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<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>7. COMMITMENTS AND CONTINGENCIES</b>
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<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Performance Targets</i>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">     In the ordinary course of contracting with our customers, we may agree to make some or all of
our fees contingent upon the customer’s achievement of financial improvement targets from the use
of our services and software. These contingent fees are not recognized as revenue until the
customer confirms achievement of the performance targets. We generally receive customer acceptance
as and when the performance targets are achieved. If we invoice contingent fees prior to customer confirmation that a performance
target has been achieved, we record invoiced contingent fees as deferred revenue on our Condensed
Consolidated Balance Sheet. Often, recognition of this revenue occurs in periods subsequent to the
recognition of the associated costs.
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<b>
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<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>Legal Proceedings</i>
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<div align="left" style="font-size: 10pt; margin-top: 6pt">     From time to time, we become involved in legal proceedings arising in the ordinary course of
business. As of March 31, 2011, we are not presently involved in any legal proceedings, the outcome
of which, if determined adversely to us, would have a material adverse affect on our business,
operating results or financial condition.
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