Income from OperationsOperating income for the three months ended September 30, 2011 totaled $1.66 million, compared with $1.61 million for the three months ended September 30, 2010.

Operating expenses consisting of selling expenses and general and administrative expenses, were $790,000, an increase of 11%, compared with $710,000 for the same period a year ago. In addition to the business expansion, the increase in operating expenses was primarily due to a 12% increase in G&A expenses associated with increased R&D related to clinical testing of oxygen and respiratory products and R&D of the second generation products, and expenses associated with being a publicly traded company, including expenses on hiring professional employees and retained professional consulting firms, and
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