Item 2.06. Material Impairments

As a result of further indicators of potential impairment, the Registrant performed an updated impairment analysis as of January 31, 2009 of its intangible asset associated with its Strategic Alliance Agreement with General Motors in accordance with FASB Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Based on this updated analysis, the Registrant concluded that the current carrying value of the intangible asset was impaired. The Registrant estimates that it will record in its financial statements for the fiscal quarter ended January 31, 2009, a non-cash impairment charge of approximately $5.8 million, which amount represents the remaining unamortized balance of the intagible asset associated with the strategic alliance.

The Registrant determined that it was appropriate to perform the updated analysis and impair the intangible asset due to the continued deterioration in the US economy, in particular, the automotive industry, and the increased level of uncertainty regarding General Motor's ability to fund future hydrogen fuel cell projects as contemplated under the strategic alliance during the quarter ending January 31, 2009.

The Company will not be required to make any current or future cash expenditures as a result of this impairment charge.

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