One time? Really? Operating Expenses from Continuing

One time? Really?

Operating Expenses from Continuing Operations

Operating expenses for the nine month period ended September 30, 2012 were $10,308,364 as compared to $10,279,657 for the same period of

2011. These expenses are comprised of the following elements:

Selling, general and administrative expenses consist primarily of personnel-related costs, legal costs, accounting costs and other professional, regulatory and

administrative costs.

For the nine month period ended September 30, 2012, selling, general and administrative expenses increased by $553,605 over the same period of the prior

year. This increase was driven by the granting of stock options to key senior executives and the related compensation expense recorded in the current

period, as well as other stock based payment arrangements to contractors and employees. Additionally, as the Company continues our strive to commercial

roll-out, we have slightly increased our headcount. Also, as we have begun the transition from a research and development company to a full commercial

production company, certain costs that had in the past periods been classified as research and development due to the testing nature of these costs, have

been proven and now are classified as both operating expenses and capitalized as costs in property, plant and equipment. These increases in costs were

slightly offset by the reduction of accounting and legal service fees as well as the recording of a recovery of legal fees from our insurance carrier.

For the last three months:

Operating Expenses from Continuing Operations

Operating expenses for the three month period ended September 30, 2012 were $3,301,673 as compared to $3,472,647 for the same period of 2011. These

expenses are comprised of the following elements:

As described in the nine month comparison above, selling, general and administrative expenses consist primarily of personnel-related costs, legal costs,

accounting costs and other professional, regulatory and administrative costs.

For the three month period ended September 30, 2012, selling, general and administrative expenses decreased by $156,194 from the same quarter of the

prior year. This decrease was mainly driven by significant decreases in the accounting, legal and other professional fees incurred by us in the current period

coupled with the recovery of legal fees related to previous litigation from our insurance carrier. These decreases were offset by the expenses recorded

relating to the granting of stock options to key senior executives and the related compensation expense recorded in the current period.