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&lt;p style="TEXT-INDENT: 0.25in; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;During the normal course of the business, the Company is occasionally involved with various claims and litigation.&amp;#160; Reserves are established in connection with such matters when a loss is probable and the amount of such loss can be reasonably estimated.&amp;#160; As of each December&amp;#160;31, 2012 and June&amp;#160;30, 2013, no material reserves were recorded.&amp;#160; No reserves are established for losses which are only reasonably possible.&amp;#160; The determination of probability and the estimation of the actual amount of any such loss are inherently unpredictable, and it is therefore possible that the eventual outcome of such claims and litigation could exceed the estimated reserves, if any.&amp;#160; Based upon the Company&amp;#8217;s experience, current information and applicable law, it does not believe it is reasonably possible that any proceedings or possible related claims will have a material effect on its financial statements.&lt;/font&gt;&lt;/p&gt;
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