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&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&lt;b&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold;" size="2"&gt;1. SUBSEQUENT EVENTS&lt;/font&gt;&lt;/b&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;On April&amp;#160;5, 2013, Special Diversified Opportunities Inc.&lt;/font&gt; &lt;font style="FONT-SIZE: 10pt;" size="2"&gt;(f/k/a Strategic Diagnostics Inc.)&lt;/font&gt; &lt;font style="FONT-SIZE: 10pt;" size="2"&gt;(&amp;#8220;SDOI&amp;#8221; or the &amp;#8220;Company&amp;#8221;), SDIX LLC, a Delaware limited liability company (the &amp;#8220;Purchaser&amp;#8221;) and OriGene Technologies ,&amp;#160;Inc., a Delaware corporation and the ultimate parent of the Purchaser (&amp;#8220;Parent&amp;#8221; or &amp;#8220;OriGene&amp;#8221;) entered into an Asset Purchase Agreement (the &amp;#8220;Asset Purchase Agreement&amp;#8221;) pursuant to which the Company agreed, subject to certain terms and conditions including stockholder approval, to sell to the Purchaser substantially all of the Company&amp;#8217;s rights, title and interest in substantially all of the Company&amp;#8217;s non-cash assets related to the Life Sciences Business (the &amp;#8220;Asset Sale&amp;#8221;).&lt;/font&gt;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;At a special meeting of the stockholders of the Company held on July&amp;#160;10, 2013, the stockholders approved the Asset Sale as contemplated by the Asset Purchase Agreement.&amp;#160; On July&amp;#160;12, 2013 the Company completed the Asset Sale.&lt;/font&gt;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;Pursuant to the terms and conditions of the Asset Purchase Agreement, the Purchaser acquired all of&amp;#160; the Company&amp;#8217;s rights, title, and interest in substantially all of the assets, equipment, inventory, and intellectual property (the &amp;#8220;Purchased Assets&amp;#8221;) related exclusively to the Life Sciences Business, the product portfolio in respect of which includes a full suite of integrated capabilities, including antibody and assay design, development and production and the Advanced Technologies Business.&amp;#160; The Purchaser also assumed and agreed to discharge the Assumed Liabilities, as defined in the Asset Purchase Agreement.&amp;#160; Parent unconditionally guaranteed Purchaser&amp;#8217;s obligations in the Asset Purchase Agreement.&amp;#160; The purchase price for the Purchased Assets was $16,000, which is subject to a post-closing working capital adjustment.&amp;#160; SDOI Inc. will retain the cash from the purchase price, less the escrow amount (described below) until such amount, if any, is released from escrow.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The Company and Purchaser each made customary representations, warranties and covenants in the Asset Purchase Agreement.&amp;#160; At closing, $1,300 of the purchase price was placed in escrow to be governed by the terms of a separate escrow agreement.&amp;#160; The Asset Purchase Agreement contains indemnification provisions pursuant to which the Company and the Purchaser have agreed to indemnify the other for certain losses, including with respect to environmental, litigation, tax and other matters.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;The Asset Purchase Agreement also contains restrictive covenants, including, that SDIX Inc. not (i)&amp;#160;engage in a competing business for a period of five years after the closing date, (ii)&amp;#160;directly or indirectly solicit Purchaser&amp;#8217;s employees for a period of two years after the closing date, (iii)&amp;#160;directly or indirectly solicit the Purchaser&amp;#8217;s customers for a period of five years after the closing date and (iv)&amp;#160;disparage the Purchaser at any time.&amp;#160; The closing occurred on July&amp;#160;12, 2013.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
&lt;p style="TEXT-INDENT: 25.9pt; MARGIN: 0in 0in 0pt;"&gt;&lt;font style="FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt;" size="2"&gt;Except as otherwise indicated, the disclosure set forth in these Notes to Consolidated Interim Financial Statements and elsewhere in this Form&amp;#160;10-Q does not give effect to the closing of the Asset Sale, which occurred after the Balance Sheet date of June&amp;#160;30, 2013.&amp;#160; As a result of the Asset Sale, the Company no longer owns its historical operating assets, and its past business operations have been discontinued.&lt;/font&gt;&lt;/p&gt;
&lt;p style="MARGIN: 0in 0in 0pt;"&gt;&amp;#160;&lt;/p&gt;
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