Paragon B&R 2012 Free - Archive Verification Fail

I recently upgraded from BR 2010 to BR 2012. Completely uninstalled previous version, rebooted and did fresh install of 2012. Backup of system partition went through without errors, but the archive will not pass integrity verification. Tried the verification no less than three times, but failed every time. I did another backup and the same thing happened. Both archives created by B&R 2012 simply will not pass verification.

However, B&R 2012 was able to verify archives created by B&R 2010.

Attached a couple of images of the failed process.

Result: Unable to read file
Source: Hard Disk Manager
Error Code: 0x11020

Never had this error in Paragon B&R 2010. Right now I am inclined to restore my system to B&R 2010 or 2011. I also have a Win 7 Pro desktop with B&R 2011, no such issue.

Operating System: Windows 7 Home Basic SP1 32-bit (Toshiba OEM)

Anyone having the same issue?