General and Administrative (G&A) expenses decreased by $347,471 for the period ended July 31, 2012 compared to the comparable period in 2011. For the period ended July 31, 2012, legal and professional fees decreased by $140,386; personnel costs decreased by $95,102; others costs such as travel, supplies and insurance decreased by $23,539; and facilities and depreciation and amortization costs decreased by $88,444; compared to the same period in the prior year. These decreases were offset by an increase in legal fees associated with the Tenor matter and fees associated with the second closing of the Series A Preferred Stock financial transaction. The decrease in consulting fees was primarily related to Board of Director recruiting fees in the prior period, and the decrease in investor relations costs was the result of terminating existing agreements with Swiss-based public relations firms and the decision to withdraw our listing from the SIX Swiss Exchange.

Research and development expenses were $637,272 during the period ended July 31, 2012 compared to $651,961 during the same period in 2011. The overall decrease was due primarily to a reduction in personnel costs, consulting fees, and facilities costs. However, clinical and preclinical development costs for the three months ended July 31, 2012 increased $130,000 compared to the same period in the prior year primarily due to increases of $218,000 and $50,000 in costs associated with the preclinical studies designed to respond to the existing clinical hold, and costs associated with our Phase IIb STOP TBI trials, respectively. These development costs were offset by decreases of $123,000 and $15,000 in development costs incurred for our products, Dermacyte ® and Oxycyte ®, respectively. Personnel and consulting fees were down $71,000 and $79,000 respectively for the three months ended July 31, 2012 compared to same quarter in the prior year.

For the quarter ended July 31, 2012 we recorded restructuring expenses of $47,476 as a result of our decision to close the Costa Mesa, CA facility. We expect to record an additional $175,000 in restructuring costs in the second quarter for the fair-value of severance and benefits related charges, relocation costs, and remaining lease liabilities.

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