Serenic Corporation — Corporate Update

The Company embarked upon its Fiscal 2009 business plan in a relatively stable global economy that deteriorated significantly during the second half of the year. In accordance with the original business plan, management undertook a number of growth initiatives during the first few months of Fiscal 2009, anticipating that revenues would continue its historical growth rates. As a result of the global economic melt-down that began to negatively affect revenues in September 2008, management responded by postponing and curtailing certain initiatives, in a cautionary move to conserve cash and better position the Company to weather the economic downturn. This caused un-planned operational losses because programs were stopped before they could become profitable. However, management feels confident that the Company is now well-poised to re-engage growth initiatives relatively quickly once the current economic downturn reverses course. Measures taken between September 2008 and February 2009 to reorganize business, operational and financial plans have reduced committed expenditures for Fiscal 2010 by approximately $0.75 million from Fiscal 2009, providing the Company greater flexibility to respond to the realities of the current economy.