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&lt;td valign="top" width="4%" align="left"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;11.&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
&lt;td valign="top" align="left"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;&lt;b&gt;Commitments and
contingencies:&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
&lt;/tr&gt;
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&lt;p style="PADDING-BOTTOM: 0px; MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"&gt;
&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;In March 2012,
the Company announced that the New Jersey Federal Court granted a
stay of further litigation in the patent infringement lawsuit
previously filed by MonoSol Rx, LLC (&amp;#x201C;MonoSol&amp;#x201D;) against
the Company and its ONSOLIS&lt;font style="FONT-FAMILY: Times New Roman" size="1"&gt;&lt;sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline"&gt;&amp;#xAE;&lt;/sup&gt;&lt;/font&gt;
commercial partners.&amp;#xA0;The court ordered that the case would be
stayed pending resolution by the United States Patent and Trademark
Office (&amp;#x201C;USPTO&amp;#x201D;) of reexamination proceedings and
follows the recent rejection by the USPTO of all claims in all
three patents asserted by MonoSol against the Company and its
commercial partners for ONSOLIS&lt;font style="FONT-FAMILY: Times New Roman" size="1"&gt;&lt;sup style="POSITION: relative; BOTTOM: 0.8ex; VERTICAL-ALIGN: baseline"&gt;&amp;#xAE;&lt;/sup&gt;&lt;/font&gt;.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; FONT-SIZE: 1px"&gt;
&amp;#xA0;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;In July 2012, a
Reexamination Certificate for MonoSol&amp;#x2019;s &amp;#x2018;292 Patent in
its amended form was issued by the USPTO. The USPTO also issued a
second Office Action closing prosecution on MonoSol&amp;#x2019;s
&amp;#x2018;588 Patent. The Action rejects all claims as anticipated or
obvious for a second time.&amp;#xA0;It also rejects the amended claims
proposed by MonoSol as unclear and lacking support. In August 2012,
a Reexamination Certificate for MonoSol&amp;#x2019;s &amp;#x2018;891 Patent
in its amended form was issued.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;On January&amp;#xA0;23, 2013,
the USPTO issued a Right of Appeal Notice, rejecting all claims of
the &amp;#x2018;588 Patent and closing reexamination proceedings. This
action confirms that all claims of this patent are also invalid,
but unlike &amp;#x2018;292 and &amp;#x2018;891, the USPTO has not found that
any amended or narrower claims should be granted. On
February&amp;#xA0;22, 2013, MonoSol filed both a Notice of Appeal to
the Board of Patent Appeals and Interferences and a Request for
Continuing Examination of the &amp;#x2018;588 Patent.&amp;#xA0;Subsequently,
on July&amp;#xA0;3, 2013, the USPTO denied MonoSol&amp;#x2019;s
February&amp;#xA0;22, 2013 Request to Continue Examination.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"&gt;&lt;font style="FONT-FAMILY: Times New Roman" size="2"&gt;Inter partes reviews, a new
USPTO process to review the patentability of one or more claims of
patents, was enacted in September, 2012. As such, on June&amp;#xA0;12,
2013, despite the Company&amp;#x2019;s previously noted success in the
prior ex parte reexaminations for the &amp;#x201C;292&amp;#x201D; and
&amp;#x201C;891&amp;#x201D; patents, the Company availed themselves of this
new process and filed requests for inter partes reviews on the
narrowed yet reexamined patents, the &amp;#x2018;292C1 and &amp;#x2018;891C1
Patents, to challenge their validity and continue to strengthen the
Company&amp;#x2019;s position. This inter partes review process allows
the Company to actively participate in the reviews and address any
of MonoSol&amp;#x2019;s arguments and representations made during the
review process, which heightens the Company&amp;#x2019;s ability to
invalidate these patents. The Company is awaiting the USPTO&amp;#x2019;s
decision as to whether they will accept the Company&amp;#x2019;s
requests for these reviews. (See Part II, Item&amp;#xA0;1, Legal
Proceedings).&lt;/font&gt;&lt;/p&gt;
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