsidiary of the Company) during such period.
Electronic Offer, Sale
and Distribution of Securities
A prospectus in electronic
format may be made available on the websites maintained by one or more of the underwriters or selling group members, if any, participating
in this offering and one or more of the underwriters participating in this offering may distribute prospectuses electronically.
The representative may agree to allocate a number of shares of common stock and warrants to underwriters and selling group members
for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group
members that will make internet distributions on the same basis as other allocations. Other than the prospectus in electronic format,
the information on these websites is not part of, nor incorporated by reference into, this prospectus or the registration statement
of which this prospectus forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter,
and should not be relied upon by investors.
Stabilization
In connection with this
offering, the underwriters may engage in over-allotment transactions, syndicate-covering transactions, stabilizing transactions,
penalty bids and purchases to cover positions created by short sales.
●
Stabilizing transactions
permit bids to purchase securities, so long as stabilizing bids do not exceed a specified maximum and are engaged in for the purpose
of preventing or retarding a decline in the market price of the securities while the offering is in progress.
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●
Over-allotment transactions involve sales by the underwriters of securities in excess of the number
of securities the underwriters are obligated to purchase. This creates a syndicate short position, which may be either a covered
short position or a naked short position. In a covered short position, the number of securities over-allotted by the underwriters
is not greater than the number of securities that they may purchase in the over-allotment option. In a naked short position, the
number of securities involved is greater than the number of securities in the over-allotment option. The underwriters may close
out any covered short position by either exercising their over-allotment option or purchasing shares of securities in the open
market.
●
Syndicate covering transactions involve the purchase of securities in the open market after the
distribution has been completed in order to cover syndicate short positions. In determining the source of securities to close out
the short position, the underwriters will consider, among other things, the price of securities available for purchase in the open
market as compared to the price at which they may purchase securities through the exercise of the over-allotment option. If the
underwriters sell more shares of securities than could be covered by the exercise of the over-allotment option, creating a naked
short position, the position can be closed out only by buying securities in the open market. A naked short position is more likely
to be created if the underwriters are concerned that after pricing there could be downward pressure on the price of the securities
in the open market that could adversely affect investors who purchase in this offering.
●
Penalty bids permit the representative to reclaim a selling concession from a syndicate member
when the securities originally sold by the syndicate member are purchased in stabilizing or syndicate covering transactions to
cover syndicate short positions.
These stabilizing transactions,
syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our securities
or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open
market may be higher than it would be otherwise in the absence of these transactions.
Neither we nor the underwriters
make any representation or prediction as to the effect that the transactions described above may have on the prices of our securities.
These transactions may occur on the NASDAQ Capital Market or on any other trading market. If any of these transactions are commenced,
they may be discontinued without notice at any time.
Passive Market Making
In connection with this
offering, underwriters and selling group members, if any, may engage in passive market making transactions in our common stock
in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales
of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price
not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market
maker's bid, then that bid must then be lowered when specified purchase limits are exceeded.
Other Relationships
The underwriters and their
affiliates have provided, or may in the future provide, various investment banking, commercial banking, financial advisory, brokerage
and other services to us and our affiliates for which services they have received, and may in the future receive, customary fees
and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their affiliates
may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities)
and financial instruments (including bank loans) for their own accounts and for the accounts of their customers and such investment
and securities activities may involve securities and/or instruments of our company. The underwriters and their affiliates may also
make investment recommendations and/or publish or express independent research views in respect of such securities or instruments
and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Offer Restrictions Outside
the United States
Other than in the United
States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this
prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be
offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection
with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this
prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by
this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
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Australia
This prospectus is not
a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian Securities and
Investments Commission and does not purport to include the information required of a disclosure document under Chapter 6D of the
Australian Corporations Act. Accordingly, (1) the offer of the securities under this prospectus is only made to persons to whom
it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act under one or more exemptions
set out in section 708 of the Australian Corporations Act, (2) this prospectus is made available in Australia only to those persons
as set forth in clause (1) above, and (3) the offeree must be sent a notice stating in substance that by accepting this offer,
the offeree represents that the offeree is such a person as set forth in clause (1) above, and, unless permitted under the Australian
Corporations Act, agrees not to sell or offer for sale within Australia any of the securities sold to the offeree within 12 months
after its transfer for the offeree under this prospectus.
China
The information in this
document does not constitute a public offer of the securities, whether by way of sale or subscription, in the People's Republic
of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau Special Administrative Region
and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal or natural persons other than
directly to "qualified domestic institutional investors."
European Economic
Area — Belgium, Germany, Luxembourg and the Netherlands
The information in this
document has been prepared on the basis that all offers of the shares of common stock and warrants will be made pursuant to an
exemption under the Directive 2003/71/EC ("Prospectus Directive"), as implemented in Member States of the European
Economic Area (each, a "Relevant Member State"), from the requirement to produce a prospectus for offers of securities.
An offer to the public
of the shares of common stock and warrants has not been made, and may not be made, in a Relevant Member State except pursuant to
one of the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:
•
to legal entities that are authorized or regulated
to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
•
to any legal entity that has two or more of (1) an
average of at least 250 employees during its last fiscal year; (2) a total balance sheet of more than €43,000,000 (as shown
on its last annual unconsolidated or consolidated financial statements) and (3) an annual net turnover of more than €50,000,000
(as shown on its last annual unconsolidated or consolidated financial statement);
•
to fewer than 100 natural or legal persons (other than
qualified investors within the meaning of Article 2(1)I of the Prospectus Directive) subject to obtaining the prior consent of
the company or any underwriter for any such offer; or
•
in any other circumstances falling within Article 3(2)
of the Prospectus Directive, provided that no such offer of the shares of common stock and warrants shall result in a requirement
for the publication by the company of a prospectus pursuant to Article 3 of the Prospectus Directive.
France
This document is not being
distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within
the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier) and Articles 211-1
et seq. of the General Regulation of the French Autorité des marchés financiers ("AMF"). The not been
offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This document and any
other offering material relating to the shares of common stock and warrants have not been, and will not be, submitted to the AMF
for approval in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public
in France.
77
Such offers, sales and
distributions have been and shall only be made in France to (1) qualified investors (investisseurs qualifiés) acting for
their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1, D.754-1 and
D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (2) a restricted number of non-qualified
investors (cercle restreint d'investisseurs non-qualifiés) acting for their own account, as defined in and in accordance
with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing
regulation.
Pursuant to Article 211-3
of the General Regulation of the AMF, investors in France are informed that the shares of common stock and warrants cannot be distributed
(directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and
L.621-8 to L.621-8-3 of the French Monetary and Financial Code.
Ireland
The information in this
document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved
by any Irish regulatory authority as the information has not been prepared in the context of a public offering of securities in
Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the "Prospectus Regulations").
The shares of common stock and warrants have not been offered or sold, and will not be offered, sold or delivered directly or indirectly
in Ireland by way of a public offering, except to (1) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations
and (2) fewer than 100 natural or legal persons who are not qualified investors.
Israel
The shares of common stock
and warrants offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or
ISA, nor have such shares of common stock and warrants been registered for sale in Israel. The shares and warrants may not be offered
or sold, directly or indirectly, to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits,
approvals or licenses in connection with the offering or publishing the prospectus; nor has it authenticated the details included
herein, confirmed their reliability or completeness, or rendered an opinion as to the quality of the shares of common stock and
warrants being offered. Any resale in Israel, directly or indirectly, to the public of the shares of common stock and warrants
offered by this prospectus is subject to restrictions on transferability and must be effected only in compliance with the Israeli
securities laws and regulations.
Italy
The offering of the shares
of common stock and warrants in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission
(Commissione Nazionale per le Società e la Borsa, "CONSOB") pursuant to the Italian securities legislation and,
accordingly, no offering material relating to the shares of common stock and warrants may be distributed in Italy and such securities
may not be offered or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February
1998 ("Decree No. 58"), other than:
•
to Italian qualified investors, as defined in Article
100 of Decree no. 58 by reference to Article 34-ter of CONSOB Regulation no. 11971 of 14 May 1999 ("Regulation no. 1197l")
as amended ("Qualified Investors"); and
•
in other circumstances that are exempt from the rules
on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter of Regulation No. 11971 as amended.
Any offer, sale or delivery
of the shares of common stock and warrants or distribution of any offer document relating to the shares of common stock and warrants
in Italy (excluding placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
•
made by investment firms, banks or financial intermediaries
permitted to conduct such activities in Italy in accordance with Legislative Decree No. 385 of 1 September 1993 (as amended),
Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other applicable laws; and
•
in compliance with all relevant Italian securities,
tax and exchange controls and any other applicable laws.
Any subsequent distribution
of the shares of common stock and warrants in Italy must be made in compliance with the public offer and prospectus requirement
rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure
to comply with such rules may result in the sale of such shares of common stock and warrants being declared null and void and in
the liability of the entity transferring the shares of common stock and warrants for any damages suffered by the investors.
78
Japan
The shares of common stock
and warrants have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law
of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirements
applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article
2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the shares of common stock and warrants may
not be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified
Institutional Investors. Any Qualified Institutional Investor who acquires the shares of common stock and warrants may not resell
them to any person in Japan that is not a Qualified Institutional Investor, and acquisition by any such person of the shares of
common stock and warrants is conditional upon the execution of an agreement to that effect.
Portugal
This document is not being
distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários) in Portugal,
within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários). The shares
of common stock and warrants have not been offered or sold and will not be offered or sold, directly or indirectly, to the public
in Portugal. This document and any other offering material relating to the shares of common stock and warrants have not been, and
will not be, submitted to the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários)
for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public
in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code.
Such offers, sales and distributions of the shares of common stock and warrants in Portugal are limited to persons who are "qualified
investors" (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not
distribute it or the information contained in it to any other person.
Sweden
This document has not
been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly,
this document may not be made available, nor may the shares of common stock and warrants be offered for sale in Sweden, other than
under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980)
(Sw. lag (1991:980) om handel med finansiella instrument). Any offering of the shares of common stock and warrants in Sweden is
limited to persons who are "qualified investors" (as defined in the Financial Instruments Trading Act). Only such investors
may receive this document and they may not distribute it or the information contained in it to any other person.
Switzerland
The shares of common stock
and warrants may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or
on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the
disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange
or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the shares of common
stock and warrants may be publicly distributed or otherwise made publicly available in Switzerland.
Neither this document
nor any other offering material relating to the shares of common stock and warrants have been or will be filed with or approved
by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of the shares of common stock
and warrants will not be supervised by, the Swiss Financial Market Supervisory Authority (FINMA).
This document is personal
to the recipient only and not for general circulation in Switzerland.
79
United Arab Emirates
Neither this document
nor the shares of common stock and warrants have been approved, disapproved or passed on in any way by the Central Bank of the
United Arab Emirates or any other governmental authority in the United Arab Emirates, nor have we received authorization or licensing
from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or
sell the shares of common stock and warrants within the United Arab Emirates. This document does not constitute and may not be
used for the purpose of an offer or invitation. No services relating to the shares of common stock and warrants, including the
receipt of applications and/or the allotment or redemption of such shares of common stock and warrants, may be rendered within
the United Arab Emirates by us.
No offer or invitation
to subscribe for the shares of common stock and warrants is valid or permitted in the Dubai International Financial Centre.
United Kingdom
Neither the information
in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority
in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended
("FSMA")) has been published or is intended to be published in respect of the shares of common stock and warrants.
This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA)
in the United Kingdom, and the shares of common stock and warrants may not be offered or sold in the United Kingdom by means of
this document, any accompanying letter or any other document, except in circumstances that do not require the publication of a
prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part,
nor may its contents be disclosed by recipients to any other person in the United Kingdom.
Any invitation or inducement
to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the
shares of common stock and warrants has only been communicated or caused to be communicated and will only be communicated or caused
to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.
In the United Kingdom,
this document is being distributed only to, and is directed at, persons (1) who have professional experience in matters relating
to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial
Promotions) Order 2005 ("FPO"), (2) who fall within the categories of persons referred to in Article 49(2)(a) to (d)
(high net worth companies, unincorporated associations, etc.) of the FPO or (3) to whom it may otherwise be lawfully communicated
(together "relevant persons"). The investments to which this document relates are available only to, and any invitation,
offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not
act or rely on this document or any of its contents.
LEGAL MATTERS
Certain legal matters
in connection with the offering and the validity of the common stock offered by this prospectus was passed upon by Snell &
Wilmer L.L.P., Costa Mesa, California. Certain legal matters in connection with the offering of common stock and warrants offered
by this prospectus was passed upon for the underwriter by Bryan Cave LLP, New York, New York.
EXPERTS
The consolidated financial
statements of Cryoport, Inc. as of March 31, 2014 and 2013 and for the years then ended, included in this prospectus, have
been audited by KMJ Corbin & Company LLP, an independent registered public accounting firm, as stated in their report
appearing herein, and elsewhere in the registration statement, and have been so included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND
MORE INFORMATION
We are required to comply
with the information and periodic reporting requirements of the Exchange Act, and, in accordance with the requirements of the Exchange
Act, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements
and other information will be available for inspection and copying at the regional offices, public reference facilities and internet
site of the SEC referred to below.
We filed with the SEC
a registration statement on Form S-1 under the Securities Act for the common stock and warrants to be sold in this offering. This
prospectus does not contain all of the information in the registration statement and the exhibits and schedules that were filed
with the registration statement. For further information with respect to the common stock, warrants and us, we refer you to the
registration statement and the exhibits and schedules that were filed with the registration statement. Statements made in this
prospectus regarding the contents of any contract, agreement or other document that is filed as an exhibit to the registration
statement are not necessarily complete, and we refer you to the full text of the contract or other document filed as an exhibit
to the registration statement.
80
A copy of the registration
statement and the exhibits and schedules that were filed with the registration statement may be inspected without charge at the
public reference facilities maintained by the SEC, 100 F Street, Washington, DC 20549. Copies of all or any part of the registration
statement may be obtained from the SEC upon payment of the prescribed fee. Information regarding the operation of the public reference
rooms may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information
statements and other information regarding registrants that file electronically with the SEC. The address of the site is
http://www.sec.gov
.
You can find more information
about us on our website, which is located at
http://www.cryoport.com
.
DISCLOSURE OF COMMISSION
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Under the Nevada Revised
Statutes and our Articles of Incorporation, as amended, our directors will have no personal liability to us or our stockholders
for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty of care." This
provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation
or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction
from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the
director's duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been
aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation or its stockholders,
(v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director's
duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption.
This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross
negligence.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
81
CRYOPORT, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2014 and 2013
Page
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Balance Sheets as of March 31, 2014 and 2013
F-3
Consolidated Statements of Operations for the years ended March 31, 2014 and 2013
F-4
Consolidated Statements of Stockholders' (Deficit) Equity for the years ended March 31, 2014 and 2013
F-5
Consolidated Statements of Cash Flows for the years ended March 31, 2014 and 2013
F-6
Notes to Consolidated Financial Statements
F-7
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
December 31, 2014 and 2013
(Unaudited)
Condensed Consolidated Balance Sheets at December 31, 2014 (Unaudited) and March 31, 2014
F-27
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2014 and 2013
F-28
Unaudited Condensed Consolidated Statements of Cash Flows for the three and nine months ended December 31, 2014 and 2013
F-29
Notes to Condensed Consolidated Financial Statements (Unaudited)
F-30
F-
1
Report of Independent Registered
Public Accounting Firm
The Board of Directors and
Stockholders of Cryoport,
Inc.
We have audited the accompanying
consolidated balance sheets of Cryoport, Inc. (the "Company") as of March 31, 2014 and 2013, and the related consolidated
statements of operations, stockholders' (deficit) equity and cash flows for each of the years in the two-year period ended
March 31, 2014. These consolidated financial statements are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits
in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cryoport,
Inc. at March 31, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the two-year period
ended March 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated
financial statements have been prepared assuming the Company will continue as a going concern. As described in Note 1 to the consolidated
financial statements, the Company has incurred recurring operating losses and has had negative cash flows from operations since
inception. Although the Company has cash and cash equivalents of $369,581 at March 31, 2014, management has estimated that cash
on hand, which include proceeds from convertible bridge notes received in the fourth quarter of fiscal 2014, will only be sufficient
to allow the Company to continue its operations into the second quarter of fiscal 2015. These matters raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described
in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ KMJ Corbin & Company
LLP
Costa Mesa, California
June 25, 2014
F-
2
Cryoport, Inc. and Subsidiary
Consolidated Balance Sheets
March 31,
2014
2013
ASSETS
Current Assets:
Cash and cash equivalents
$
369,581
$
563,104
Accounts receivable, net of allowance for doubtful accounts of $24,600 and $8,700, respectively
515,825
217,097
Inventories
29,703
39,212
Other current assets
196,505
138,892
Total current assets
1,111,614
958,305
Property and equipment, net
408,892
505,485
Intangible assets, net
180,086
272,263
Deposits and other assets
9,358
19,744
Total assets
$
1,709,950
$
1,755,797
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and other accrued expenses
$
579,678
$
858,709
Accrued compensation and related expenses
454,288
217,432
Convertible debentures payable and accrued interest, net of discount of $184,750 in 2014
1,622,359
1,304,419
Current portion of related party notes payable
1,358,120
96,000
Derivative liabilities
—
20,848
Total current liabilities
4,014,445
2,497,408
Related party notes payable and accrued interest, net of current portion
—
1,321,664
Total liabilities
4,014,445
3,819,072
Commitments and contingencies
Stockholders' (Deficit) Equity:
Preferred stock, $0.001 par value; 2,500,000 shares authorized; no shares  issued and outstanding
—
—
Common stock, $0.001 par value; 250,000,000 shares authorized; 59,979,954 and 37,760,628 issued and outstanding at March 31, 2014 and 2013, respectively
59,980
37,761
Additional paid-in capital
83,512,399
64,210,412
Accumulated deficit
(85,876,874
)
(66,311,448
)
Total stockholders' deficit
(2,304,495
)
(2,063,275
)
Total liabilities and stockholders' deficit
$
1,709,950
$
1,755,797
See accompanying notes to
consolidated financial statements.
F-
3
Cryoport, Inc. and Subsidiary
Consolidated Statements
of Operations
Years Ended March 31,
2014
2013
Revenues
$
2,659,943
$
1,100,539
Cost of revenues
2,222,988
1,587,823
Gross margin (loss)
436,955
(487,284
)
Operating costs and expenses:
Selling, general and administrative
5,106,219
5,411,728
Research and development
409,111
425,446
Total operating costs and expenses
5,515,330
5,837,174
Loss from operations
(5,078,375
)
(6,324,458
)
Other (expense) income:
Debt conversion expense
(13,713,767
)
—
Interest expense
(784,454
)
(72,861
)
Other expense, net
(8,078
)
—
Change in fair value of derivatives
20,848
16,486
Loss before provision for income taxes
(19,563,826
)
(6,380,833
)
Provision for income taxes
(1,600
)
(1,600
)
Net loss
$
(19,565,426
)
$
(6,382,433
)
Net loss per common share – basic and diluted
$
(0.40
)
$
(0.17
)
Weighted average shares outstanding – basic and diluted
48,850,513
37,760,628
See accompanying notes to
consolidated financial statements.
F-
4
Cryoport, Inc. and Subsidiary
Consolidated Statements
of Stockholders' (Deficit) Equity
Total
Preferred Stock
Common
    Stock
Additional
Accumulated
Stockholders'
Shares
Amount
Shares
Amount
Paid-In Capital
Deficit
(Deficit)
    Equity
Balance
    at March 31, 2012
—
$
—
37,760,628
$
37,761
$
63,620,774
$
(59,929,015
)
$
3,729,520
Net loss
—
—
—
—
—
(6,382,433
)
(6,382,433
)
Offering costs in connection
    with the February 2012 private placement offering
—
—
—
—
(103,542
)
—
(103,542
)
Stock-based
    compensation expense
—
—
—
—
693,180
—
693,180
Balance
    at March 31, 2013
—
—
37,760,628
37,761
64,210,412
(66,311,448
)
(2,063,275
)
Net loss
—
—
—
—
—
(19,565,426
)
(19,565,426
)
Stock-based compensation
    expense
—
—
—
—
678,119
—
678,119
Estimated relative fair
    value of warrants issued in connection with convertible bridge notes payable
—
—
—
—
478,229
—
478,229
Issuance of common stock
    upon exercise of options and warrants
—
—
1,583,315
1,583
325,307
—
326,890
Issuance of common stock
    and warrants upon conversion of convertible bridge notes and accrued interest
—
—
20,636,011
20,636
4,106,565
—
4,127,201
Induced
    debt conversion expense
—
—
—
—
13,713,767
—
13,713,767
Balance
    at March 31, 2014
—
$
—
59,979,954
$
59,980
$
83,512,399
$
(85,876,874
)
$
(2,304,495
)
See accompanying notes to
consolidated financial statements.
F-
5
Cryoport, Inc. and Subsidiary
Consolidated Statements
of Cash Flows
Years Ended March 31,
2014
2013
Cash Flows From Operating Activities:
Net loss
$
(19,565,426
)
$
(6,382,433
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
311,590
393,959
Amortization of debt discount and deferred financing costs
678,915
17,514
Stock-based compensation expense
678,119
693,180
Change in fair value of derivative instruments
(20,848
)
(16,486
)
Loss on write-off of intangible assets
—
17,046
Loss on disposal of cryogenic shippers
16,066
51,033
Reserve for bad debt
24,876
—
Debt conversion expense
13,713,767
—
Changes in operating assets and liabilities:
Accounts receivable, net
(323,604
)
(70,973
)
Inventories
9,509
12,542
Other assets
(26,588
)
34,912
Accounts payable and other accrued expenses
(221,929
)
443,568
Accrued compensation and related expenses
236,856
(18,564
)
Accrued interest
108,038
39,558
Net cash used in operating activities
(4,380,659
)
(4,785,144
)
Cash Flows From Investing Activities:
Purchases of intangible assets
—
(22,482
)
Purchases of property and equipment
(138,886
)
(156,200
)
Net cash used in investing activities
(138,886
)
(178,682
)
Cash Flows From Financing Activities:
Proceeds from exercise of stock options and warrants
326,890
—
Proceeds from issuance of convertible debt
4,558,301
1,294,500
Repayment of convertible debt
—
(82,800
)
Repayment of offering and deferred financing costs
(463,169
)
(206,305
)
Repayment of related party notes payable
(96,000
)
(96,000
)
Net cash provided by financing activities
4,326,022
909,395
Net decrease in cash and cash equivalents
(193,523
)
(4,054,431
)
Cash and cash equivalents — beginning of year
563,104
4,617,535
Cash and cash equivalents — end of year
$
369,581
$
563,104
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest
$
—
$
15,676
Cash paid for income taxes
$
1,600
$
1,600
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Offering costs in connection with equity financing included in accounts payable
$
—
$
53,747
Deferred financing costs in connection with convertible debt payable included in accounts payable
$
30,120
$
38,475
Release of restricted cash for repayment of convertible debentures
$
—
$
251,368
Estimated relative fair value of warrants issued in connection with convertible bridge notes payable
$
478,229
$
—
Conversion of bridge notes payable and accrued interest into common stock units
$
4,127,201
$
—
See accompanying notes to
consolidated financial statements.
F-
6
Cryoport, Inc. and Subsidiary
Notes to Consolidated Financial Statements
Note 1. Nature
of the Business
Cryoport Inc. (the "Company",
"Cryoport" or "we") is a Nevada corporation originally incorporated under the name G.T.5-Limited ("GT5")
on May 25, 1990. In connection with a Share Exchange Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired
all of the issued and outstanding shares of common stock of Cryoport Systems, Inc., a California corporation, in exchange for 2,410,811
shares of our common stock (which represented approximately 81% of the total issued and outstanding shares of common stock following
the close of the transaction). Cryoport Systems, Inc., which was originally formed in 1999 as a California limited liability company,
and subsequently reorganized into a California corporation on December 11, 2000, remains the operating company under Cryoport,
Inc. We became "publicly held" by the reverse merger with GT5 described above. Over time we have transitioned from
being a development company to a fully operational public company, providing cold chain logistics solutions to the biotechnology
and life sciences industries, globally.
Through a combination
of purpose-built proprietary packaging, information technologies and specialized logistics knowhow, we provide frozen shipping
logistics solutions to the life sciences industry. We view our solutions as disruptive to "older technologies" in that
our solutions provide reliable, economic alternatives to existing solutions and services utilized for frozen shipping in life sciences
including stem cells, cell lines, vaccines, diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious
substances and other items that require continuous exposure to frozen or cryogenic temperatures.
Our Cryoport Express
®
Solutions includes sophisticated cloud-based logistics management software we have branded as the Cryoportal™ which
supports the management of the entire shipment process through a single interface, including initial order input, document preparation,
customs clearance, courier management, shipment tracking, issue resolution, and delivery. The Cryoportal™ provides unique
and incisive information dashboards and validation documentation for every shipment. The Cryoportal™ records and retains
a fully documented "chain-of-custody" and, at the client's option, "chain-of-condition" for every
shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout the process.
This recorded and archived information allows our customers to meet exacting requirements necessary for scientific work and for
regulatory purposes.
Our Cryoport Express
®
Solutions also includes our liquid nitrogen dry vapor shippers we have branded as our Cryoport Express
®
Shippers,
which are cost-effective and reusable cryogenic transport containers (patented vacuum flasks) utilizing innovative liquid nitrogen
("LN2") "dry vapor" technology. Cryoport Express
®
Shippers are International Air Transport
Association ("IATA") certified, and validated to maintain stable temperatures of minus 150° C and below for a 10-plus
day dynamic shipment period. The Company currently features two Cryoport Express
®
Shipper models, the Standard Dry
Shipper (holding up to 75 2.0 ml vials) and the High Volume Dry Shipper (holding up to 500 2.0 ml vials).
Amongst our solutions,
we offer a "turnkey" solution, which can be accessed through our cloud-based Cryoportal™ or by contacting Cryoport
Client Care for order entry. Once the order is placed, we ship a fully charged Cryoport Express® Shipper to the customer
who
conveniently loads their frozen commodity into the inner chamber of the shipper.  The customer then closes the shipper and
reseals the shipping box displaying the recipient's address ("Flap A") for pre-arranged carrier pick up.
Cryoport arranges for the pick-up of the parcel by a shipping service provider for delivery to the customer's intended
recipient.  The recipient simply opens the box and shipper and removes the frozen commodity.  The recipient only needs
to reseal the box, displaying the nearest Cryoport Operations Center address ("Flap B") and set it out for pre-arranged
carrier pick up. The Cryoport Express
®
Shipper is returned to us for cleaning, quality assurance testing, recharging
and reuse.
In late 2012, we shifted
our focus from being a developer of cryogenic shippers and software to being a comprehensive frozen logistics solutions provider
to the life sciences industry, which was accomplished by broadening our service offerings. Now, in addition to our "Turn-key
Solution", we also provide the following value-added solutions that were developed to address our various clients'
needs:
·
"
Customer Staged Solution
,"
under which we supply an inventory of our Cryoport Express® Shippers to our customer, in an uncharged state, enabling our
customer (after training/certification) to charge them with liquid nitrogen and use our Cryoportal™ to enter orders with
shipping and delivery service providers for the transportation of the package. Once the order is released, our customer services
professionals monitor the shipment and the return of the shipper to us for cleaning, quality assurance testing and reuse.
F-
7
·
"
Customer Managed Solution
,"
a limited customer implemented, solution, whereby we supply our Cryoport Express® Shippers to clients in a fully charged state,
but leaving it to the client to manage the shipping, including the selection of the shipping and delivery service provider and
the return of the shipper to us. Under this solution, the customer accepts a significant level of the risk for a successful shipment.
·
"
powered by Cryoport
SM
"
is made available to providers of shipping and delivery services who seek to offer a "branded" cryogenic shipping
solution as part of their service offerings. By negotiation, this solution can be private labeled as long as "
powered
by Cryoport
SM
" appears prominently on the offering software interface and prominently on the packaging, which
is provided by the client after minimum volume requirements are met.
·
"
Integrated
Solution
" is our most comprehensive and complex outsourcing solution. It usually involves our management of the
entire cryogenic logistics process for our client, including the location of our employees at the client's site to manage
the client's cryogenic logistics, in total.
·
"
Life Science
Point-of-Care Repository Solution
" whereby we supply our Cryoport Express
®
Shippers to ship and store
cryogenically preserved life science products for up to 6 days (or longer periods with substitute Shippers) at a point-of-care
site, with the Cryoport Express
®
Shippers serving as a temporary freezer/repository enabling the efficient distribution
of temperature sensitive allogeneic cell-based therapies without the expense, inconvenience, and potential costly failure of an
on-sight, cryopreservation apparatus. Our customer services professionals monitor each shipment throughout the predetermined process
including the shipment's return to Cryoport where the Cryoport Express
®
Shipper is cleaned, tested for quality
assurance and then returned to inventory for reuse.
·
"
Personalized
Medicine and Cell-based Immunotherapy Solution
" whereby our Cryoport Express
®
Solutions serves as
an enabling technology for the safe manufacture of the rapidly expanding autologous cellular-based immunotherapy market by providing
a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the collection of the patient's
cells in a hospital setting, to (b) a central processing facility where they are manufactured into a personalized medicine, to
(c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care treatment facility.  The Cryoport
Express
®
Shippers can then serve as a temporary freezer/repository to allow the efficient distribution of this
personalized medicine to patients when and where they need it most without the expense, inconvenience, and potential costly failure
of an on-sight, cryopreservation apparatus. Our customer services professionals monitor each shipment throughout the predetermined
process including the shipment's return to Cryoport where the Cryoport Express
®
Shipper is cleaned, tested
for quality assurance and then returned to inventory for reuse.
One of our distribution
partners is Federal Express Corporation ("FedEx"). We have an agreement with FedEx to provide frozen shipping logistics
services through the combination of our purpose-built proprietary technologies and turnkey management processes. FedEx markets
and sells Cryoport's services for frozen temperature-controlled cold chain transportation as its FedEx
®
Deep
Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year 2013, the Company worked closely
with FedEx to further align its sales efforts and accelerate penetration within FedEx's life sciences customer base through
improved processes, sales incentives, joint customer calls and more frequent communication at the sales and executive level. In
addition, FedEx has developed a FedEx branded version of the Cryoportal
TM
software platform, which is "
powered
by Cryoport
" for use by FedEx and its customers giving them access to the full capabilities of our logistics management
platform.
In January 2013, we entered
into a master agreement ("FedEx Agreement") with FedEx renewing these services and providing FedEx with a non-exclusive
license and right to use a customized version of our Cryoportal
TM
for the management of shipments made by FedEx customers.
The FedEx Agreement became effective on January 1, 2013 and, unless sooner terminated as provided in the FedEx Agreement, expires
on December 31, 2015.
In June 2014, we added
DHL as our second distribution partner by entering into an agreement with LifeConEx, a part of DHL Global Forwarding ("DHL"),
whereby DHL can offer our validated and comprehensive cryogenic solutions to its life sciences and healthcare customers on a global
basis. This relationship with DHL is a further implementation of the Company's expansion of distribution partnerships under
the "
powered by Cryoport
SM
" model described above, allowing us to expand our sales and marketing
reach through our partners and build awareness of the benefits our validated cryogenic solution offerings. DHL has announced that
it will add 15 more certified Life Sciences stations in the second quarter of 2014 to its existing Thermonet network of 45 stations
already in operation. This expanded network will now be able to offer Cryoport's cryogenic solutions under the DHL brands.
 In addition, DHL's customer will continue to be able to have direct access to our cloud-based order entry and tracking
portal to order Cryoport Express
®
solutions and receive preferred DHL shipping rates and discounts. Our proprietary
logistics management platform, the Cryoportal
TM
, is integrated to DHL's tracking and billing systems to provide
DHL life sciences and healthcare customers with a seamless way of shipping their critical biological material worldwide.
F-
8
In December 2012,
we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of Pfizer Inc.) pursuant
to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, the Company is providing
on-site logistics personnel and its logistics management platform, the Cryoportal
TM
, to manage shipments from the Zoetis
manufacturing site in the United States to domestic customers as well as various international distribution centers. As part of
our logistics management services, Cryoport is constantly analyzing shipping data and processes to further streamline Zoetis'
logistics, ensuring products arrive at their destinations in specified conditions, on-time and with the optimum uses of resources.
The Company manages Zoetis' total fleet of dewar flask shippers used for this purpose, including liquid nitrogen shippers.
In July 2013 the agreement was amended to expand Cryoport's scope to manage all logistics of Zoetis' key frozen poultry
vaccine to all Zoetis' international distribution centers as well as all domestic shipments of this vaccine. In October 2013,
the agreement was further amended to further expand Cryoport's services to include the logistics management for a second
poultry vaccine.
In February 2014, we entered
into a services agreement with Liventa Bioscience, Inc. ("Liventa"), a privately-held, commercial stage biotechnology
company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement, Liventa will be using Cryoport
Express
®
Solutions for the logistics of its cell-based therapies requiring cryogenic temperatures and also provide
Cryoport Express
®
Solutions to other biologics suppliers within the orthopedic arena. The agreement combines Cryoport's
proprietary, purpose-built cold chain logistics solutions for cell-based and advanced biologic tissue forms with Liventa's
distribution capability to orthopedic care providers. The implementation of Cryoport's solution will eliminate dry ice shipping
and related risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based
orthopedic therapies. This will enable Liventa to better serve small or mobile clinics, pharmacies, family practice, and orthopedic
specialty care providers. Surgical centers and hospitals will also benefit from better logistics and the elimination of issues
surrounding dry ice transport and storage. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms. Liventa also agreed to certain performance criteria and the issuance of 150,000 shares of its common stock to Cryoport in
exchange for the exclusive right to offer, market and promote Cryoport Express
®
Solutions for cellular-based therapies
requiring cryogenic temperatures for use in orthopedic indications in the United States.
We offer our solutions
to companies in the life sciences industry and specific verticals including manufacturers of stem cells and cell lines, diagnostic
laboratories, bio-pharmaceuticals, contract research organizations, in-vitro fertilization, cord blood, vaccines, tissue, animal
husbandry, and other producers of commodities requiring reliable frozen solutions for logistics problems. These companies operate
within heavily regulated environments and as such, changing vendors and distribution practices typically require a number of steps
which may include the audit of our facilities, review of our procedures, qualifying us as a vendor, and performing test shipments.
This process can take up to nine months or longer to complete prior to a potential customer adopting one or more of our Cryoport
Express
®
Solutions.
Going Concern
The consolidated financial
statements have been prepared using the accrual method of accounting in accordance with accounting principles generally accepted
in the United States of America ("U.S. GAAP") and have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities in the normal course of business. We have sustained operating losses since
our inception and have used substantial amounts of working capital in our operations. Further, at March 31, 2014, we had an accumulated
deficit of $85.9 million. During the year ended March 31, 2014, we used cash in operations of $4.4 million and had a net loss
of $19.6 million, which included a one-time, non-cash debt conversion expense of $13.7 million.
We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express
®
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at March 31, 2014, additional funds raised subsequent to March 31, 2014 through the current
preferred stock offering (see Note 15), together with the revenues generated from our services will be sufficient to sustain our
planned operations into the second quarter of fiscal year 2015; however, we must obtain additional capital to fund operations thereafter
and for the achievement of sustained profitable operations. These factors raise substantial doubt about our ability to continue
as a going concern. We are currently working on funding alternatives in order to secure sufficient operating capital to allow us
to continue to operate as a going concern.
Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express
®
Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis and on acceptable terms or at all. Management's inability to successfully achieve significant
revenue increases or implement cost reduction strategies or to complete any other financing will adversely impact our ability to
continue as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts
to become a self-sustaining financially viable entity.
F-
9
Note 2. Summary
of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated
financial statements have been prepared in accordance with U.S. GAAP.
Principles
of Consolidation
The consolidated financial
statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany accounts
and transactions have been eliminated.
Use of Estimates
The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts. The Company's
significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance for inventory obsolescence,
deferred taxes and their accompanying valuations, valuation of derivative liabilities and valuation of common stock, warrants and
stock options issued for products or services.
Fair Value
of Financial Instruments
The Company's financial
instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible notes payable,
accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value at March 31, 2014
and 2013 due to their short-term nature. The difference between the fair value and recorded values of the related party notes payable
is not significant.
Cash and Cash
Equivalents
The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.
Concentrations
of Credit Risk
The Company maintains
its cash accounts in financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation
("FDIC") with basic deposit insurance coverage limits up to $250,000 per owner. At March 31, 2014 and 2013, the
Company had cash balances of approximately $159,000 and $214,000, respectively, which exceeded the FDIC insurance limit. The Company
performs ongoing evaluations of these institutions to limit its concentration risk exposure.
Customers
The Company grants credit
to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues from
international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company's ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at March 31, 2014 and 2013 are net of reserves for doubtful accounts of $24,600 and $8,700,
respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated amounts.
The majority of the Company's
customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration of accounts
receivable within these industries, which is subject to normal credit risk. At March 31, 2014, there was one customer that accounted
for 30.6% of net accounts receivable. No other single customer owed us more than 10% of net accounts receivable at March 31, 2014
and 2013. The Company maintains reserves for bad debt and such losses, in the aggregate, historically have not exceeded our estimates.
F-
10
The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During fiscal years 2014 and 2013, the Company
had revenues from foreign customers of approximately $434,000 and $161,000, respectively, which constituted approximately 16.3%
and 14.6% of total revenues, respectively. For the fiscal year ended March 31, 2014, there was one customer that accounted
for 30.8% of net revenues. No other single customer generated over 10% of net revenues during 2014 and 2013.
Inventories
The Company's inventories
consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned to the Company
with the containers at the culmination of the customer's shipping cycle. Inventories are stated at the lower of cost or current
estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire method.
Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of its inventories
to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs of inventories
are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and finished goods
include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level of inventories
considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories at its
net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic conditions,
customer demand, competition or other relevant factors differ from expectations. These estimates require us to make assessments
about future demand for the Company's products in order to categorize the status of such inventories items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company's forecasts of market conditions,
industry trends, competition and other factors.
Property and
Equipment
The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements are similar
to the accounting standard for leases since they convey the right to use the container over a period of time. The Company retains
the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer's shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.
Property and equipment
are recorded at cost. Cryogenic shippers, which comprise of 89% and 87% of the Company's net property and equipment balance
at March 31, 2014 and 2013, respectively, are depreciated using the straight-line method over their estimated useful lives
of three years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally
three to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of
the asset or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful
life of the assets or term of the lease, whichever is shorter and included in depreciation expense.
Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.
Intangible
Assets
Intangible assets are
comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and trademarks,
which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes certain
costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.
Long-lived
Assets
If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets' carrying value, and accordingly, we have not recognized any impairment losses through March 31, 2014.
F-
11
Deferred Financing
Costs
Deferred financing costs
represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred
financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.
In connection with the
5% Bridge Notes, during the third and fourth quarter of fiscal 2014, the Company incurred financing costs that have been capitalized
and are being amortized over the term of the convertible bridge notes payable using the straight-line method which approximates
the effective interest method (see Note 8).
During the year ended
March 31, 2013, the Company incurred $103,542 of offering costs in connection with the private placement that closed in February
and March 2012, which were charged to additional paid-in capital and netted against the proceeds received in the private placements.
As of March 31, 2013, offering costs of $53,747 related to the private placement were included in accounts payable and accrued
expenses in the accompanying consolidated balance sheet.
Convertible
Debentures
If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature ("BCF"). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.
Derivative
Liabilities
Certain of the Company's
issued and outstanding common stock purchase warrants which have exercise price reset features are treated as derivatives for accounting
purposes. The common stock purchase warrants were not issued with the intent of effectively hedging any future cash flow, fair
value of any asset, liability or any net investment in a foreign operation. The warrants do not qualify for hedge accounting, and
as such, all future changes in the fair value of these warrants are recognized currently in earnings until such time as the warrants
are exercised, expire or the related rights have been waived. These common stock purchase warrants do not trade in an active securities
market, and as such, the Company estimates the fair value of these warrants using the Black-Scholes option pricing model ("Black-Scholes")
(see Note 9).
Income Taxes
The Company accounts for
income taxes under the provision of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 740,
Income Taxes
, or ASC 740. As of March 31, 2014 and 2013, there were no unrecognized tax benefits
included in the accompanying consolidated balance sheets that would, if recognized, affect the effective tax rates.
Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred tax assets if
it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight of available
evidence, the Company's management has determined that it is more likely than not that the net deferred tax assets will not
be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets. The Company's
income tax provision consists of state minimum taxes.
The Company's policy
is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest
or penalties on its consolidated balance sheets at March 31, 2014 and 2013, respectively and has not recognized interest and/or
penalties in the consolidated statement of operations for the years ended March 31, 2014 and 2013. The Company is subject
to taxation in the U.S. and various state jurisdictions. As of March 31, 2014, the Company is no longer subject to U.S. federal
examinations for years before 2010 and for California franchise and income tax examinations for years before 2009. However, to
the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses were generated
and carried forward, and make adjustments up to the amount of the net operating loss carry forward amount. The Company is not currently
under examination by U.S. federal or state jurisdictions.
F-
12
Revenue Recognition
The Company provides shipping
containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements are similar
to the accounting standard for leases since they convey the right to use the containers over a period of time. The Company retains
title to the containers and provides its customers the use of the container for a specified shipping cycle. At the culmination
of the customer's shipping cycle, the container is returned to the Company.
The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the enclosed materials, and at
the time that collectability is reasonably certain. Revenue is based on gross net of discounts and allowances.
The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel. Revenue is recognized for these
services as services are rendered and at the time that collectability is reasonably certain.
Accounting
for Shipping and Handling Revenue, Fees and Costs
The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying consolidated statements of operations.
Research and
Development Expenses
Expenditures relating
to research and development are expensed in the period incurred.
Stock-based
Compensation
The Company accounts for
stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all stock-based
payments to employees and directors, including grants of employee stock options and warrants, to be recognized based upon their
fair values. The fair value of stock-based awards is estimated at grant date using Black-Scholes and the portion that is ultimately
expected to vest is recognized as compensation cost over the requisite service period.
Since stock-based compensation
is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture rate
to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future periods
if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in which the
change in estimate occurs. The estimated forfeiture rates at March 31, 2014 and 2013 was zero as the Company has not had a
significant history of forfeitures and does not expect significant forfeitures in the future.
Cash flows from the tax
benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company's loss position, there were no such tax benefits during years ended March 31,
2014 and 2013.
The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company's
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.
The Company's stock-based
compensation plans are discussed further in Note 12.
F-
13
Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services
Issuances of the Company's
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn
the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.
Basic and Diluted Net
Income (Loss) Per Share
We calculate basic and
diluted net income (loss) per share using the weighted average number of common shares outstanding during the periods presented,
and adjust the amount of net income (loss) used in this calculation for preferred stock dividends (if any) declared during the
period. In periods of a net loss position, basic and diluted weighted average shares are the same. For the diluted earnings per
share calculation, we adjust the weighted average number of common shares outstanding to include dilutive stock options, warrants
and other common stock equivalents outstanding during the periods.
The following shows the
amounts used in computing net loss per share for each of the two years in the period ended March 31, 2014:
Years Ended March 31,
2014
2013
Net loss
$
(19,565,426
)
$
(6,382,433
)
Less:
Preferred dividends paid in cash or stock
—
—
Loss attributable to Cryoport stockholders
$
(19,565,426
)
$
(6,382,433
)
Weighted average shares issued and outstanding
48,850,513
37,760,628
Basic and diluted net loss per share
$
(0.40
)
$
(0.17
)
The following table sets
forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been anti-dilutive:
Years Ended March 31,
2014
2013
Stock options
3,458,313
411,762
Warrants
3,221,728
—
6,680,041
411,762
Segment Reporting
We currently operate in
one reportable segment.
Fair Value
Measurements
We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:
Level 1:
Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level 1 inputs.
Level 2:
Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.
Level 3:
Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3
inputs.
F-
14
In determining fair value,
we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent
possible, as well as consider counterparty credit risk in the assessment of fair value.
We did not elect the fair
value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value. Therefore,
material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and payable, are
reported at their historical carrying values.
The carrying values of
our assets and liabilities that are required to be measured at fair value on a recurring basis as of March 31, 2014 and 2013 are
classified in the table below in one of the three categories of the fair value hierarchy described below:
Fair Value Measurements
Level 1
Level 2
Level 3
Total
March 31, 2013
Liabilities:
Derivative liabilities
$
—
$
—
$
20,848
$
20,848
The following summarizes
the activity of Level 3 inputs measured on a recurring basis for the years ended March 31, 2014 and 2013:
Fair Value Measurements of
Unobservable Inputs (Level 3)
Balance at March 31, 2012
$
37,334
Transfers in / (out) of Level 3
—
Adjustments resulting from a change in fair value of derivative liabilities
(16,486
)
Balance at March 31, 2013
20,848
Transfers in / (out) of Level 3
—
Adjustments resulting from a change in fair value of derivative liabilities
(20,848
)
Balance at March 31, 2014
$
—
The fair value of derivative
liabilities were measured on their respective origination dates and at the end of each reporting period using Level 3 inputs.
The significant assumptions we use in the calculations under Black-Scholes as of March 31, 2014 and 2013 included an expected term
based on the remaining contractual life of the warrants, a risk-free interest rate based upon observed interest rates appropriate
for the expected term of the instruments, volatility based on the historical volatility of our common stock, and a zero dividend
rate based on our past, current and expected practices of granting dividends on common stock.
Foreign Currency Translation
We record foreign currency
transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included in results
of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.
Recent Accounting Pronouncements
In July 2013, the FASB
issued ASU No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax
Loss, or a Tax Credit Carryforward Exists." ASU 2013-11 provides explicit guidance on the financial statement presentation
of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.
The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15,
2013, with an option for early adoption. This pronouncement is effective for reporting periods beginning on or after January 1,
2013. The adoption of ASU 2011-11 did not have a material impact on the Company's consolidated financial statements.
In May 2014, the FASB
issued ASU No. 2014-09, "Revenue from Contracts with Customers". ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, "Revenue Recognition". The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our consolidated financial statements.
F-
15
Note 3. Inventories
Inventories consist
of the following:
March 31,
2014
2013
Raw materials
$
18,283
$
28,533
Finished goods
11,420
10,679
$
29,703
$
39,212
Note 4. Property
and Equipment
Property and equipment
consist of the following:
March  31,
2014
2013
Cryogenic shippers
$
1,037,286
$
962,565
Furniture and fixtures
30,746
30,746
Machinery and equipment
386,731
380,526
Leasehold improvements
30,913
30,913
1,485,676
1,404,750
Less accumulated depreciation and amortization
(1,076,784
)
(899,265
)
$
408,892
$
505,485
Total depreciation
and amortization expense related to property and equipment amounted to $219,400 and $281,700 for the years ended March 31,
2014 and 2013, respectively.
Note 5. Intangible
Assets
Intangible assets
consist of the following:
March 31, 2014
Gross
Amount
Accumulated
Amortization
Net
Amount
Weighted
Average
Amortization
Period (years)
Patents and trademarks
$
154,214
$
(55,712
)
$
98,502
4.9
Software development costs for internal use
547,127
(465,543
)
81,584
1.6
Total intangible assets
$
701,341
$
(521,255
)
$
180,086
March 31, 2013
Gross
Amount
Accumulated
Amortization
Net
Amount
Weighted
Average
Amortization
Period (years)
Patents and trademarks
$
154,214
$
(54,251
)
$
99,963
5.9
Software development costs for internal use
547,127
(374,827
)
172,300
2.6
Total intangible assets
$
701,341
$
(429,078
)
$
272,263
Amortization expense
for intangible assets for the years ended March 31, 2014 and 2013 was $92,200 and $112,300, respectively.
F-
16
Future amortization
of intangible assets is as follows:
Years Ending March 31,
2015
$
62,884
2016
49,770
2017
28,199
2018
19,617
2019
19,616
$
180,086
Note 6. Accrued
Compensation and Related Expenses
Accrued compensation
and related expenses consist of the following:
March 31,
2014
2013
Accrued salary and wages
$
80,328
$
85,554
Accrued paid time off
155,166
92,376
Accrued board of director fees
214,553
38,000
Other accrued obligations
4,241
1,502
$
454,288
$
217,432
Note 7. Related
Party Transactions
Related
Party Notes Payable
As of March 31,
2014 and 2013, the Company had aggregate principal balances of $555,500 and $651,500, respectively, in outstanding unsecured indebtedness
owed to four related parties, including former members of the Company's board of directors, representing working capital
advances made to the Company from February 2001 through March 2005. These notes bear interest at the rate of 6% per annum
and provide for aggregate monthly principal payments which began April 1, 2006 of $2,500, and which increased by an aggregate
of $2,500 every nine months to a maximum of $10,000 per month. As of March 31, 2014, the aggregate principal payments totaled $8,000
per month. Any remaining unpaid principal and accrued interest is due at maturity on various dates through March 1, 2015.
Related-party interest
expense under these notes was $36,500 and $42,200 for the years ended March 31, 2014 and 2013, respectively. Accrued interest,
which is included in related party notes payable in the accompanying consolidated balance sheets, amounted to $802,600 and $766,200
as of March 31, 2014 and 2013, respectively.
Convertible
Bridge Notes
During the year ended
March 31, 2014, the Company issued to certain accredited investors various unsecured promissory notes with the terms as described
under Note 8. These unsecured promissory notes included $120,000 of the 5% Bridge Notes (as defined below) issued to Jerrell Shelton,
the Company's Chief Executive Officer, $100,000 of the Bridge Notes (as defined below) issued to Richard Rathmann, a member
of the Board of Directors of the Company, $200,000 of the Bridge Notes and $100,000 of the 5% Bridge Notes issued to GBR Investments,
LLC, of which Richard Rathmann is the manager.
Note 8. Convertible
Notes Payable
2013 and
2014 Bridge Notes
In the fourth quarter
of fiscal 2013 and first nine months of fiscal 2014, the Company issued to certain accredited investors unsecured convertible promissory
notes (the "Bridge Notes") in the original principal amount of $1,294,500 and $2,765,301, respectively, for total principal
of $4,059,801, pursuant to the terms of subscription agreements and letters of investment intent.
The Bridge Notes accrued
interest at a rate of 15% per annum from date of issuance until January 31, 2013 and at a rate of 5% per annum from
February 1, 2013 through the date of payment, in each case on a non-compounding basis. All principal and interest under the
Bridge Notes were due on December 31, 2013. Accrued interest related to these notes amounted to $0 and $9,900, as of March
31, 2014 and 2013, respectively.
F-
17
In connection with
the issuance of the Bridge Notes to three accredited investors totaling $400,000 in June, July and August 2013, the Company granted
these investors warrants to purchase 1,797,457 shares of common stock at an exercise prices ranging from $0.19 to $0.29 per share.
The relative fair value of the warrants of $199,200 was recorded as a debt discount and was amortized to interest expense using
the straight-line method which approximated the effective interest method over the term of the Bridge Notes. These Bridge Notes
accrued interest at 8% per annum from the date of issuance through date of payment, on a non-compounding basis. All other terms
of these Bridge Notes are consistent with the rest of the Bridge Notes. Upon conversion of the Bridge Notes in September and October
2013, the remaining unamortized debt discount was amortized to interest expense.
In September and October
2013, the Bridge Note holders accepted an offer by the Company and converted an aggregate of $4,127,202 of outstanding principal
and accrued interest under the Bridge Notes into 20,636,011 units (the "Units") at a price of $0.20 per Unit, with
each Unit consisting of (i) one share of common stock of the Company ("Common Stock") and (ii) one warrant to
purchase one share of Common Stock at an exercise price of $0.37 per share. The warrants are exercisable beginning on March
31, 2014 and have a term of five years from date of issuance. As the transaction was considered an induced conversion under the
applicable accounting guidance, the Company recognized $13,713,767 in debt conversion expense representing the fair value of the
securities transferred in excess of the fair value of the securities issuable upon the original conversion terms of the Bridge
Notes. The Company calculated the fair value of the common stock issued by using the closing price of the stock on the date of
issuance. The fair value of the warrants was calculated using Black-Scholes.
Upon conversion of
the Bridge Notes, the remaining unamortized debt discount was amortized to interest expense. During the years ended March 31, 2014
and 2013, the Company amortized $199,200 and $0, respectively, to interest expense.
5% Bridge
Notes
From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes (the "5% Bridge
Notes") in the original principal amount of $1,793,000, pursuant to the terms of subscription agreements and letters of investment
intent. This includes two notes in the aggregate amount of $120,000 issued to Jerrell Shelton, the Company's Chief Executive
Officer, on December 11, 2013 and January 10, 2014 as well as a note in the amount of $100,000 issued to GBR Investments, LLC on
February 3, 2014, of which Richard Rathmann, a Director of the Company, is the manager.
The 5% Bridge Notes
accrue interest at a rate of 5% per annum from the date of issuance through date of payment, on a non-compounding basis. All
principal and interest under the 5% Bridge Notes becomes due on June 30, 2014. Accrued interest related to these notes of $14,100
is included in convertible debentures payable and accrued interest, net of discount in the accompanying consolidated balance sheet
at March 31, 2014.
In connection with
the issuance of the 5% Bridge Notes, the Company granted these investors warrants to purchase 896,500 shares of common stock at
an exercise price of $0.49 per share. The warrants are exercisable on May 31, 2014 and expire on December 31, 2018. The relative
fair value of the warrants of $279,100 was recorded as a debt discount and is amortized to interest expense using the straight-line
method which approximates the effective interest method over the term of the 5% Bridge Notes.  During the year ended March
31, 2014, the Company amortized $94,300 of the debt discount to interest expense for these notes.
In the event the Company
designates and issues one or more types of equity securities while the 5% Bridge Notes are outstanding ("Subsequent Offering"),
the Company must provide written notice to the holders of the notes and such holders will have a right to convert up to all of
the principal and accrued unpaid interest on the notes into shares of such equity securities on the same terms as the Subsequent
Offering during the ten days following the provision of such notice. The conversion price for these equity securities will be 90%
of the offering price for the equity securities. The Company was unable to value the conversion feature of these 5% Bridge Notes
given the absence of a conversion rate and the convertibility of the 5% Bridge Notes being contingent upon the completion of a
Subsequent Offering. In May 2014, note holders with the principal amount of $1,743,000 converted their notes (see Note 15).
Emergent Financial
Group, Inc. ("Emergent") served as the Company's placement agent in connection with the original placement of
the Bridge Notes and 5% Bridge Notes and earned a commission of 9% of the original principal balance of such notes. Debt financing
costs of $375,900 and $116,500 in 2014 and 2013, respectively, comprised primarily of the commission earned by Emergent, of which
$98,400 and $107,800 is recorded in other current assets in the accompanying consolidated balance sheets as of March 31, 2014 and
2013, respectively, and are being amortized to interest expense using the straight-line method which approximates the effective
interest method over the term of the notes.
F-
18
In connection with
the conversion of the Bridge Notes in September and October 2013, Emergent received warrants to purchase 1,911,259 shares of common
stock at an exercise price of $0.20 per share. The warrants were exercisable beginning March 31, 2014 and have an expiration date
of June 30, 2018. Emergent did not receive any compensation with respect to the 5% Bridge Note in the principal amount of $120,000
issued to Jerrell Shelton, the Chief Executive Officer of the Company and $100,000 issued to GBR Investments, LLC , of which Richard
Rathmann, a Director of the Company, is the manager. During the years ended March 31, 2014 and 2013, the Company amortized $385,400
and $8,700, respectively, to interest expense.
Note 9. Derivative
Liabilities
In accordance with
applicable accounting guidance, certain of the Company's outstanding warrants to purchase shares of common stock were treated
as derivatives because these instruments had reset or ratchet provisions in the event the Company raises additional capital at
a lower price, among other adjustments. As such, the fair value of these common stock purchase warrants were treated as derivative
liabilities since their date of issuance or modification. Changes in fair value were recorded as non-operating, non-cash income
or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company
will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date,
the Company will record non-operating, non-cash income. As of March 31, 2014 and 2013, the Company had derivative warrant liabilities
with fair values of $0 and $20,848, respectively. The derivative warrants expire in April 2014.
During the year ended
March 31, 2014 and 2013, the Company recognized aggregate gains of $20,848 and $16,486, respectively, due to the change in fair
value of its derivative instruments.
The Company's
common stock purchase warrants do not trade in an active securities market, and as such, the Company estimated the fair value of
these warrants using Black-Scholes using the following assumptions:
March 31,
2014
2013
Expected life (years)
0.01 to 0.81
1.01 to 1.81
Risk-free interest rate
0.03% - 0.15%
0.14%-0.33%
Volatility
70% - 144%
129% - 158%
Dividend yield
—
—
Historical volatility
was computed using daily pricing observations for recent periods that correspond to the remaining term of the warrants, which had
an original term of five years from the date of issuance. The expected life is based on the remaining term of the warrants. The
risk-free interest rate is based on U.S. Treasury securities with a maturity corresponding to the remaining term of the warrants.
Note 10. Commitments
and Contingencies
Facility
and Equipment Leases
We lease 11,900 square
feet of corporate, research and development, and warehouse facilities in Lake Forest, California under an operating lease expiring
June 30, 2015 which includes the right to cancel the lease with a minimum of 120 day written notice at any time after December 31,
2012. We also lease corporate facilities in San Diego, California under a non-cancelable operating lease expiring December 31,
2014. Each lease agreement contains certain scheduled rent increases which are accounted for on a straight-line basis.
Future minimum lease
payments are as follows:
Years ending March 31,
Operating
Leases
2015
$
192,800
2016
26,700
$
219,500
F-
19
Rent expense for the
years ended March 31, 2014 and 2013 was approximately $178,000 and $204,000, respectively.
Employment
Agreements
We have entered into
employment agreements with certain of our officers under which payment and benefits would become payable in the event of termination
by us for any reason other than cause, or upon a change in control of our Company, or by the employee for good reason.
Consulting
and Engineering Services
Effective November 1,
2010, the Company entered into a Second Amendment to Master Consulting and Engineering Services Agreement (the "Second Amendment")
with KLATU Networks, LLC ("KLATU"), which amended the Master Consulting and Engineering Services Agreement between
the parties dated as of October 9, 2007 (the "Agreement"), as amended by the First Amendment to Master Consulting
and Engineering Services Agreement between the parties dated as of April 23, 2009. The parties entered into the Second Amendment
to clarify their mutual intent and understanding that all license rights granted to the Company under the Agreement, as amended,
shall survive any termination or expiration of the Agreement. In addition, in recognition that the Company has paid KLATU less
than the market rate for comparable services, the Second Amendment provides that if the Company terminates the Agreement without
cause, which the Company has no intention of doing, or liquidates, KLATU shall be entitled to receive additional consideration
for its services provided from the commencement of the Agreement through such date of termination, which additional compensation
shall not be less than $2 million plus two times the "cost of work" (as defined in the Agreement). Any such additional
compensation would be payable in three equal installments within 12 months following the date the amount of such additional compensation
is determined. If KLATU terminates that agreement, no such payments are payable.
The agreement provides
for one year terms ending on December 31 of each year, but it automatically renews for one year periods unless otherwise terminated.
Consulting fees for services provided by KLATU were $395,300 and $401,100 for the years ended March 31, 2014 and 2013, respectively.
Litigation
The Company may become
a party to product litigation in the normal course of business. The Company accrues for open claims based on its historical experience
and available insurance coverage. In the opinion of management, there are no legal matters involving the Company that would have
a material adverse effect upon the Company's consolidated financial condition or results of operations.
Indemnities
and Guarantees
The Company has made
certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation
to certain actions or transactions. The guarantees and indemnities do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for
these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated
balance sheets.
The Company indemnifies
its directors, officers, employees and agents, as permitted under the laws of the States of California and Nevada. In connection
with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. The
duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement.
Note 11. Stockholders'
Equity
Authorized
Stock
The Company has 250,000,000
authorized shares of common stock with a par value of $0.001 per share. In September 2011, our stockholders approved an amendment
to the Amended and Restated Articles of Incorporation to authorize a class of undesignated or "blank check" preferred
stock, consisting of 2,500,000 shares at $0.001 par value per share. Shares of preferred stock may be issued in one or more series,
with such rights, preferences, privileges and restrictions to be fixed by the Company's board of directors. In May 2014,
our stockholders approved a Certificate of Designation, which designated 800,000 shares of preferred stock as Class A Preferred
Stock (See Note 15).
F-
20
Common
Stock Reserved for Future Issuance
As of March 31, 2014,
approximately 73.1 million shares of common stock were issuable upon conversion or exercise of rights granted under prior
financing arrangements, stock options and warrants, as follows:
Exercise of stock options
11,894,205
Exercise of warrants
61,194,343
Total shares of common stock reserved for future issuances
73,088,548
Note 12. Stock-Based
Compensation
Warrant
Activity
We typically issue
warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services
rendered by placement agents and consultants. Included in outstanding warrants are 262,856 and 312,856 warrants at March 31, 2014
and 2013, respectively issued to employees or directors. Our outstanding warrants expire on varying dates through July 2019. A
summary of warrant activity is as follows:
Number of
Shares
Weighted-
Average
Exercise
Price/Share
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (1)
Outstanding — March 31, 2012
37,144,504
$
1.18
Issued
30,000
0.50
Exercised
—
—
Forfeited
(123,376
)
0.77
Expired
(23,929
)
8.89
Outstanding — March 31, 2013
37,027,199
1.18
Issued
25,241,227
0.35
Exercised
(926,315
)
0.22
Forfeited
(39,728
)
8.49
Expired
(108,040
)
7.96
Outstanding — March 31, 2014
61,194,343
$
0.84
2.9
$
3,987,500
Vested (exercisable) — March 31, 2014
60,297,010
$
0.84
2.9
$
3,960,600
(1)
Aggregate intrinsic value represents the difference between the exercise price of the warrant and the closing market price of the common stock on March 31, 2014, which was $0.52 per share.
The following table
summarizes information with respect to warrants outstanding and exercisable at March 31, 2014:
Exercise Price
Number
Outstanding
Weighted-
Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise Price
Number
Exercisable
Weighted-
Average
Exercise Price
$0.19 – 0.20
2,437,574
4.3
$
0.20
2,437,574
$
0.20
$0.21 – 0.37
20,980,838
4.5
$
0.37
20,980,838
$
0.37
$0.38 – 0.69
10,932,429
3.0
$
0.67
10,035,929
$
0.69
$0.70 – 0.92
21,431,557
1.7
$
0.77
21,431,557
$
0.77
$0.93 – 10.80
5,411,945
0.9
$
3.53
5,411,112
$
3.53
61,194,343
60,297,010
F-
21
Stock
Options
We have three stock
incentive plans: the 2002 Stock Incentive Plan, or the 2002 Plan, the 2009 Stock Incentive Plan, or the 2009 Plan and the 2011
Stock Incentive Plan, or the 2011 Plan (collectively, the "Plans"). The 2002 Plan authorizes the grant of incentive
awards, including stock options, for the purchase of up to a total of 500,000 shares and has no shares available for future
issuances as the 2002 Plan has expired. Subsequent to the adoption of the 2011 Plan, no new options have been granted pursuant
the 2009 Plan or 2002 Plan. In September 2009, the stockholders approved the issuance of up to 1,200,000 shares of common
stock available for issuance under the 2009 Plan and as of March 31, 2014, the Company has 299,741 shares available for future
awards under the 2009 Plan. In September 2011, the stockholders authorized the issuance of up to 2,300,000 shares of the Company's
common stock. On September 13, 2012, the stockholders approved an increase to the number of shares of the Company's
common stock available for issuance by 3,000,000 shares. On September 6, 2013 the stockholders approved an increase to the
number of shares of the Company's common stock available for issuance by 7,100,000 shares. As of March 31, 2014, there were
7,405,004 incentive awards available for grant under the 2011 Plan.
During each of the
two years in the period ended March 31, 2014, we granted stock options at exercise prices equal to or greater than the quoted market
price of our common stock on the grant date. The fair value of each option grant was estimated on the date of grant using the Black-Scholes
option pricing model with the following weighted average assumptions:
March 31,
2014
2013
Expected life (years)
1.6 – 6.02
2.6 -10.0
Risk-free interest rate
0.19% - 1.84%
0.63%-2.22%
Volatility
127% - 140%
124% - 166%
Dividend yield
0%
0%
The expected option
life assumption is estimated based on the simplified method. Accordingly, the Company has utilized the average of the contractual
term of the options and the weighted average vesting period for all options to calculate the expected option term. The risk-free
interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options.
The expected volatility is based on the historical volatility of our stock commensurate with the expected life of the stock-based
award. We do not anticipate paying dividends on the common stock in the foreseeable future.
We recognize stock-based
compensation cost over the vesting period using the straight-line single option method. Stock-based compensation expense is recognized
only for those awards that are ultimately expected to vest. An estimated forfeiture rate has been applied to unvested awards for
the purpose of calculating compensation cost. The estimated forfeiture rate of 0% per year is based on the historical forfeiture
activity of unvested stock options. These estimates are revised, if necessary, in future periods if actual forfeitures differ from
the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs.
A summary of stock
option activity is as follows:
Number of
Shares
Weighted-
Average
Exercise
Price/Share
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (1)
Outstanding — March 31, 2012
1,355,132
$
1.14
Granted (weighted-average fair value of $0.26 per share)
4,063,109
0.29
Exercised
—
—
Forfeited
(322,500
)
0.98
Expired
—
—
Outstanding — March 31, 2013
5,095,741
$
0.47
Granted (weighted-average fair value of $0.24 per share)
7,673,272
0.28
Exercised
(657,000
)
0.20
Forfeited
(197,808
)
0.32
Expired
(20,000
)
6.00
Outstanding — March 31, 2014
11,894,205
$
0.35
8.6
$
2,578,900
Vested (exercisable) — March 31, 2014
5,543,002
$
0.42
8.0
$
1,110,600
Unvested (unexercisable) — March 31, 2014
6,351,203
$
0.30
3.0
$
1,468,300
(1)
Aggregate intrinsic value represents the difference between the exercise price of the option and the closing market price of the common stock on March 31, 2014, which was $0.52 per share.
F-
22
The following table
summarizes information with respect to stock options outstanding and exercisable at March 31, 2014:
Exercise Price
Number
Outstanding
Weighted-
Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise
Price
Number
Exercisable
Weighted-
Average
Exercise
Price
$0.17 – 0.48
10,523,036
8.9
$
0.27
4,428,083
$
0.27
$0.52 – 0.98
1,234,469
6.3
$
0.66
987,594
$
0.66
$1.05 – 2.20
48,600
6.4
$
1.64
39,225
$
1.69
$4.30 – 8.31
88,100
2.3
$
4.74
88,100
$
4.74
11,894,205
5,543,002
As of March 31, 2014,
there was unrecognized compensation expense of $1.6 million related to unvested stock options, which we expect to recognize
over a weighted average period of 3.0 years.
Note 13. Income
Taxes
Significant components
of the Company's deferred tax assets as of March 31, 2014 and 2013 are shown below:
March 31,
2014
2013
(000's)
Deferred tax assets:
Net operating loss carryforward
$
15,379
$
13,505
Research credits
60
51
Expenses recognized for granting of options and warrants
1,651
1,319
Accrued expenses and reserves
135
32
Valuation allowance
(17,225
)
(14,907
)
$
—
$
—
Based on the weight
of available evidence, the Company's management has determined that it is more likely than not that the net deferred tax
assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets.
The Company's income tax provision consists of state minimum taxes.
The income tax provision
differs from that computed using the federal statutory rate applied to income before taxes as follows:
March 31,
2014
2013
Computed tax benefit at federal statutory rate
$
(6,650,000
)
$
(2,169,000
)
State tax, net of federal benefit
(327,000
)
(359,000
)
Warrant MTM Adjustment
(7,000
)
(6,000
)
Induced conversion costs
4,663,000
—
Interest expense
—
1,000
Permanent items and other
4,600
215,600
Valuation allowance
2,318,000
2,319,000
$
1,600
$
1,600
F-
23
At March 31,
2014, the Company has federal and state net operating loss carryforwards of approximately $39,086,000 and $35,759,000 which will
begin to expire in 2020, unless previously utilized, and as of 2012 have already begun to for state carryforwards. At March 31,
2014, the Company has federal and California research and development tax credits of approximately $18,000 and $64,000, respectively.
The federal research tax credit begins to expire in 2026 unless previously utilized and the California research tax credit has
no expiration date.
Utilization of the
net operating loss and research and development carryforwards might be subject to a substantial annual limitation due to ownership
change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue
Code of 1986, as amended (the "Code"), as well as similar state and foreign provisions. These ownership changes may
limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax,
respectively. In general, an "ownership change" as defined by Section 382 of the Code results from a transaction
or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding
stock of a company by certain stockholders or public groups. Since the Company's formation, the Company has raised capital
through the issuance of capital stock on several occasions which, combined with the purchasing stockholders' subsequent disposition
of those shares, may have resulted in such an ownership change, or could result in an ownership change in the future upon subsequent
disposition.
The Company has not
completed a study to assess whether an ownership change has occurred. If the Company has experienced an ownership change, utilization
of the NOL or R&D credit carryforwards would be subject to an annual limitation under Section 382 of the Code, which is
determined by first multiplying the value of the Company's stock at the time of the ownership change by the applicable long-term,
tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a
portion of the NOL or R&D credit carryforwards before utilization. Further, until a study is completed and any limitation is
known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Due to the existence
of the valuation allowance, future changes in the Company's unrecognized tax benefits will not impact its effective tax rate.
Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets
with a corresponding reduction of the valuation allowance.
On September 13, 2013,
the U.S. Treasury Department released final income tax regulations on the deduction and capitalization of expenditures related
to tangible property. These final regulations apply to tax years beginning on or after January 1, 2014, and may be adopted in earlier
years. The Company does not intend to early adopt the tax treatment of expenditures to improve tangible property and the capitalization
of inherently facilitative costs to acquire tangible property as of January 1, 2013. The tangible property regulations will require
the Company to make additional tax accounting method changes as of January 1, 2014; however, management does not anticipate the
impact of these changes to be material to the Company's consolidated financial position, its results of operations and its
footnote disclosures.
Note 14. Quarterly
Financial Data (Unaudited)
A summary of quarterly
financial data is as follows ($ in '000's):
Quarter Ended
June 30
September
30
December
31
March 31
Year ended March 31, 2014
Total revenues
$
488
$
580
$
757
$
835
Gross margin
$
55
$
72
$
167
$
143
Operating loss
$
(1,260
)
$
(1,287
)
$
(1,257
)
$
(1,274
)
Net loss
$
(1,324
)
$
(14,960
)
$
(1,840
)
$
(1,441
)
Net loss per share, basic and diluted
$
(0.03
)
$
(0.38
)
$
(0.03
)
$
(0.02
)
Year ended March 31, 2013
Total revenues
$
191
$
234
$
307
$
368
Gross loss
$
(163
)
$
(111
)
$
(62
)
$
(153
)
Operating loss
$
(1,541
)
$
(1,554
)
$
(1,549
)
$
(1,681
)
Net  loss
$
(1,546
)
$
(1,551
)
$
(1,567
)
$
(1,717
)
Net loss per share, basic and diluted
$
(0.04
)
$
(0.04
)
$
(0.04
)
$
(0.05
)
Earnings per basic
and diluted shares are computed independently for each of the quarters presented based on basic and diluted shares outstanding
per quarter and, therefore, may not sum to the totals for the year.
F-
24
Note 15. Subsequent
Events
Designation
of Class A Preferred Stock
On May 2, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation which designated 800,000 shares of
the Company's previously authorized preferred stock, par value $0.001, as Class A Preferred Stock ("Preferred Stock").
The rights, preferences,
and privileges of the Preferred Stock are summarized as follows:
·
Dividends shall accrue on shares of Preferred Stock at the rate of $0.96 per annum. Such dividends shall accrue day-to-day, shall be cumulative, and shall be payable on when, as, and if declared by the Board of Directors of the Company.
·
In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Registrant, holders of Preferred Stock then outstanding shall be entitled to receive a preference payment equal to $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon.
·
Shares of Preferred Stock shall vote together with the common stock on an as-converted basis.
·
At any time after September 1, 2014, shares of Preferred Stock shall be convertible into thirty shares of Common Stock. In addition, accrued but unpaid dividends on the Preferred Stock will also be convertible into common stock after September 1, 2014 at the rate of one share for each $0.40 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination, certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving the Company.
·
Shares of the Preferred Stock shall be subject to redemption by the Company at any time on or after January 15, 2017, upon payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus all accrued but unpaid dividends thereon.
·
The Preferred Stock is subject to a liquidation preference over common stock equal to $12 per share and the unpaid accrued dividend. Holders of the Preferred Stock will vote with holders of the Company's common stock, but will have thirty votes per share of Preferred Stock held compared to one vote for each share of common stock.
Issuance
of Class A Preferred Stock
In May 2014, the Company
entered into definitive agreements for a private placement of its securities to certain institutional and accredited investors
(the "Investors") pursuant to certain Subscription Agreements and Elections to Convert between the Company and the
Investors. Through June 13, 2014, aggregate gross cash proceeds of $839,600 (approximately $628,700 after estimated cash offering
expenses) were collected in exchange for the issuance of 69,964 shares of our Class A Preferred Stock, and warrants, exercisable
for five years, to purchase up to a total of 559,712 shares of our common stock at an exercise price of $0.50 per share. The
Company intends to use the net proceeds for working capital purposes.
Pursuant to the Subscription
Agreements, the Company issued shares of a newly established Class A Preferred Stock and warrants to purchase common stock of Cryoport.
The shares and warrants were issued as a unit (a "Unit") consisting of (i) one share of Class A Convertible Preferred
Stock and (ii) one warrant to purchase eight (8) shares of Common Stock at an exercise price of $0.50 per share, which are
immediately exercisable and may be exercised at any time on or before March 31, 2019.
Pursuant to the terms
of the 5% Bridge Notes issued by the Company between December 6, 2013 and March 13, 2014 with a total original principal amount
of $1,793,000 (the "5% Bridge Notes"), the issuance of the Units to Investors at $12.00 per Unit entitled the holders
of the 5% Bridge Notes to convert up to the entire principal amount and accrued interest under the 5% Bridge Notes into Units at
a rate of $10.80 per Unit. Through June 13, 2014, 5% Bridge Note holders totaling $1,743,000
in original principal sum elected
to convert their 5% Bridge Notes, including accrued interest, for Units in exchange for the issuance of 163,608 shares of our Class
A Preferred Stock and warrants to purchase up to 1,308,864 shares of our commons stock at an exercise price of $0.50 per share.
Two of the 5% Bridge Note holders that executed Subscription Agreements to convert 5% Bridge Notes in the aggregate principal amount
of $220,000, are affiliates of the Company – Jerrell W. Shelton, the Company's Chief Executive Officer, and GBR Investments,
LLC, which is managed by Richard Rathmann, a Director and Chairman of the Board of Directors of the Company (collectively, the
"Affiliates").
F-
25
Emergent Financial
Group, Inc. served as the Company's placement agent in this transaction and received, with respect to the gross proceeds
received from Investors who converted their 5% Bridge Notes into Units (not including those conversions by the Affiliates), a commission
of 3% and a non-accountable finance fee of 1% of such proceeds, and with respect to gross proceeds received from all other Investors,
a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds received from such Investors, plus
reimbursement of legal expenses of up to $40,000. Emergent Financial Group, Inc. will also be issued a warrant to purchase three
shares of Common Stock at an exercise price of $0.50 per share for each Unit issued in this transaction. The Company and Emergent
Financial Group, Inc. have agreed that the offering of Units to new Investors will conclude on July 14, 2014.
As of March 31, 2014,
233,572 shares of Preferred Stock and 1,868,576 of the related warrants were outstanding for Investors and 638,646 warrants
were outstanding for Emergent in connection with the Preferred Stock offering and the 5% Bridge Notes conversion.
F-
26
Cryoport, Inc. and
Subsidiary
Condensed Consolidated Balance Sheets
December 31,
March 31,
2014
2014
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
773,922
$
369,581
Accounts receivable, net of allowance for doubtful accounts of $10,000 and $24,600, respectively
407,459
515,825
Inventories
66,958
29,703
Other current assets
122,413
196,505
Total current assets
1,370,752
1,111,614
Property and equipment, net
349,515
408,892
Intangible assets, net
146,315
180,086
Deposits and other assets
—
9,358
Total assets
$
1,866,582
$
1,709,950
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and other accrued expenses
$
713,465
$
579,678
Accrued compensation and related expenses
617,636
454,288
Notes payable and accrued interest, net of discount of $274,500 at December 31, 2014
343,432
—
Convertible debentures payable and accrued interest, net of discount of $184,750 at March 31, 2014
—
1,622,359
Related party notes payable and accrued interest
1,309,682
1,358,120
Total current liabilities
2,984,215
4,014,445
Commitments and contingencies
Stockholders' (Deficit) Equity:
Preferred stock, $0.001 par value; 2,500,000 shares authorized:
Class A convertible preferred stock — $0.001 par value; 800,000 shares authorized; 442,888 and 0 shares issued and outstanding at December 31, 2014 and March 31, 2014, respectively (aggregate liquidation preference of $5,509,557 at December 31, 2014)
443
—
Common stock, $0.001 par  value; 250,000,000 shares authorized; 60,057,846 and 59,979,954 issued and outstanding at December 31, 2014 and March 31, 2014, respectively
60,058
59,980
Additional paid-in capital
92,750,244
83,512,399
Accumulated deficit
(93,928,378
)
(85,876,874
)
Total stockholders' deficit
(1,117,633
)
(2,304,495
)
Total liabilities and stockholders' deficit
$
1,866,582
$
1,709,950
See accompanying notes
to condensed consolidated financial statements.
F-
27
Cryoport, Inc. and
Subsidiary
Condensed Consolidated
Statements of Operations
(unaudited)
Three Months Ended
December 31,
Nine Months Ended
December 31,
2014
2013
2014
2013
Revenues
$
975,188
$
757,327
$
2,736,776
$
1,825,117
Cost of revenues
740,651
590,266
1,937,926
1,531,312
Gross margin
234,537
167,061
798,850
293,805
Operating costs and expenses:
Selling, general and administrative
1,492,732
1,305,562
4,431,290
3,768,049
Research and development
99,052
118,490
267,575
329,569
Total operating costs and expenses
1,591,784
1,424,052
4,698,865
4,097,618
Loss from operations
(1,357,247
)
(1,256,991
)
(3,900,015
)
(3,803,813
)
Other (expense) income:
Debt conversion expense
—
(552,750
)
—
(13,713,767
)
Interest expense
(48,605
)
(31,786
)
(1,185,337
)
(626,781
)
Other expense, net
(1,906
)
—
(2,829
)
—
Change in fair value of derivatives
—
1,196
—
20,845
Loss before provision for income taxes
(1,407,758
)
(1,840,331
)
(5,088,181
)
(18,123,516
)
Provision for income taxes
—
—
(1,600
)
—
Net loss
(1,407,758
)
(1,840,331
)
(5,089,781
)
(18,123,516
)
Preferred stock beneficial conversion charge
(492,910
)
—
(2,961,723
)
—
Undeclared cumulative preferred dividends
(95,304
)
—
(194,901
)
—
Net loss attributable to common stockholders
$
(1,995,972
)
$
(1,840,331
)
$
(8,246,405
)
$
(18,123,516
)
Net loss per share attributable to common stockholders – basic and diluted
$
(0.03
)
$
(0.03
)
$
(0.14
)
$
(0.40
)
Weighted average shares outstanding – basic and diluted
60,057,846
58,995,821
60,032,189
45,342,320
See accompanying notes
to condensed consolidated financial statements.
F-
28
Cryoport, Inc. and
Subsidiary
Condensed Consolidated
Statements of Cash Flows
(unaudited)
For the Nine Months Ended
December 31,
2014
2013
Cash Flows From Operating Activities:
Net loss
$
(5,089,781
)
$
(18,123,516
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
155,226
258,189
Amortization of debt discount and deferred financing costs
1,148,153
540,648
Stock-based compensation expense
565,220
509,966
Change in fair value of derivative instruments
—
(20,845
)
Loss on disposal of cryogenic shippers
5,773
5,884
Debt conversion expense
—
13,713,767
Provision for bad debt
465
—
Changes in operating assets and liabilities:
Accounts receivable, net
107,901
(418,590
)
Inventories
(37,255
)
9,204
Other assets
(45,022
)
(22,898
)
Accounts payable and other accrued expenses
154,249
129,415
Accrued compensation and related expenses
163,348
174,006
Accrued interest
36,430
85,364
Net cash used in operating activities
(2,835,293
)
(3,159,406
)
Cash Flows From Investing Activities:
Purchases of property and equipment
(67,851
)
(139,541
)
Net cash used in investing activities
(67,851
)
(139,541
)
Cash Flows From Financing Activities:
Proceeds from the issuance of preferred stock, net of offering costs
2,802,854
—
Proceeds from exercise of stock options and warrants
11,631
180,001
Proceeds from issuance of notes payable
615,000
—
Proceeds from issuance of convertible debentures
—
3,206,301
Repayment of convertible debentures
(50,000
)
—
Repayment of offering and deferred costs
—
(358,489
)
Repayment of related party notes payable
(72,000
)
(72,000
)
Net cash provided by financing activities
3,307,485
2,955,813
Net change in cash and cash equivalents
404,341
(343,134
)
Cash and cash equivalents — beginning of period
369,581
563,104
Cash and cash equivalents — end of period
$
773,922
$
219,970
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Offering costs in connection with convertible preferred stock included in accounts payable
$
9,658
$
—
Estimated relative fair value of warrants issued in connection with convertible debentures payable
$
—
$
255,452
Estimated relative fair value of warrants issued in connection with notes payable
$
312,680
$
—
Accretion of convertible preferred stock beneficial conversion feature and relative fair value of warrants issued in connection with the convertible preferred stock units to accumulated deficit
$
2,961,723
$
—
Conversion of Bridge Notes payable and accrued interest into shares of common stock and warrants
$
—
$
4,127,202
Conversion of convertible debentures payable and accrued interest into convertible preferred stock units
$
1,766,997
$
—
See accompanying notes
to condensed consolidated financial statements.
F-
29
Cryoport, Inc. and
Subsidiary
Notes to Condensed
Consolidated Financial Statements
For the Nine Months
Ended December 31, 2014 and 2013
(Unaudited)
Note 1. Management's
Representation and Basis of Presentation
The accompanying unaudited
condensed consolidated financial statements have been prepared by Cryoport, Inc. (the "Company", "our"
or "we") in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP")
for interim financial information, and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X promulgated by
the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes
required by U.S. GAAP for complete financial statement presentation. However, the Company believes that the disclosures are adequate
to make the information presented not misleading. In the opinion of management, all adjustments (consisting primarily of normal
recurring accruals) considered necessary for a fair presentation have been included.
Operating results
for the nine months ended December 31, 2014 are not necessarily indicative of the results that may be expected for the year ending
March 31, 2015. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and related notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 2014.
The Company has evaluated
subsequent events through the date of this filing, and determined that no subsequent events have occurred that would require recognition
in the unaudited condensed consolidated financial statements or disclosure in the notes thereto other than as disclosed in the
accompanying notes.
Note 2. Nature
of the Business
Cryoport, Inc. is
a Nevada corporation originally incorporated under the name G.T.5-Limited ("GT5") on May 25, 1990. In connection with
a Share Exchange Agreement, on March 15, 2005 we changed our name to Cryoport, Inc. and acquired all of the issued and outstanding
shares of common stock of Cryoport Systems, Inc., a California corporation. Cryoport Systems, Inc., which was originally formed
in 1999 as a California limited liability company, and subsequently reorganized into a California corporation on December 11, 2000,
remains an operating company under Cryoport, Inc. We became "publicly held" by the reverse merger with GT5 described
above. Over time the Company transitioned from being a development company to a fully operational public company in early 2011,
providing global cryogenic logistics solutions to the biotechnology and life sciences industries.
Since 2011, we have
validated, perfected and expanded the features of the Cryoport Express
®
logistics solutions and have now managed
shipments of the Cryoport Express
®
Shippers through its Cryoportal
TM
into and out of more than 80 countries
with more than 20,000 shipments, handling a vast array of different biological products and specimens.
We provide cryogenic
logistics solutions to the life sciences industry through a combination of purpose-built proprietary packaging, information technology
and specialized cold chain logistics knowhow. We view our solutions as disruptive to the "older technologies" of dry
ice and liquid nitrogen, in that our solutions are comprehensive and combine our competencies in configurations that are customized
to our client's requirements. We provide comprehensive, reliable, economic alternatives to all existing logistics solutions
and services utilized for frozen shipping in the life sciences industry (e.g., personalized medicine, stem cells, cell lines, vaccines,
diagnostic materials, semen, eggs, embryos, cord blood, bio-pharmaceuticals, infectious substances, and other commodities that
require continuous exposure to cryogenic or frozen temperatures). We provide the ability to monitor, record and archive crucial
information for each shipment that can be used for scientific and regulatory purposes.
Our Cryoport Express
®
Solutions include a sophisticated cloud-based logistics operating platform, which is branded as the Cryoportal™. The Cryoportal™
supports the management of the entire shipment and logistics process through a single interface, including initial order input,
document preparation, customs clearance, courier management, shipment tracking, issue resolution, and delivery. In addition, it
provides unique and incisive information dashboards and validation documentation for every shipment. The Cryoportal™ records
and retains a fully documented "chain-of-custody" and, at the client's option, "chain-of-condition"
for every shipment, helping ensure that quality, safety, efficacy, and stability of shipped commodities are maintained throughout
the process. This recorded and archived information allows our clients to meet exacting requirements necessary for scientific work
and for proof of regulatory compliance during the logistics phase.
F-
30
The branded packaging
for our Cryoport Express
®
Solutions includes our liquid nitrogen dry vapor shippers, the Cryoport Express
®
Shippers. The Cryoport Express
®
Shippers
are cost-effective and reusable cryogenic transport containers
(our standard shipper is a patented vacuum flask) utilizing an innovative application of "dry vapor" liquid nitrogen
("LN2") technology. Cryoport Express
®
Shippers are International Air Transport Association ("IATA")
certified and validated to maintain stable temperatures of minus 150° C and below for a 10-day dynamic shipment period. The
Company currently features three Cryoport Express
®
Shippers: the Standard Dry Shipper (holding up to 75 2.0 ml vials),
the High Volume Dry Shipper (holding up to 500 2.0 ml vials) and the recently introduced Cryoport Express
®
CXVC1
Shipper (holding up to 1,500 2.0 ml vials). In addition, we assist clients with internal secondary packaging as well (e.g., vials,
canes, straws, plates, etc.)
Our most used solution
is the "turnkey" solution, which can be accessed directly through our cloud-based Cryoportal™ or by contacting
Cryoport Client Care for order entry. Once an order is placed and cleared, we ship a fully charged Cryoport Express
®
Shipper package to the client who conveniently loads its frozen commodity into the inner chamber of the Cryoport Express
®
Shipper.  The customer then closes the shipper package and reseals the shipping box displaying the next recipient's
address ("Flap A") for pre-arranged carrier pick up.  Cryoport arranges for the pick-up of the parcel by a shipping
service provider, which is designated by the client or chosen by Cryoport, for delivery to the client's intended recipient. 
The recipient simply opens the shipper package and removes the frozen commodity that has been shipped.  The recipient then
reseals the package, displaying the nearest Cryoport Operations Center address ("Flap B"), making it ready for pre-arranged
carrier pick-up. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper, it is cleaned, put
through quality assurance testing, and returned to inventory for reuse.
In late 2012, we shifted
our focus to become a comprehensive cryogenic logistics solutions provider. Recognizing that clients in the life sciences industry
have varying requirements, we unbundled our technologies, establishing customer facing solutions and taking a consultative approach
to the market. Today, in addition to our standard "Turn-key Solution," described above, we also provide the following
customer facing, value-added solutions to address our various clients' needs:
·
"
Customer Staged Solution
," designed for clients making 50 or more shipments per month. Under this solution, we supply an inventory of our Cryoport Express
®
Shipper packages to our customer, in an uncharged state, enabling our customer (after training/certification) to charge them with liquid nitrogen and use our Cryoportal™ to enter orders with shipping and delivery service providers for the transportation of the package. Once the order is released, our customer services professionals monitor the shipment and the return of the shipper for cleaning, quality assurance testing and reuse.
·
"
Customer Managed Solution
," a limited customer implemented solution whereby we supply our Cryoport Express
®
Shippers packages to clients in a fully charged state, but leaving it to the client to manage the shipping, including the selection of the shipping and delivery service provider and the return of the shipper to us. Under this solution, the customer accepts a significant level of risk for a successful shipment.
·
"
powered by Cryoport
SM
," available to providers of shipping and delivery services who seek to offer a "branded" cryogenic logistics solution as part of their service offerings, with "
powered by Cryoport
SM
" appearing prominently on the offering software interface and packaging. This solution can also be private labeled upon meeting certain requirements, such as minimum required shipping volumes.
·
"
Integrated Solution,
"
which is our outsource solution. It is our most comprehensive and complex solution. It involves our management of the entire cryogenic logistics process for our client, including Cryoport employees at the client's site to manage the client's cryogenic logistics function in total.
·
"
Regenerative Medicine Point-of-Care Repository Solution,
" designed for allogeneic therapies. In this model we supply our Cryoport Express
®
Shipper package to ship and store cryogenically preserved life science products for up to 6 days (or longer periods with supplementary shippers) at a point-of-care site, with the Cryoport Express
®
Shipper serving as a temporary freezer/repository enabling the efficient and effective distribution of temperature sensitive allogeneic cell-based therapies without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service professionals monitor each shipment throughout the predetermined process including the return of the shipper to us. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through quality assurance testing, and returned to inventory for reuse.
·
"
Personalized Medicine and Cell-based Immunotherapy Solution,
" designed for autologous therapies.   In this model, our Cryoport Express
®
Shipper package serves as an enabling technology for the safe transportation of manufactured autologous cellular-based immunotherapy market by providing a comprehensive logistics solution for the verified chain of custody and condition transport from, (a) the collection of the patient's cells in a hospital setting, to (b) a central processing facility where they are manufactured into a personalized medicine, to (c) the safe, cryogenically preserved return of these irreplaceable cells to a point-of-care treatment facility.  If required, the Cryoport Express
®
Shipper can then serve as a temporary freezer/repository to allow the efficient distribution of this personalized medicine to the patient when and where the medical provider needs it most without the expense, inconvenience, and potential costly failure of an on-sight, cryopreservation device. Our customer service professionals monitor each shipment throughout the predetermined process, including the return of the shipper to us. When the Cryoport Operations Center receives the Cryoport Express
®
Shipper package it is cleaned, put through quality assurance testing, and returned to inventory for reuse.
F-
31
Agreements
Zoetis.
In
December 2012, we signed an agreement with Pfizer Inc. relating to Zoetis Inc. (formerly the animal health business unit of
Pfizer Inc.) pursuant to which we were engaged to manage frozen shipments of a key poultry vaccine. Under this arrangement, Cryoport
provides on-site logistics personnel and its logistics management operating platform, the Cryoportal
TM
, to manage shipments
from the Zoetis manufacturing site in the United States to domestic customers as well as various international distribution centers.
As part of our logistics management services, Cryoport is constantly analyzing logistics data and processes to further introduce
economies and reliability throughout the network, ensuring products arrive at their destinations in specified conditions, on-time
and with the optimum utilization of resources. The Company manages Zoetis' total fleet of dewar flask shippers used for this
purpose, including liquid nitrogen shippers. In July 2013, the agreement was amended to expand Cryoport's scope to manage
all logistics of Zoetis' key frozen poultry vaccine to all Zoetis' international distribution centers as well as all
domestic shipments. In October 2013, the agreement was further amended to further expand Cryoport's role to include the logistics
management for a second poultry vaccine.
FedEx.
In January
2013, we entered into a master agreement with Federal Express Corporation ("FedEx") (the "FedEx Agreement")
renewing these services and providing FedEx with a non-exclusive license and right to use a customized version of our Cryoportal
TM
for the management of shipments made by FedEx customers. The FedEx Agreement became effective on January 1, 2013 and, unless sooner
terminated as provided in the FedEx Agreement, expires on December 31, 2015. FedEx has the right to terminate this agreement at
any time for convenience upon 180 days' notice.
Under our FedEx Agreement,
we provide frozen shipping logistics services through the combination of our purpose-built proprietary technologies and turnkey
management processes. FedEx markets and sells Cryoport's services for frozen temperature-controlled cold chain transportation
as its FedEx
®
Deep Frozen Shipping Solution on a non-exclusive basis and at its sole expense. During fiscal year
2013, the Company worked closely with FedEx to further align its sales efforts and accelerate penetration within FedEx's
life sciences customer base through improved processes, sales incentives, joint customer calls and more frequent communication
at the sales and executive level. In addition, FedEx has developed a FedEx branded version of the Cryoportal
TM
software
platform, which is "
powered by Cryoport
SM
" for use by FedEx and its customers giving them access
to the full capabilities of our cloud-based logistics management software platform.
Liventa Biosciences.
In February 2014, we entered into a services agreement with Liventa Bioscience, Inc. ("Liventa"), a privately-held,
commercial stage biotechnology company focused on cell-based, advanced biologics in the orthopedic industry. Under this agreement,
Liventa will use Cryoport's Regenerative Medicine
Point-of-Care Repository Solution for the logistics of its
cell-based therapies requiring cryogenic temperatures and also provide Cryoport Express
®
Solutions to other biologics
suppliers within the orthopedic arena. The agreement combines Cryoport's proprietary, purpose-built cold chain logistics
solutions for cell-based and advanced biologic tissue forms with Liventa's distribution capability to orthopedic care providers.
The implementation of Cryoport's Regenerative Medicine
Point-of-Care Repository Solution will eliminate the
risks of degradation and also eliminate the need for expensive onsite cryogenic freezers for storage of cell-based orthopedic therapies.
This will enable Liventa to confidently serve orthopedic practices, surgical centers, pain clinics, hospitals and, eventually,
pharmacies and specialty care providers. The agreement has an initial three-year term and may be renewed for consecutive three-year
terms, unless earlier terminated by either party. Liventa also agreed to certain performance criteria and the issuance of 150,000
shares of its common stock to Cryoport in exchange for the exclusive right to offer, market and promote Cryoport Express
®
Solutions for cellular-based therapies requiring cryogenic temperatures for use in the orthopedic arena in the United States.
DHL.
In June
2014, we entered into a master agreement with LifeConEx, a part of DHL Global Forwarding ("DHL"). This relationship
with DHL is a further implementation of the Company's expansion of distribution partnerships under the "
powered
by Cryoport
SM
" model described above, allowing us to expand our sales and marketing reach through our partners
and build awareness of the benefits of our validated cryogenic solution offerings. DHL can now enhance and supplement its cold
chain logistics offerings to its life sciences and healthcare customers with Cryoport's validated cryogenic solutions. DHL
added 15 additional certified Life Sciences stations in the second quarter of 2014 bringing the Thermonet network to 60 stations
in operation. Over the course of rolling out our new relationship, this expanded network will offer Cryoport's cryogenic
solutions under the DHL brands as "
powered by Cryoport
SM
". In addition, DHL's customers will
be able to have direct access to our cloud-based order entry and tracking portal to order Cryoport Express
®
Solutions
and receive preferred DHL shipping rates and discounts. Our proprietary logistics management operating platform, the Cryoportal
TM
,
is integrated with DHL's tracking and billing systems to provide DHL life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.
F-
32
UPS.
In October
2014, we added United Parcel Services, Inc. ("UPS") as our third major distributor by entering into an agreement with
UPS Oasis Supply Corporation, a part of UPS, whereby UPS will offer our validated and comprehensive cryogenic solutions to its
life sciences and healthcare customers on a global basis. This relationship with UPS is a further implementation of the Company's
expansion of distributors under the "
powered by Cryoport
SM
" model described above, allowing us to
further expand our sales and marketing reach through our partners and build awareness of the benefits of our validated cryogenic
solution offerings through UPS.
Over the course of
rolling out our new relationship with UPS, UPS customers will have direct access to our cloud-based order entry and tracking portal
to order Cryoport Express
®
Solutions and gain access to UPS's broad array of domestic and international shipping
and logistics solutions at competitive prices. Our proprietary logistics management operating platform, the Cryoportal
TM
,
is integrated with UPS's tracking and billing systems to provide UPS life sciences and healthcare customers with a seamless
way of accessing critical information regarding shipments of biological material worldwide.
Cryoport now serves
and supports the three largest integrators in the world, responsible for over 85% of worldwide air freight, with its advanced cryogenic
logistics solutions for life sciences. We operate with each independently and confidentially in support of their respective market
and sales strategies. We maintain our independent partnerships with strict confidentiality guidelines within the Company. These
agreements represent a significant validation of our solutions and the way we conduct our business.
In summary, we serve
the life sciences industry with cryogenic logistics solutions that are advanced, comprehensive, reliable, validated, and efficient.
Our clients include those companies and institutions that have logistics requirements for personalized medicine, immunotherapies,
stem cells, cell lines, tissue, vaccines, in-vitro fertilization, cord blood, and other temperature sensitive commodities of life
sciences.
Companies or institutions
such as therapy developers for personalized medicine, bio-pharmaceuticals, research, contract research organizations, diagnostic
laboratories, contract manufacturers, cord blood repositories, vaccine manufacturers, animal husbandry related companies, in-vitro
fertilization clinics, and other organizations handling commodities requiring reliable cryogenic logistics solutions are amongst
our clients. These companies usually operate within heavily regulated environments and as such, changing vendors and distribution
practices typically require a number of steps, which may include the audit of our facilities, review of our procedures, qualifying
us as a vendor, and performing test shipments. This process can take three to nine months or longer to complete prior to a potential
customer adopting one or more of our Cryoport Express
®
Solutions.
Going Concern
The unaudited condensed
consolidated financial statements have been prepared using the accrual method of accounting in accordance with U.S. GAAP and have
been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal
course of business. We have sustained operating losses since our inception and have used substantial amounts of working capital
in our operations. At December 31, 2014, we had an accumulated deficit of $93.9 million. During the nine months ended December
31, 2014, we used cash in operations of $2.8 million and had a net loss of $5.1 million.
We expect to continue
to incur substantial additional operating losses from costs related to the commercialization of our Cryoport Express
®
Solutions and do not expect that revenues from operations will be sufficient to satisfy our funding requirements in the near term.
We believe that our cash resources at December 31, 2014, additional funds raised subsequent to December 31, 2014 through the secured
promissory notes (see Note 10), together with the revenues generated from our services will be sufficient to sustain our planned
operations into the fourth quarter of fiscal year 2015; however, we must obtain additional capital to fund operations thereafter
and for the achievement of sustained profitable operations. These factors raise substantial doubt about our ability to continue
as a going concern. We are currently working on funding alternatives in order to secure sufficient operating capital to allow us
to continue to operate as a going concern.
F-
33
Future capital requirements
will depend upon many factors, including the success of our commercialization efforts and the level of customer adoption of our
Cryoport Express
®
Solutions as well as our ability to establish additional collaborative arrangements. We cannot
make any assurances that the sales ramp will lead to achievement of sustained profitable operations or that any additional financing
will be completed on a timely basis and on acceptable terms or at all. Management's inability to successfully achieve significant
revenue increases or implement cost reduction strategies or to complete any other financing will adversely impact our ability to
continue as a going concern. To address this issue, the Company is seeking additional capitalization to properly fund our efforts
to become a self-sustaining financially viable entity.
Note 3. Summary
of Significant Accounting Policies
Basis of
Presentation
The accompanying condensed
consolidated financial statements have been prepared in accordance with U.S. GAAP.
Principles
of Consolidation
The condensed consolidated
financial statements include the accounts of Cryoport, Inc. and its wholly owned subsidiary, Cryoport Systems, Inc. All intercompany
accounts and transactions have been eliminated.
Use of Estimates
The preparation of
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from estimated amounts.
The Company's significant estimates include allowances for doubtful accounts, recoverability of long-lived assets, allowance
for inventory obsolescence, deferred taxes and their accompanying valuations and valuation of equity instruments.
Fair Value
of Financial Instruments
The Company's
financial instruments consist of cash and cash equivalents, accounts receivable, related-party notes payable, convertible debentures
payable, notes payable, accounts payable and accrued expenses. The carrying value for all such instruments approximates fair value
at December 31, 2014 and March 31, 2014 due to their short-term nature. The difference between the fair value and recorded values
of the related party notes payable is not significant.
Cash and
Cash Equivalents
The Company considers
highly liquid investments with original maturities of 90 days or less to be cash equivalents.
Customers
The Company grants
credit to customers within the U.S. and to a limited number of international customers and does not require collateral. Revenues
from international customers are generally secured by advance payments except for a limited number of established foreign customers.
The Company generally requires advance or credit card payments for initial revenues from new customers. The Company's ability
to collect receivables is affected by economic fluctuations in the geographic areas and industries served by the Company. Reserves
for uncollectible amounts are provided based on past experience and a specific analysis of the accounts, which management believes
is sufficient. Accounts receivable at December 31, 2014 and March 31, 2014 are net of reserves for doubtful accounts of $10,000
and $24,600, respectively. Although the Company expects to collect amounts due, actual collections may differ from the estimated
amounts.
The majority of the
Company's customers are in the biotechnology, pharmaceutical and life science industries. Consequently, there is a concentration
of accounts receivable within these industries, which is subject to normal credit risk. At December 31, 2014 and March 31, 2014,
there was one customer that accounted for 19.3% and 30.6%, respectively, of net accounts receivable. No other single customer owed
us more than 10% of net accounts receivable at December 31, 2014 and March 31, 2014. The Company maintains reserves for bad debt
and such losses, in the aggregate, historically have not exceeded our estimates.
F-
34
For the nine months
ended December 31, 2014 and 2013, there was one customer that accounted for 25.0% and 31.0% of revenues, respectively. No other
single customer generated over 10% of revenues during the nine months ended December 31, 2014 and 2013.
The Company has revenue
from foreign customers primarily in Europe, Japan, Canada, India and Australia. During nine months ended December 31, 2014 and
2013, the Company had revenues from foreign customers of approximately $421,800 and $312,000, respectively, which constituted approximately
15.4% and 17.1% of total revenues, respectively.
Inventories
The Company's
inventories consist of accessories that are sold and shipped to customers along with pay-per-use containers that are not returned
to the Company with the containers at the culmination of the customer's shipping cycle. Inventories are stated at the lower
of cost or current estimated market value. Cost is determined using the standard cost method which approximates the first-in, first-to-expire
method. Inventories are reviewed periodically for slow-moving or obsolete status. The Company writes down the carrying value of
its inventories to reflect situations in which the cost of inventories is not expected to be recovered. Once established, write-downs
of inventories are considered permanent adjustments to the cost basis of the obsolete or excess inventories. Raw materials and
finished goods include material costs less reserves for obsolete or excess inventories. The Company evaluates the current level
of inventories considering historical trends and other factors, and based on the evaluation, records adjustments to reflect inventories
at its net realizable value. These adjustments are estimates, which could vary significantly from actual results if future economic
conditions, customer demand, competition or other relevant factors differ from expectations. These estimates require us to make
assessments about future demand for the Company's products in order to categorize the status of such inventory items as slow-moving,
obsolete or in excess-of-need. These estimates are subject to the ongoing accuracy of the Company's forecasts of market conditions,
industry trends, competition and other factors.
Property
and Equipment
The Company provides
shipping containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements
are similar to the accounting standard for leases since they convey the right to use the container over a period of time. The Company
retains the title to the containers and provides its customers the use of the container for a specific shipping cycle. At the culmination
of the customer's shipping cycle, the container is returned to the Company. As a result, the Company classifies the containers
as fixed assets for the per-use container program.
Property and equipment
are recorded at cost. Cryogenic shippers are depreciated using the straight-line method over their estimated useful lives of three
years. Equipment and furniture are depreciated using the straight-line method over their estimated useful lives (generally three
to seven years) and leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset
or the lease term, whichever is shorter. Equipment acquired under capital leases is amortized over the estimated useful life of
the assets or term of the lease, whichever is shorter and included in depreciation expense.
Betterments, renewals
and extraordinary repairs that extend the lives of the assets are capitalized; other repairs and maintenance charges are expensed
as incurred. The cost and related accumulated depreciation and amortization applicable to assets retired are removed from the accounts,
and the gain or loss on disposition is recognized in current operations.
Intangible
Assets
Intangible assets
are comprised of patents and trademarks and software development costs. The Company capitalizes costs of obtaining patents and
trademarks, which are amortized, using the straight-line method over their estimated useful life of five years. The Company capitalizes
certain costs related to software developed for internal use. Software development costs incurred during the preliminary or maintenance
project stages are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized
using the straight-line method over the estimated useful life of the software, which is five years. Capitalized costs include purchased
materials and costs of services including the valuation of warrants issued to consultants.
Long-lived
Assets
If indicators of impairment
exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets
can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment
by comparing the fair value to the carrying value. We believe the future cash flows to be received from the long-lived assets will
exceed the assets' carrying value, and accordingly, we have not recognized any impairment losses through December 31, 2014.
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35
Deferred
Financing Costs
Deferred financing
costs represent costs incurred in connection with the issuance of the convertible debentures payable and private equity financing.
Deferred financing costs related to the issuance of debt are amortized over the term of the financing instrument using the effective
interest method while deferred financing costs from equity financings are netted against the gross proceeds received from the equity
financings.
Convertible
Debentures
If a conversion feature
of conventional convertible debt is not accounted for as a derivative instrument and provides for a rate of conversion that is
below market value, this feature is characterized as a beneficial conversion feature ("BCF"). A BCF is recorded by
the Company as a debt discount. The convertible debt is recorded net of the discount related to the BCF. The Company amortizes
the discount to interest expense over the life of the debt using the effective interest rate method.
Income Taxes
The Company accounts
for income taxes under the provision of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification
("ASC") 740,
Income Taxes
, or ASC 740. As of December 31, 2014 and March 31, 2014, there were no unrecognized
tax benefits included in the accompanying condensed consolidated balance sheets that would, if recognized, affect the effective
tax rates.
Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Based on the weight
of available evidence, the Company's management has determined that it is more likely than not that the net deferred tax
assets will not be realized. Therefore, the Company has recorded a full valuation allowance against the net deferred tax assets.
The Company's income tax provision consists of state minimum taxes.
The Company's
policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual
for interest or penalties on its condensed consolidated balance sheets at December 31, 2014 and March 31, 2014, respectively
and has not recognized interest and/or penalties in the condensed consolidated statement of operations for the nine months ended
December 31, 2014 and 2013. The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31,
2014, the Company is no longer subject to U.S. federal examinations for years before 2010 and for California franchise and income
tax examinations for years before 2009. However, to the extent allowed by law, the taxing authorities may have the right to examine
prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the net operating
loss carry forward amount. The Company is not currently under examination by U.S. federal or state jurisdictions.
Revenue
Recognition
The Company provides
shipping containers to its customers and charges a fee in exchange for the use of the container. The Company's arrangements
are similar to the accounting standard for leases since they convey the right to use the containers over a period of time. The
Company retains title to the containers and provides its customers the use of the container for a specified shipping cycle. At
the culmination of the customer's shipping cycle, the container is returned to the Company.
The Company recognizes
revenue for the use of the shipper at the time of the delivery of the shipper to the end user of the materials shipped, and at
the time that collectability is reasonably certain. Revenue is based on gross revenues, net of discounts and allowances.
The Company also provides
logistics support and management to some customers, which may include onsite logistics personnel and other services. Revenue is
recognized for these services as services are rendered and at the time that collectability is reasonably certain.
Accounting
for Shipping and Handling Revenue, Fees and Costs
The Company classifies
amounts billed for shipping and handling as revenue. Shipping and handling fees and costs are included in cost of revenues in the
accompanying condensed consolidated statements of operations.
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36
Research
and Development Expenses
Expenditures relating
to research and development are expensed in the period incurred.
Stock-Based
Compensation
The Company accounts
for stock-based payments to employees and directors in accordance with stock-based payment accounting guidance which requires all
stock-based payments to employees and directors, including grants of employee stock options and warrants, to be recognized based
upon their fair values. The fair value of stock-based awards is estimated at grant date using the Black-Scholes Option Pricing
Model ("Black-Scholes") and the portion that is ultimately expected to vest is recognized as compensation cost over
the requisite service period.
Since stock-based
compensation is recognized only for those awards that are ultimately expected to vest, the Company has applied an estimated forfeiture
rate to unvested awards for the purpose of calculating compensation cost. These estimates will be revised, if necessary, in future
periods if actual forfeitures differ from estimates. Changes in forfeiture estimates impact compensation cost in the period in
which the change in estimate occurs. The estimated forfeiture rates at December 31, 2014 and March 31, 2014 were zero as the Company
has not had a significant history of forfeitures and does not expect significant forfeitures in the future.
Cash flows from the
tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options or warrants are classified
as financing cash flows. Due to the Company's loss position, there were no such tax benefits during the nine months ended
December 31, 2014 and 2013.
The Company uses Black-Scholes
to estimate the fair value of stock-based awards. The determination of fair value using Black-Scholes is affected by the Company's
stock price as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility,
risk-free interest rate, expected dividends and projected employee stock option exercise behaviors.
The Company's
stock-based compensation plans are discussed further in Note 9.
Equity Instruments
Issued to Non-Employees for Acquiring Goods or Services
Issuances of the Company's
common stock for acquiring goods or services are measured at the fair value of the consideration received or the fair value of
the equity instruments issued, whichever is more reliably measurable. The measurement date for the fair value of the equity instruments
issued to consultants or vendors is determined at the earlier of (i) the date at which a commitment for performance to earn
the equity instruments is reached (a "performance commitment" which would include a penalty considered to be of a magnitude
that is a sufficiently large disincentive for nonperformance) or (ii) the date at which performance is complete. When it is
appropriate for the Company to recognize the cost of a transaction during financial reporting periods prior to the measurement
date, for purposes of recognition of costs during those periods, the equity instrument is measured at the then-current fair values
at each of those interim financial reporting dates.
Basic and
Diluted Net Income (Loss) Per Share
We calculate basic
and diluted net income (loss) per share attributable to common stockholders using the weighted average number of common shares
outstanding during the periods presented, and adjust the amount of net income (loss) used in this calculation for cumulative preferred
stock dividends, (if any), whether they are earned or not during the period. In periods of a net loss position, basic and diluted
weighted average shares are the same. For the diluted earnings per share calculation, we adjust the weighted average number of
common shares outstanding to include dilutive stock options, warrants and shares associated with the conversion of convertible
debt and convertible preferred stock outstanding during the periods. For the three and nine months ended December 31, 2014, the
Company had cumulative, undeclared dividends that have not been accrued related to its preferred stock of $95,304 and $194,901,
respectively, which were added to the net loss on the condensed consolidated statement of operations in order to calculate net
loss per common share attributable to common stockholders.
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37
The following shows
the amounts used in computing net loss per share for the nine months ended December 31, 2014 and 2013:
Nine Months Ended December 31,
2014
2013
Net loss
$
(5,089,781
)
$
(18,123,516
)
Less:
Preferred stock beneficial conversion charge
(2,961,723
)
—
Undeclared cumulative preferred dividends
(194,901
)
—
Net loss attributable to common stockholders
$
(8,246,405
)
$
(18,123,516
)
Weighted average shares issued and outstanding
60,032,189
45,342,320
Basic and diluted net loss per share attributable to
    common stockholders
$
(0.14
)
$
(0.40
)
The following shows
the amounts used in computing net loss per share for the three months ended December 31, 2014 and 2013:
Three Months Ended December 31,
2014
2013
Net loss
$
(1,407,758
)
$
(1,840,331
)
Less:
Preferred stock beneficial conversion charge
(492,910
)
—
Undeclared cumulative preferred dividends
(95,304
)
—
Net loss attributable to common stockholders
$
(1,995,972
)
$
(1,840,331
)
Weighted average shares issued and outstanding
60,057,846
58,995,821
Basic and diluted net loss per share attributable to
    common stockholders
$
(0.03
)
$
(0.03
)
The following table
sets forth the number of shares excluded from the computation of diluted earnings per share, as their inclusion would have been
anti-dilutive:
Nine Months Ended December 31,
2014
2013
Class A convertible preferred stock
13,286,640
—
Stock options
4,680,124
9,908,272
Warrants
4,750,277
24,144,727
22,717,041
34,052,999
Segment Reporting
We currently operate
in one reportable segment.
Fair Value
Measurements
We measure fair value
based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used
to measure fair value. These tiers include the following:
Level 1:
Quoted
prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair
value hierarchy gives the highest priority to Level 1 inputs.
Level 2:
Observable
prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices
for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or
can be corroborated by observable market data for substantially the full term of the assets or liabilities. Currently we do not
have any items classified as Level 2.
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Level 3:
Unobservable
inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3
inputs.
In
determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable
inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value.
We did not elect the
fair value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value.
Therefore, material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and
payable, are reported at their historical carrying values. We have no assets or liabilities that are required to be measured at
fair value on a recurring basis as of December 31, 2014 and March 31, 2014.
Foreign Currency
Translation
We record foreign
currency transactions at the exchange rate prevailing at the date of the transaction with resultant gains and losses being included
in results of operations. Foreign currency transaction gains and losses have not been significant for any of the periods presented.
Recent Accounting
Pronouncements
In August 2014, the
FASB issued ASU 2014-15, "Presentation of Financial Statements-Going Concern". Currently, there is no guidance in U.S.
GAAP about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to
continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity's
ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing
standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every
reporting period including interim periods, (3) provide principles for considering the mitigating effect of management's
plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management's
plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment
for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in
this ASU are effective for the reporting periods beginning after December 15, 2016 and early application is permitted. Management
is currently assessing the impact the adoption of ASU 2014-15 will have on our condensed consolidated financial statements.
In May 2014, the FASB
issued ASU No. 2014-09, "Revenue from Contracts with Customers". ASU 2014-09 supersedes the revenue recognition requirements
in FASB Topic 605, "Revenue Recognition". The ASU implements a five-step process for customer contract revenue recognition
that focuses on transfer of control, as opposed to transfer of risk and rewards. The amendment also requires enhanced disclosures
regarding the nature, amount, timing and uncertainty of revenues and cash flows from contracts with customers. Other major provisions
include the capitalization and amortization of certain contract costs, ensuring the time value of money is considered in the transaction
price, and allowing estimates of variable consideration to be recognized before contingencies are resolved in certain circumstances.
The amendments in this ASU are effective for reporting periods beginning after December 15, 2016, and early adoption is prohibited.
Entities can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption.
Management is currently assessing the impact the adoption of ASU 2014-09 will have on our condensed consolidated financial statements.
Note 4. Related
Party Transactions
5% Bridge
Notes
From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes (the "5% Bridge
Notes") in the original principal amount of $1,793,000. This includes two notes in the aggregate amount of $120,000 issued
to Jerrell Shelton, the Company's Chief Executive Officer, on December 11, 2013 and January 10, 2014 as well as a note in
the amount of $100,000 issued to GBR Investments, LLC on February 3, 2014, of which Richard Rathmann, a Director of the Company,
is the manager (see Note 6).
Related Party
Notes Payable
As of December 31,
2014 and March 31, 2014, the Company had aggregate principal balances of $483,500 and $555,500, respectively, in outstanding unsecured
indebtedness owed to four related parties, including former members of the Company's board of directors, representing working
capital advances made to the Company from February 2001 through March 2005. These notes bear interest at the rate of 6% per annum
and provide for aggregate monthly principal payments which began April 1, 2006 of $2,500, and which increased by an aggregate of
$2,500 every nine months to a maximum $10,000 per month. As of December 31, 2014, the aggregate principal payments totaled $8,000
per month. Any remaining principal and accrued interest is due at maturity on various dates through March 1, 2015. Accrued interest,
which is included in related party notes payable in the accompanying condensed consolidated balance sheets, amounted to $826,200
and $802,600 as of December 31, 2014 and March 31, 2014, respectively.
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Class A Convertible
Preferred Stock
In November 2014,
both Mr. Shelton and GBR Investments, LLC participated in the Class A convertible preferred stock offering described in Note
8 and the Company issued 4,167 shares of Class A convertible preferred stock each in exchange for an aggregate amount of $100,000.
Note 5. Notes
Payable
In December 2014,
the Company issued to certain accredited investors 2014 Series Secured Promissory Notes (the "7% Bridge Notes") in
the aggregate original principal amount of $615,000. The 7% Bridge Notes accrue interest at a rate of 7% per annum. All principal
and interest under the 7% Bridge Notes will be due on July 1, 2015, however, the Company may elect to extend the maturity date
of the notes to January 1, 2016 by providing written notice to the note holders and a warrant to purchase a number of shares of
the Company's common stock equal to (a) the then outstanding principal balance of the note, divided by (b) $0.50 multiplied
by 125%. The Company may prepay the 7% Bridge Notes at any time without penalty and shall prepay the 7% Bridge Notes in an amount
equal to 25% of the net cash proceeds received by the Company during each month from the issuance of either debt or equity.
The 7% Bridge Notes
are secured by all tangible assets of the Company pursuant to the terms of that certain Security Agreement dated December 3, 2014
between the Company and the note holders. The Company is obligated to keep the collateral and all of its other personal property
and assets free and clear of all other security interests, except for certain limited exceptions.
In connection with
the issuance of the 7% Bridge Notes, the Company issued the note holders warrants to purchase 1,537,500 shares of common stock
at an exercise price of $0.50 per share. The warrants are exercisable on May 31, 2015 and expire on November 30, 2021. The relative
fair value of the warrants of $312,700 was recorded as a debt discount and is amortized to interest expense using the straight-line
method which approximated the effective interest method over the term of the notes.  During the three and nine months ended
December 31, 2014, the Company amortized $38,100 of the debt discount to interest expense for these notes.
The Company did not
pay any discounts or commissions with respect to the issuance of the 7% Bridge Notes or the warrants. In January 2015, the Company
issued an additional 7% Bridge Note in the amount of $250,000 and also repaid $113,475 of the original principal balance outstanding
as of December 31, 2014, representing 25% of the proceeds from the Class A convertible preferred stock offering during the month
of December 2014 (see Note 10).
Note 6. Convertible
Debentures Payable
5% Bridge
Notes
From December 2013
to March 2014, the Company issued to certain accredited investors unsecured convertible promissory notes in the original principal
amount of $1,793,000.
The 5% Bridge Notes
accrued interest at a rate of 5% per annum from the date of issuance through date of payment, on a non-compounding basis.
All principal and interest under the 5% Bridge Notes became due on June 30, 2014.
In connection with
the issuance of the 5% Bridge Notes, the Company granted these investors warrants to purchase 896,500 shares of common stock at
an exercise price of $0.49 per share. The warrants were exercisable on May 31, 2014 and expire on December 31, 2018. The relative
fair value of the warrants of $279,100 was recorded as a debt discount and was amortized to interest expense using the straight-line
method which approximated the effective interest method over the term of the 5% Bridge Notes.  During the nine months ended
December 31, 2014, the Company amortized $184,700 of the debt discount to interest expense for these notes.
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The agreement allowed
that in the event the Company designated and issued one or more types of equity securities while the 5% Bridge Notes were outstanding
(a "Subsequent Offering"), the Company must provide written notice to the holders of the notes and such holders had
a right to convert up to all of the principal and accrued unpaid interest on the notes into shares of such equity securities on
the same terms as the Subsequent Offering during the ten days following the provision of such notice. The conversion price for
these equity securities was 90% of the offering price for the equity securities in the Subsequent Offering. At the time of issuance,
the Company was unable to value the conversion feature of these 5% Bridge Notes given the absence of a fixed conversion rate and
the convertibility of the 5% Bridge Notes was contingent upon the completion of a Subsequent Offering. However, on May 6, 2014,
the Company completed the first convertible preferred stock offering which established a firm commitment date. This triggered the
valuation of the beneficial conversion feature of the 5% Bridge Notes which aggregated $826,900 and was recorded as interest expense
during the nine months ended December 31, 2014. Note holders with a principal amount of $1,743,000, together with $24,000 of accrued
interest, converted their 5% Bridge Notes to convertible preferred stock units (see Note 8) and one note holder was paid principal
and interest of $50,753.
Emergent Financial
Group, Inc. ("Emergent") served as the Company's placement agent in connection with the original placement of
the 5% Bridge Notes and earned a commission of 9% of the original principal balance of such notes. Debt financing costs of $151,570,
comprised primarily of the commission earned by Emergent, were amortized to interest expense using the straight-line method which
approximated the effective interest method over the term of the notes. During the nine months ended December 31, 2014, the Company
amortized $98,400 of the debt financing costs to interest expense for these notes.
Note 7. Commitments
and Contingencies
Facility and Equipment
Leases
We lease 11,900 square
feet of corporate, research and development, and warehouse facilities in Lake Forest, California under an operating lease expiring
June 30, 2015, which we do not intend to renew. We are currently exploring other facilities to meet our growing demands. The
lease agreement contains certain scheduled rent increases, which are accounted for on a straight-line basis.
Employment Agreements
We have entered into
employment agreements with certain of our officers under which payment and benefits would become payable in the event of termination
by us for any reason other than cause, or upon a change in control of our Company, or by the employee for good reason.
Consulting
and Engineering Services
Effective November 1,
2010, the Company entered into a Second Amendment to Master Consulting and Engineering Services Agreement (the "Second Amendment")
with KLATU Networks, LLC ("KLATU"), which amended the Master Consulting and Engineering Services Agreement between
the parties dated as of October 9, 2007 (the "Agreement"), as amended by the First Amendment to Master Consulting
and Engineering Services Agreement between the parties dated as of April 23, 2009. The parties entered into the Second Amendment
to clarify their mutual intent and understanding that all license rights granted to the Company under the Agreement, as amended,
shall survive any termination or expiration of the Agreement. In addition, in recognition that the Company has paid KLATU less
than the market rate for comparable services, the Second Amendment provides that if the Company terminates the Agreement without
cause, which the Company has no intention of doing, or liquidates, KLATU shall be entitled to receive additional consideration
for its services provided from the commencement of the Agreement through such date of termination, which additional compensation
shall not be less than $2 million plus two times the "cost of work" (as defined in the Agreement). Any such additional
compensation would be payable in three equal installments within 12 months following the date the amount of such additional compensation
is determined. If KLATU terminates this agreement, no such payments are payable.
The agreement provides
for one year terms ending on December 31 of each year and automatically renews unless otherwise terminated.
Litigation
The Company may become
a party to product litigation in the normal course of business. The Company accrues for open claims based on its historical experience
and available insurance coverage. In the opinion of management, there are no legal matters involving the Company that would have
a material adverse effect upon the Company's consolidated financial condition or results of operations.
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41
Indemnities
and Guarantees
The Company has made
certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party, in relation
to certain actions or transactions. The guarantees and indemnities do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for
these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed
consolidated balance sheets.
The Company indemnifies
its directors, officers, employees and agents, as permitted under the laws of the States of California and Nevada. In connection
with its facility leases, the Company has indemnified its lessors for certain claims arising from the use of the facilities. The
duration of the guarantees and indemnities varies, and is generally tied to the life of the agreement.
Note 8. Stockholders'
Equity
Authorized
Stock
The Company has 250,000,000
authorized shares of common stock with a par value of $0.001 per share. In September 2011, our stockholders approved an amendment
to the Amended and Restated Articles of Incorporation to authorize a class of undesignated or "blank check" preferred
stock, consisting of 2,500,000 shares at $0.001 par value per share. Shares of preferred stock may be issued in one or more series,
with such rights, preferences, privileges and restrictions to be fixed by the Company's board of directors.
Designation
of Class A Convertible Preferred Stock
On May 2, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation which designated 800,000 shares of
the Company's previously authorized preferred stock, par value $0.001, as Class A Convertible Preferred Stock ("Preferred
Stock").
The rights, preferences,
and privileges of the Preferred Stock are summarized as follows:
·
Dividends shall accrue on shares of Preferred Stock at the rate of $0.96 per annum. Such dividends shall accrue day-to-day, shall be cumulative, and shall be payable on when, as, and if declared by the Board of Directors of the Company.
·
In the event of any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Preferred Stock then outstanding shall be entitled to receive a liquidation preference payment equal to $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus any accrued dividends, but unpaid thereon, whether or not declared, together with any other dividends declared but unpaid thereon.
·
Shares of Preferred Stock shall vote together with the common stock on an as-converted basis. Holders of the Preferred Stock will have thirty votes per share of Preferred Stock held compared to one vote for each share of the Company's common stock.
·
At any time after September 1, 2014, shares of Preferred Stock shall be convertible into thirty shares of common stock. In addition, accrued but unpaid dividends on the Preferred Stock, whether or not declared, will also be convertible into common stock after September 1, 2014 at the rate of one share for each $0.40 of dividend. Such conversion is subject to adjustment in the event of any stock split or combination, certain dividends and distributions, and any reorganization, recapitalization, reclassification, consolidation, or merger involving the Company.
·
Shares of the Preferred Stock shall be subject to redemption by the Company at any time on or after January 15, 2017, upon payment of $12.00 per share (subject to appropriate adjustment in the event of a stock dividend, split, combination, or other similar recapitalization) plus all accrued but unpaid dividends, whether or not declared, thereon.
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Issuance
of Class A Convertible Preferred Stock
In May 2014, the Company
entered into definitive agreements for a private placement of its securities to certain institutional and accredited investors
(the "Investors") pursuant to certain subscription agreements and elections to convert between the Company and the
Investors. Through December 31, 2014, aggregate gross cash proceeds of $3.4 million (approximately $2.8 million after offering
costs) were collected in exchange for the issuance of 279,280 shares of our Class A Convertible Preferred Stock, and warrants,
exercisable for five years, to purchase up to a total of 2,234,240 shares of our common stock at an exercise price of $0.50
per share. The Company intends to use the net proceeds for working capital purposes.
Pursuant to the subscription
agreements, the Company issued shares of a newly established Class A Convertible Preferred Stock and warrants to purchase common
stock of Cryoport. The shares and warrants were issued as a unit (a "Unit") consisting of (i) one share of Class A
Convertible Preferred Stock and (ii) one warrant to purchase eight (8) shares of the Company's common stock at an exercise
price of $0.50 per share, which were immediately exercisable and may be exercised at any time on or before March 31, 2019.
Pursuant to the terms
of the 5% Bridge Notes issued by the Company between December 2013 and March 2014 with a total original principal amount of $1,793,000,
the issuance of the Units to Investors at $12.00 per Unit entitled the holders of the 5% Bridge Notes to convert up to the entire
principal and accrued interest amount under the 5% Bridge Notes into Units at a rate of $10.80 per Unit. Through December 31, 2014,
5% Bridge Note holders totaling $1,743,000
in original principal sum elected to convert their 5% Bridge Notes, including
accrued interest of $24,000, for Units in exchange for the issuance of 163,608 shares of our Class A Convertible Preferred Stock
and warrants to purchase up to 1,308,864 shares of our common stock at an exercise price of $0.50 per share. Two of the 5% Bridge
Note holders that executed subscription agreements to convert 5% Bridge Notes in the aggregate principal amount of $220,000 are
affiliates of the Company – Jerrell W. Shelton, the Company's Chief Executive Officer, and GBR Investments, LLC, which
is managed by Richard Rathmann, a Director and Chairman of the Board of Directors of the Company (collectively, the "Affiliates").
The fair value of
the beneficial conversion feature of the convertible preferred stock issuance and the relative fair value of the warrants issued,
aggregated $3.0 million through December 31, 2014. This amount was accreted to accumulated deficit and additional paid-in capital
during the nine months ended December 31, 2014.
Emergent served as
the Company's placement agent in this transaction and received, with respect to the gross proceeds received from Investors
who converted their 5% Bridge Notes into Units (not including those conversions by the Affiliates), a commission of 3% and a non-accountable
finance fee of 1% of such proceeds, and with respect to gross proceeds received from all other Investors, a commission of 10% and
a non-accountable finance fee of 3% of the aggregate gross proceeds received from such Investors, plus reimbursement of legal expenses
of up to $40,000. Emergent was issued a warrant to purchase three shares of common stock at an exercise price of $0.50 per share
for each Unit issued in this transaction. The Company and Emergent have agreed that the offering of Units to new Investors will
conclude on February 4, 2015.
As of December 31,
2014, 442,888 shares of Class A Convertible Preferred Stock and 3,543,104 of the related warrants were outstanding for Investors
and 1,241,592 warrants were outstanding for Emergent in connection with the Class A Convertible Preferred Stock offering and the
5% Bridge Note conversions.
No dividends have
been declared as of December 31, 2014; however, the cumulative preferred stock dividend of $194,901 is included in the net loss
attributable to common stockholders (see Note 3) and the liquidation preference.
Common Stock
Reserved for Future Issuance
As of December 31,
2014, approximately 101.8 million shares of common stock were issuable upon conversion or exercise of rights granted under
prior financing arrangements, preferred stock, stock options and warrants, as follows:
Class A convertible preferred stock converted to common stock
13,286,640
Exercise of stock options
21,333,132
Exercise of warrants
67,183,147
Total shares of common stock reserved for future issuances
101,802,919
In August 2014, we
issued 20,000 shares of restricted common stock to a consultant in exchange for services. The Company recognized $9,000 in expense
related to these shares for the nine months ended December 31, 2014.
F-
43
Note 9. Stock-Based
Compensation
Warrant Activity
We typically issue
warrants to purchase shares of our common stock to investors as part of a financing transaction or in connection with services
rendered by placement agents and consultants. Our outstanding warrants expire on varying dates through November 2021. A summary
of warrant activity is as follows:
Number of
Shares
Weighted-
Average
Exercise
Price/Share
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (1)
Outstanding — March 31, 2014
61,194,343
$
0.84
Issued
6,322,196
0.50
Exercised
(50,000
)
0.20
Cancelled
—
—
Expired
(283,392
)
2.85
Outstanding — December 31, 2014
67,183,147
$
0.80
2.5
$
2,074,500
Vested (exercisable) — December 31, 2014
65,565,647
$
0.80
2.4
$
2,074,500
(1) Aggregate intrinsic
value represents the difference between the exercise price of the warrant and the closing market price of our common stock on December
31, 2014, which was $0.44 per share.
The fair value of
each warrant grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions for the
nine months ended December 31, 2014:
Expected life (years)
4.3 – 7.0
Risk-free interest rate
1.2% - 2.0%
Volatility
116.5% – 125.3%
Dividend yield
0%
Stock
Options
We have three stock
incentive plans: the 2002 Stock Incentive Plan, or the 2002 Plan, the 2009 Stock Incentive Plan, or the 2009 Plan and the 2011
Stock Incentive Plan, or the 2011 Plan (collectively, the "Plans"). The 2002 Plan authorizes the grant of incentive
awards, including stock options, for the purchase of up to a total of 500,000 shares and has no shares available for future
issuances as the 2002 Plan has expired. Subsequent to the adoption of the 2011 Plan, no new options have been granted pursuant
the 2009 Plan or 2002 Plan. In September 2009, the stockholders approved the issuance of up to 1,200,000 shares of common
stock available for issuance under the 2009 Plan and as of December 31, 2014, the Company has 303,768 shares available for future
awards under the 2009 Plan. In September 2011, the stockholders authorized the issuance of up to 2,300,000 shares of the Company's
common stock. On September 13, 2012, the stockholders approved an increase to the number of shares of the Company's
common stock available for issuance by 3,000,000 shares. On September 6, 2013 the stockholders approved an increase to the
number of shares of the Company's common stock available for issuance by 7,100,000 shares. On August 29, 2014 the stockholders
approved an increase to the number of shares of the Company's common stock available for issuance by 1,500,000 shares. As
of December 31, 2014, there were 2,585,985 incentive awards available for grant under the 2011 Plan. In December 2014, 3,150,000
options were granted outside the plan to Jerrell Shelton, the Company's Chief Executive Officer.
We granted stock options
at exercise prices equal to or greater than the quoted market price of our common stock on the grant date. The fair value of each
option grant was estimated on the date of grant using Black-Scholes with the following weighted average assumptions for the nine
months ended December 31, 2014:
Expected life (years)
1.5 – 6.1
Risk-free interest rate
0.31% - 2.03%
Volatility
102.7% – 127.7%
Dividend yield
0%
F-
44
The expected option
life assumption is estimated based on the simplified method. Accordingly, the Company has utilized the average of the contractual
term of the options and the weighted average vesting period for all options to calculate the expected option term. The risk-free
interest rate assumption is based upon observed interest rates appropriate for the expected term of our employee stock options.
The expected volatility is based on the historical volatility of our stock commensurate with the expected life of the stock-based
award. We do not anticipate paying dividends on the common stock in the foreseeable future.
We recognize stock-based
compensation cost over the vesting period using the straight-line single option method. Stock-based compensation expense is recognized
only for those awards that are ultimately expected to vest. An estimated forfeiture rate has been applied to unvested awards for
the purpose of calculating compensation cost. The estimated forfeiture rate of 0% per year is based on the historical forfeiture
activity of unvested stock options. These estimates are revised, if necessary, in future periods if actual forfeitures differ from
the estimates. Changes in forfeiture estimates impact compensation cost in the period in which the change in estimate occurs. The
summary of stock option activity is as follows:
Number of
Shares
Weighted-
Average
Exercise
Price/Share
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (1)
Outstanding — March 31, 2014
11,894,205
$
0.35
Granted (weighted-average fair value of $0.35 per share)
9,691,388
0.41
Exercised
(7,892
)
0.27
Forfeited
(222,369
)
0.30
Expired
(22,200
)
2.29
Outstanding — December 31, 2014
21,333,132
$
0.38
8.5
$
2,047,600
Vested (exercisable) — December 31, 2014
7,177,674
$
0.39
6.7
$
978,400
Unvested (unexercisable) — December 31, 2014
14,155,458
$
0.37
9.4
$
1,069,200
(1)
Aggregate intrinsic value represents the difference between the exercise price of the option and
the closing market price of our common stock on December 31, 2014, which was $0.44 per share.
As of December 31,
2014, there was unrecognized compensation expense of $4.4 million related to unvested stock options, which we expect to recognize
over a weighted average period of 3.5 years.
Note 10. Subsequent
Events
In January 2015, the
Company issued an accredited investor a 7% Bridge Note in the aggregate original principal amount of $250,000. In connection with
the issuance of such note, the Company issued the noteholder warrants to purchase 625,000 shares of common stock at an exercise
price of $0.50 per share. Through January 2015, notes in the aggregate principal amount of $865,000 and warrants to purchase 2,162,500
shares of common stock have been issued. In January 2015, the Company repaid $113,475 of the original principal amount outstanding
under the 7% Bridge Notes at December 31, 2014.
On February 4, 2015,
The Company issued additional shares of the Class A Convertible Preferred Stock to Investors. Gross proceeds of $142,350 (approximately
$123,800 after offering costs) were collected in exchange for the issuance of 11,862 share of our Class A Convertible Preferred
Stock, and warrants, exercisable immediately through March 31, 2019, to purchase up to a total of 94,896 share of our common stock
at an exercise price of $0.50 per share. The Company intends to use the net proceeds for working capital purposes.
F-
45
3,409,091 Shares of
Common Stock and Warrants
CRYOPORT, INC.
PROSPECTUS
Until _____________,
2015 (25 days after the commencement of this offering), all dealers that buy, sell or trade shares of our common stock, whether
or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the
obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
You should rely only
on the information contained or incorporated by reference to this prospectus in deciding whether to purchase our common stock.
We have not authorized anyone to provide you with information different from that contained or incorporated by reference to this
prospectus. Under no circumstances should the delivery to you of this prospectus or any sale made pursuant to this prospectus create
any implication that the information contained in this prospectus is correct as of any time after the date of this prospectus.
To the extent that any facts or events arising after the date of this prospectus, individually or in the aggregate, represent a
fundamental change in the information presented in this prospectus, this prospectus will be updated to the extent required by law.
The date of this prospectus
is _________, 2015.
Aegis Capital Corp
1
PART II
INFORMATION NOT REQUIRED
IN THE PROSPECTUS
ITEM 13.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table
sets forth an estimate of the costs and expenses payable by us in connection with the offering described in this registration statement.
All of the amounts shown are estimates except the SEC registration fee:
SEC Registration Fee
$
_______
Accounting Fees and Expenses
$
35,000.00
*
Printing and Engraving Expenses
$
20,000.00
*
Blue Sky Filing Fees
$
10,000.00
*
Legal Fees and Expenses
$
125,000.00
*
Miscellaneous
$
_____.00
*
Total
$
200,000.00
*
Estimated
ITEM 14
.
INDEMNIFICATION OF
OFFICERS
AND
DIRECTORS
Under the Nevada Revised
Statutes and our Amended and Restated Articles of Incorporation, as amended, our directors will have no personal liability to us
or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his "duty
of care." This provision does not apply to the directors' (i) acts or omissions that involve intentional misconduct
or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests
of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval
of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless
disregard for the director's duty to the corporation or its stockholders in circumstances in which the director was aware,
or should have been aware, in the ordinary course of performing a director's duties, of a risk of serious injury to the corporation
or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication
of the director's duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution,
stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance
of duties, including gross negligence.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
ITEM 15.
RECENT SALES OF UNREGISTERED SECURITIES
The following is a
summary of transactions by Cryoport during the past three years involving the issuance and sale of Cryoport's securities
that were not registered under the Securities Act. Unless otherwise indicated, the issuance of the securities in the transactions
below were deemed to be exempt from registration under the Securities Act by virtue of the exemption under Section 4(2) of
the Securities Act as a transaction by an issuer not involving a public offering, or by virtue of the exemption under Rule 506
of the Securities Act and Regulation D promulgated thereunder.
On March 6,
2015, the Company issued a convertible promissory note (the "Exchange Note"), effective February 20, 2015, in
the aggregate original amount of $35,761, which is convertible into shares of the Company's common stock in an amount
equal to the principal and accrued interest outstanding under a promissory note issued in 2005.   The amended
and restated note was issued to an accredited investor in exchange for all of the principal and accrued interest
outstanding under a promissory note issued in 2005. In connection with the Exchange Note, on March 2, 2015, the Company
issued a warrant to purchase 2,235 shares of the Company's common stock at an exercise price of $4.00 to an accredited
investor in exchange for all of the principal and accrued interest outstanding under a promissory note issued in 2005.
2
On March 6,
2015, the Company issued amended and restated convertible promissory notes (the "Amended and Restated Note"),
effective March 2, 2015, in the aggregate original amounts of $448,164, $266,686 and $208,941 which are convertible into
shares of the Company's common stock based on the outstanding principal at the time of a Qualified Offering (as defined
therein).  The amended and restated notes were issued to  three accredited investors as an amendment and restatement of
promissory notes issued in 2005. In connection with the Amended and Restated Notes, the Company issued warrants to purchase
an aggregate of 117,975 shares of the Company's common stock at an exercise price of $4.00 to the accredited investors,
a part of which was issued as compensation for fees and other expenses incurred by the accredited investors in connection with
the Amended and Restated Notes.
Between February and
March 12, 2015, the company conducted a private placement pursuant to which the Company sold and issued an aggregate of 26,134
shares of Class B Convertible Preferred Stock and warrants to purchase 26,134 shares of common stock at $12.00 per unit, for gross
proceeds of $313,600. Emergent Financial Group, Inc. served as the Company's placement agent in this transaction and received
a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds received from the investors, plus reimbursement
of up to $5,000 of legal expenses. Emergent Financial Group, Inc. will also be issued a warrant to purchase three shares of common
stock at an exercise price of $4.00 per share for each eight issued in this transaction.
During December 2014,
we issued 2014 Series Secured Promissory Notes (the "7% Bridge Notes") in the aggregate original principal amount of
$615,000. The 7% Bridge Notes accrue interest at a rate of 7% per annum. All principal and interest is due on July 1, 2015 unless
we elect to extend the maturity date to January 1, 2016 by providing written notice to the note holders and a warrant to purchase
a number of shares of common stock equal to (a) the then outstanding principal balance of the note, divided by (b) $4.00 multiplied
by 125%. In connection with the issuance of the notes, we issued the note holders warrants to purchase 192,188 shares of common
stock at an exercise price of $4.00 per share. The warrants are exercisable on May 31, 2015 and expire on November 20, 2021.
In August 2014, we
issued 2,500 shares of restricted common stock to a consultant in exchange for services. The Company recognized $9,000 in expense
related to these shares for the three and nine months ended December 31, 2014.
Between May 2014 and
February 2015, the Company conducted a private placement pursuant to which the Company sold and issued an aggregate of 291,142
shares of Class A Convertible Preferred Stock and warrants to purchase 291,142 shares of common stock, at $12.00 per unit, for
gross proceeds of $3.5 million. In addition, the Company issued an aggregate of 163,608 shares of Class A Convertible Preferred
Stock and warrants to purchase 163,608 shares of common stock of the Company in exchange for the conversion of the 5% Bridge Notes
with an original principal and accrued interest amount of $1,766,997. Emergent Financial Group, Inc. served as the Company's
placement agent in this transaction and received, with respect to the gross proceeds received from investors who converted their
5% Bridge Notes, a commission of 3% and a non-accountable finance fee of 1% of such proceeds, and with respect to gross proceeds
received from all other investors, a commission of 10% and a non-accountable finance fee of 3% of the aggregate gross proceeds
received from such investors, plus reimbursement of legal expenses of up to $40,000. Emergent Financial Group, Inc. will also be
issued a warrant to purchase three shares of common stock at an exercise price of $4.00 per share for each eight issued in this
transaction.
In the fourth quarter
of fiscal year 2014, the Company issued to certain accredited investors 5% Bridge Notes in the original principal amount of $1,352,000,
including a note in the amount of $50,000 issued to Jerrell Shelton, the Company's Chief Executive Officer as well as a note
in the amount of $100,000 issued to GBR Investments, LLC, of which Richard Rathmann, a Director of the Company, is the manager.
All principal and interest under the 5% Bridge Notes was due on June 30, 2014. In connection therewith, the Company also granted
such accredited investors warrants to purchase 84,500 shares of common stock at an exercise price of $3.92 per share. The warrants
are exercisable on May 31, 2014 and expire on December 31, 2018.
In December 2013,
the Company issued to certain accredited investors 5% Bridge Notes in the original principal amount of $441,000, including a note
in the amount of $70,000 issued to Jerrell Shelton, the Company's Chief Executive Officer. In connection therewith, the Company
also granted such accredited investors warrants to purchase 27,563 shares of common stock at an exercise price of $3.92 per share.
The warrants are exercisable on May 31, 2014 and expire on December 31, 2018. Emergent Financial Group, Inc. served as the Company's
placement agent in connection with the placement of the 5% Bridge Notes and earned a commission of 9% of the original principal
balance of such notes, excluding the note issued to Jerrell Shelton, or $33,390 at the time of the original issuance of such notes.
On September 27, 2013,
September 30, October 2, and October 3, 2013, the Company issued 2,579,501 units (the "
Units
") at a price of
$1.60 per Unit, with each Unit consisting of (i) one share of common stock of the Company and (ii) one warrant to purchase one
share of common stock of the Company at an exercise price of $2.96 per share in exchange for the retirement of $4,127,202 of outstanding
principal and interest under the Bridge Notes. The warrants are exercisable beginning on March 31, 2014 and have a term of five
years from date of issuance. The aggregate amount converted includes $101,945 and $202,740 of outstanding principal and interest
under Notes respectively held by Richard G. Rathmann, a director, and GBR Investments, LLC, in which Mr. Rathmann is the manager.
Emergent Financial Group, Inc. served as the Company's placement agent in connection with the original placement of the Bridge
Notes and was issued a warrant to purchase 238,907 shares of common stock of the Company at an exercise price of $1.60 per share
in connection with the conversion of such notes. Emergent Financial Group, Inc. did not receive any compensation with respect to
the Bridge Notes issued to Richard G. Rathmann or GBR Investments, LLC or the conversion of such Bridge Notes.
3
On July 12, 2013 and
August 12, 2013, GBR Investments, LLC, invested $100,000 in the Bridge Notes and also received a warrant to purchase 50,000 and
43,103 shares of common stock, respectively, at an exercise price of $2.00 and $2.32 per share, respectively. The terms were set
and offered by the Company to certain accredited investors prior to GBR's participation. Richard Rathmann, a member of the
Board of Directors of the Company, is the Manager of GBR investments, LLC and is considered an indirect beneficial owner of these
securities.
During June 2013,
the Company issued warrants to purchase 131,579 shares of the Company's common stock at an exercise price of $1.52 per share
and a five year life to accredited investors in connection with the issuance of certain Bridge Notes in the aggregate amount of
$200,000.
On June 28, 2013,
the Company granted options to three officers of the Company, Jerrell Shelton, Chief Executive Officer, Robert Stefanovich, Chief
Financial Officer and Steve Leatherman, Chief Commercial Officer to purchase 487,813 shares, 104,877 shares and 100,882 shares,
respectively, of the Company's common stock at an exercise price equal to the closing price of the Company's common
stock, or $2.16 per share. These options were granted outside of the Company's incentive plans (see Note 7 to the condensed
consolidated financial statements).
In the fourth quarter
of fiscal year 2013, the Company issued to certain accredited investors unsecured convertible promissory notes (the "Bridge
Notes") in the original principal amount of $1,294,500. The Bridge Notes accrue interest at a rate of 15% per annum from
date of issuance until January 31, 2013 and at a rate of 5% per annum from February 1, 2013 through the date of payment, in each
case on a non-compounding basis. All principal and interest under the Bridge Notes will be due on December 31, 2013. In the event
the Company designated and issued preferred stock while the Bridge Notes were outstanding, the Bridge Notes were convertible into
shares of such preferred stock at a conversion rate equal to the price per share paid to the Company in connection with the issuance
of such preferred stock at the option of the holder of the Bridge Notes. Effective on April 19, 2013, the Company amended the Bridge
Notes whereby in the event that the Company issues one or more types of equity securities (a "Transaction") before
the maturity of the Bridge Notes, the holder may elect to convert all or a portion of the principal and accrued interest into shares
of such equity securities issued in a Transaction at a conversion rate equal to the price per share paid to the Company in connection
with the issuances. The Company is required to notify the holder of a Transaction within 10 days of each Transaction and the holder
has the option until the later of (a) ten (10) days after such notices or (b) December 15, 2013 to elect in writing to convert.
In November 2012,
the Company awarded the Company's new Chief Executive Officer an option to purchase 125,000 shares of the Company's
common stock with an exercise price of $1.60 per share. The option vests in six equal monthly installments.
In April 2012, the
Company issued a warrant to purchase 3,750 shares of the Company's common stock at an exercise price of $4.00 per share to
a consultant for services rendered to the Company.
In February and March
2012, the Company conducted a private placement pursuant to which the Company sold and issued an aggregate of 1,184,694 shares
of common stock at a price of $4.40 per share and common stock purchase warrants to acquire 1,184,694 shares of common stock at
an exercise price of $5.52 per share for gross proceeds of $5,212,655. The Company also issued warrants to purchase an aggregate
of 35,000 shares of the Company's common stock at an exercise price of $5.52 per share to our convertible note holders in
connection with a consent and waiver with respect to defaults that would have been triggered by this private placement.
During the quarter
ended December 31, 2011, the Company issued 18,750 shares of common stock to two accredited investors upon their cash exercise
of warrants issued in conjunction with a private placement financing completed during the previous fiscal year. We received an
aggregate of $115,500 from the exercise of such warrants.
On December 5,
2011, the Company issued a warrant to purchase 19,481 shares of the Company's common stock at an exercise price of $6.16
to a consultant for services to be rendered over two years. The Company recognized $3,947 in expense related to these warrants
for the three and nine months ended December 31, 2011.
During the quarter
ended September 30, 2011, the Company issued 52,619 shares of common stock to five accredited investors upon their cash exercise
of warrants issued in conjunction with a private placement financing completed during the previous fiscal year. We received an
aggregate of $324,133 from the exercise of such warrants.
On July 1, 2011,
the Company issued a warrant to purchase 1,250 shares of the Company's common stock at an exercise price of $9.60 to a consultant
for services to be rendered over three years. The Company recognized $8,297 in expense related to these warrants for the three
and six months ended September 30, 2011.
4
ITEM 16. EXHIBITS
Exhibit
No.
Description
3.1
Amended and Restated Articles of Incorporation of the Company, as amended.  Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2012.
3.2
Amended and Restated Bylaws of the Company.  Incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K dated October 23, 2012.
3.3
Cryoport Systems, Inc. 2002 Stock Incentive Plan adopted by the Board of Directors on October 1, 2002.  Incorporated by reference to Exhibit 3.13 to the Company's Registration Statement on Form 10-SB/A2 dated January 26, 2006.
3.4
Certificate of Designation.  Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated May 2, 2014.
3.5
Certificate of Designation of Class B Preferred Stock. Incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated February 20, 2015.
4.1
Form of Common Stock
        Purchase Warrant dated September 28, 2007. Incorporated by reference to Cryoport's Registration Statement on Form SB-2 dated
        November 9, 2007.
4.2
Common Stock Purchase Warrant dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008.
4.3
Common Stock Purchase Warrant dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008.
4.4
Form of Warrant and Warrant Certificate in connection with the February 25, 2010 public offering. Incorporated by reference to Cryoport's Amendment No. 5 to Form S-1/A Registration Statement dated February 9, 2010.
4.5
Form of Securities Purchase Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated October 19, 2010.
4.6
Form of First Amendment to Security Purchase Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated October 19, 2010.
4.7
Form of Securities Purchase Agreement (Continuation of the Placement) in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated October 19, 2010.
4.8
Registration Rights Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated October 19, 2010.
4.9
Form of Joinder to Registration Rights Agreement in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated October 19, 2010.
4.10
Form of Securities Purchase Agreement in connection with the February 2011 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated April 1, 2011.
4.11
Form of Registration Rights Agreement in connection with the February 2011 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1 dated April 1, 2011.
4.12
Form of Warrant in connection with the August to October 2010 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1/A dated April 22, 2011.
4.13
Form of Warrant in connection with the February 2011 private placement. Incorporated by reference to Cryoport's Registration Statement on Form S-1/A dated April 22, 2011.
4.14
Form of Securities Purchase Agreement. Incorporated by reference to Cryoport's Current Report on Form 8-K filed with the SEC on February 24, 2012.
4.15
Form of Registration Rights Agreement. Incorporated by reference to Cryoport's Current Report on Form 8-K filed with the SEC on February 24, 2012.
4.16
Form of Warrant. Incorporated by reference to Cryoport's Current Report on Form 8-K filed with the SEC on February 24, 2012.
4.17
Warrant issued to Rodman & Renshaw, LLC in connection with the February 25, 2010 public offering. Incorporated by reference to CryoPort's Registration Statement on Form S-1 dated October 19, 2010.
4.18
Form of Warrant issued with Convertible Promissory Notes.  Incorporated by reference to Exhibit 4.20 of Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013.
4.19
Form of Warrant issued upon Conversion of Convertible Promissory Notes.  Incorporated by reference to Exhibit 4.21 of Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013.
4.20
Form of Warrant Issued to Placement Agents.  Incorporated by reference to Exhibit 4.22 of Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013.
4.21
Form of Warrant issued with Convertible Promissory Notes (5% Bridge Notes).  Incorporated by reference to Exhibit 4.23 of Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended December 31, 2013.
4.22
Form of Warrant issued in connection with the May 2014 private placement. Incorporated by reference to Exhibit 4.24 of Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2014.
4.23†
Form of Warrant and Warrant Certificate to be issued in connection with the offering contemplated by this Registration Statement on Form S-1.
4.24
Warrant to Purchase Common Stock. Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated December 9, 2014.
4.25
Warrant to Purchase Common Stock. Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated February 20, 2015.
4.26
Form of Warrant issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated March 9, 2015.
4.27
Form of March Warrant issued in connection with the Investment Agreement. Incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated March 9, 2015.
4.28
Form of March Fee Warrant issued in connection with the Investment Agreement. Incorporated by reference to Exhibit 4.3 of the Company's Current Report on Form 8-K dated March 9, 2015.
5.1+
Legal Opinion of Snell & Wilmer L.L.P.
10.1.1
Commercial Promissory Note between Cryoport, Inc. and D. Petreccia executed on August 26, 2005. Incorporated by reference to Cryoport's Registration Statement on Form 10-SB/A4 dated February 23, 2006.
10.1.2
Commercial Promissory Note between Cryoport, Inc. and J. Dell executed on September 1, 2005. Incorporated by reference to Cryoport's Registration Statement on Form 10-SB/A4 dated February 23, 2006.
10.1.3
Commercial Promissory Note between Cryoport, Inc. and P. Mullens executed on September 2, 2005. Incorporated by reference to Cryoport's Registration Statement on Form 10-SB/A4 dated February 23, 2006.
10.1.4
Commercial Promissory Note between Cryoport, Inc. and R. Takahashi executed on August 25, 2005. Incorporated by reference to Cryoport's Registration Statement on Form 10-SB/A4 dated February 23, 2006.
10.2.1
Lease Agreement dated June 26, 2007 between CryoPort, Inc. and Viking Investors—Barents Sea LLC. Incorporated by reference to CryoPort's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2007 and referred to as Exhibit 10.5
10.2.2
Second Amendment To Lease: Renewal dated August 24, 2009, between CryoPort, Inc. and Viking Inventors-Barents Sea LLC. Incorporated by reference to Cryoport's Amendment No. 1 to Form S-1/A Registration Statement dated January 12, 2010.
10.2.3
Third Amendment to Lease: Renewal dated June 8, 2010 between Viking Investors Barents Sea, LLC. Incorporated by reference to Exhibit 10.5.3 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2013.
10.3
Securities Purchase Agreement dated September 27, 2007. Incorporated by reference to Cryoport's Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.6.
10.4
Registration Rights Agreement dated September 27, 2007. Incorporated by reference to Cryoport's Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.7.
10.5
Security Agreement dated September 27, 2007. Incorporated by reference to Cryoport's Registration Statement on Form SB-2 dated November 9, 2007 and referred to as Exhibit 10.8.
10.6
Securities Purchase Agreement dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.10.
10.7
Registration Rights Agreement dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.11.
10.8
Waiver dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.12.
10.9
Security Agreement dated May 30, 2008. Incorporated by reference to Cryoport's Current Report on Form 8-K dated June 9, 2008 and referred to as Exhibit 10.13.
10.10
Consent, Waiver and Agreement with Enable Growth Partners LP, Enable Opportunity Partners LP, Pierce Diversified Strategy Master Fund LLC, Ena, BridgePointe Master Fund Ltd. and Cryoport Inc. and its subsidiary dated July 30, 2009. Incorporated by reference to Cryoport's Current Report on Form 8-K dated July 29, 2009 and referred to as Exhibit 10.15.
10.11.1
Master Consulting and Engineering Services Agreement dated October 9, 2007 with KLATU Networks, LLC and CryoPort, Inc. Incorporated by reference to Cryoport, Inc.'s Registration Statement on Form S-8 dated March 25, 2009 and referred to as Exhibit 10.2.
10.11.2
First Amendment to Master Consulting and Engineering Services Agreement dated as of April 23, 2009, between CryoPort, Inc. and KLATU Networks, LLC. Incorporated by reference to Cryoport's Registration Statement on Form S-1/A dated December 17, 2010 and referred to as Exhibit 10.32.
10.11.3
Second Amendment to Master Consulting and Engineering Services Agreement dated as of November 1, 2010, between CryoPort, Inc. and KLATU Networks, LLC. Incorporated by reference to Cryoport's Registration Statement on Form S-1/A dated December 17, 2010 and referred to as Exhibit 10.33.
10.12
Stock Option Agreement ISO under the 2002 Stock Incentive Plan of Cryoport Systems, Inc. Incorporated by reference to Exhibit 3.14 to the Company's Registration Statement on Form 10-SB/A2 dated January 26, 2006.
10.13
Stock Option Agreement NSO under the 2002 Stock Incentive Plan of Cryoport Systems, Inc. Incorporated by reference to Exhibit 3.15 to the Company's Registration Statement on Form 10-SB/A2 dated January 26, 2006.
10.14
2009 Stock Incentive Plan of the Company.  Incorporated by reference to Exhibit 10.21 of the Company's Current Report on Form 8-K dated October 15, 2009 and referred to as Exhibit 10.21.
10.15
Form Incentive Stock Option Award Agreement under the 2009 Stock Incentive Plan of the Company. Incorporated by reference to Exhibit 10.22 of the Company's Current Report on Form 8-K dated October 9, 2009.
10.16
Form of Non-Qualified Stock Option Award Agreement under the 2009 Stock Incentive Plan of the Company. Incorporated by reference to Exhibit 10.25 of the Company's Registration Statement on Form S-8 dated April 27, 2010.
10.17
2011 Stock Incentive Plan (as amended and
    restated).
Incorporated by reference to Exhibit B of the Company's Definitive Proxy Statement on Schedule 14A
    filed with the SEC on July 30, 2012.
10.18
Form of Stock Option Award Agreement. Incorporated by reference to Exhibit 10.37 to Cryoport's Current Report on Form 8-K filed with the SEC on September 27, 2011.
10.19
Form of Non-Qualified Stock Option Award Agreement. Incorporated by reference to Exhibit 10.38 to Cryoport's Current Report on Form 8-K filed with the SEC on September 27, 2011.
10.20
Form of Convertible Promissory Note. Incorporated by reference to Exhibit 10.24 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2013.
10.21
Form of Amendment to Convertible Promissory Note. Incorporated by reference to Exhibit 10.25 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2013.
10.22
Form of Convertible Promissory Note. Incorporated by reference to Exhibit 10.26 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2013.
10.23*
Employment Agreement between the Company and Jerrell Shelton.  Incorporated by reference to the Company's Current Report on Form 8-K filed on November 6, 2012 and referred to as Exhibit 10.45.
10.24*
Stock Option Agreement dated November 5, 2012 between the Company and Jerrell Shelton. Incorporated by reference to Exhibit 10.28 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2013.
10.25#
Master Agreement between the Company and Federal Express Corporation dated January 1, 2013. Incorporated by reference to the Company's Current Report on Form 8-K filed on January 8, 2013 and referred to as Exhibit 10.1.
10.26*
Employment Agreement dated June 28, 2013 with Jerrell Shelton.  Incorporated by reference to Exhibit 10.30 to Cryoport's Current Report on Form 8-K filed with the SEC on July 3, 2013.
10.27
Form of Convertible Promissory Notes issued with Warrants.  Incorporated by reference to Exhibit 10.31 to Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013.
10.28
Form of Letter of Tender and Exchange.  Incorporated by reference to Exhibit 10.32 to Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2013.
10.29
Form of Convertible Promissory Note (5% Bridge Note) issued with Warrants.  Incorporated by reference to Exhibit 10.33 to Cryoport's Quarterly Report on Form 10-Q for the Quarter Ended December 31, 2013.
10.30
Form of Subscription Agreement in connection with the May 2014 private placement. Incorporated by reference to Exhibit 10.34 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2014.
10.31
Form of Election to Convert in connection with the May 2014 private placement. Incorporated by reference to Exhibit 10.35 to Cryoport's Annual Report on Form 10-K filed with the SEC on June 25, 2014.
10.32
Form of Indemnification Agreement. Incorporated by reference to Exhibit 10.1 to Cryoport's Current Report on Form 8-K filed with the SEC on July 16, 2014.
10.33
Subscription Agreement and Letter of Investment Intent. Incorporated by reference to Exhibit 10.1 to Cryoport's Current Report on Form 8-K filed with the SEC on December 9, 2014.
10.34
2014 Series Secured Promissory Note. Incorporated by reference to Exhibit 10.2 to Cryoport's Current Report on Form 8-K filed with the SEC on December 9, 2014.
10.35
Security Agreement. Incorporated by reference to Exhibit 10.3 to Cryoport's Current Report on Form 8-K filed with the SEC on December 9, 2014.
10.36
Subscription Agreement and Letter of Investment Intent. Incorporated by reference to Exhibit 10.1 to Cryoport's Current Report on Form 8-K filed with the SEC on February 20, 2015.
10.37
Form of Note Exchange Agreement and Letter of Investment Intent, dated February 19, 2015. Incorporated by reference to Exhibit 10.1 to Cryoport's Current Report on Form 8-K filed with the SEC on March 9, 2015.
10.38
Form of Exchange Note issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 10.2 to Cryoport's Current Report on Form 8-K filed with the SEC on March 9, 2015.
10.39
Form of Letter of Investment Intent, dated March 2, 2015. Incorporated by reference to Exhibit 10.3 to Cryoport's Current Report on Form 8-K filed with the SEC on March 9, 2015.
10.40
Form of Amended and Restate Note issued in connection with the Exchange and Investment Agreement. Incorporated by reference to Exhibit 10.4 to Cryoport's Current Report on Form 8-K filed with the SEC on March 9, 2015.
10.41
Amendment to Simple Interest Commercial Promissory Note, dated March 2, 2015. Incorporated by reference to Exhibit 10.5 to Cryoport's Current Report on Form 8-K filed with the SEC on March 9, 2015.
21+
Subsidiaries of Registrant.
23.1+
Consent of Independent Registered Public Accounting Firm—KMJ Corbin & Company LLP.
23.2+
Consent of Snell & Wilmer L.L.P. (included in Exhibit 5.1).
101.INS†
XBRL Instance Document.
101.SCH†
XBRL Taxonomy Extension Schema Document.
101.CAL†
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF†
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB†
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE†
XBRL Taxonomy Extension Presentation Linkbase Document.
*
Indicates a management contract or compensatory plan or arrangement.
#
Confidential portions omitted and filed separately with the U.S. Securities and Exchange Commission pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.
+
Filed herewith.
†
To be filed by  Amendment.
ITEM 17. UNDERTAKINGS
The undersigned registrant
hereby undertakes:
*(a) (1) To file,
during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to
include any prospectus required by section 10(a)(3) of the Securities Act;
(ii) to
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if
the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the effective registration statement.
(iii) to
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
(2) That, for the
purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from
registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of this offering.
(5) That, for the
purpose of determining liability under the Securities Act of 1933 to any purchaser:
(ii) If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating
to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A,
shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in
a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately
prior to such date of first use.
*(h) Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
*
Paragraph references correspond to those of Regulation S-K, Item 512.
SIGNATURES
Pursuant to the requirements
of the Securities Act, as amended, the registrant has duly caused this amendment to the registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Lake Forest, California, on this 25
th
day of March, 2015.
CRYOPORT, INC.
Dated: March 25, 2015
By:
/S/ JERRELL W. SHELTON
Jerrell W. Shelton
Chief Executive Officer and
Director
Pursuant to the requirements
of the Securities Exchange Act of 1933, this report has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:
Signature
Title
Date
/s/
Jerrell W. Shelton
Chief Executive Officer and Director (Principal Executive Officer)
March 25,
    2015
Jerrell W. Shelton
/s/
Robert S. Stefanovich
Chief Financial Officer (Principal Financial and Accounting Officer)
March 25,
    2015
Robert S. Stefanovich
/s/
Richard G. Berman
Director
March 25, 2015
Richard J. Berman
/s/
Ramkumar Mandalam, Ph.D
Director
March 25, 2015
Ramkumar Mandalam
/s/
Edward Zecchini
Director
March 25, 2015
Edward Zecchini
/s/
Richard G. Rathmann
Director
March 25, 2015
Richard G. Rathmann