Gross profit as a percentage of revenue was 49% and 32% for the years ended April 30, 2012 and 2011, respectively. The increase for the year ended April 30, 2012 was due to a greater proportion of total sales through wholesale and retail channels versus sales through distributors in the current year. We also earn revenues through a cost-reimbursement grant sponsored by the United States Army (Grant Revenue). Grant Revenue is recognized as milestones under the grant program are achieved. Grant Revenue is earned through reimbursements for the direct costs of labor, travel, and supplies, as well as the pass-through costs of subcontracts with third-party contract research organizations. For the year ended April 30, 2012, we recorded approximately $314,000 in revenue under the grant program.

Total operating expenses for the year ended April 30, 2012 were $8,583,978 compared to $10,665,844 for the same period in 2011. The 20% decrease in total operating expenses was the result of reductions in marketing and sales costs, general and administrative costs, and research and development costs.

Marketing and sales expenses for the year ended April 30, 2012 decreased 57% to $393,922 compared with $875,634 in the prior year. The decrease in marketing and sales expenses for the year was driven primarily by reductions in costs incurred for direct marketing and advertising, compensation and travel.

General and administrative (G&A) expenses for the year ended April 30, 2012 decreased 18% to $5,697,884 compared with $6,952,036 in the prior year. The decrease in G&A expenses was driven primarily by reductions in costs incurred for compensation, facilities, travel and depreciation and amortization; partially offset by an increase in costs incurred for legal and professional fees.

Research and development (R&D) expenses for the year ended April 30, 2012 decreased 8% to $2,462,638 compared with $2,681,713 in the prior year. The decrease in R&D was driven primarily by a reduction in costs incurred for the Phase IIb clinical trials; partially offset by increased costs incurred for the development of Oxycyte and Dermacyte ®, consulting fees and compensation.

During the year ended April 30, 2012, interest expense increased approximately $7.2 million compared to the same period in the prior year. In the current year we recognized non-cash interest expense related to the fair-value adjustments to our outstanding preferred stock, dividends paid on our preferred stock, quarterly interest accrued on our outstanding convertible notes payable and the recognition of unamortized premiums upon prepayment of our long-term notes payable.

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