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## RESEARCH AND PRODUCT DEVELOPMENT 

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During the year ended December 31, 2012, research and development expenses before CeaProve GLYPH<H23006> development decreased by 1% or $6,000 during the same period of 2011 due to increased expenditures incurred for third party technical services and collaboration agreements offset by grant revenue recognition of discounted CAAP funding and grant contributions from Alberta Innovates Technology Futures. CeaProve GLYPH<H23006> costs have decreased by 87% from $156,000 to $21,000 as a result of decreased costs for patents and decreased costs associated with contract manufacturing activities. 

During the fourth quarter of 2012, research and development expenses before CeaProve GLYPH<H23006> development have decreased by 41% mostly due to grant revenue recognition of discounted CAAP funding and grant contributions from Alberta Innovates Technology Futures. CeaProve GLYPH<H23006> costs have decreased by 90% from $29,000 to $3,000 as a result of decreased costs for patents and decreased costs associated with contract manufacturing activities. 

## GENERAL AND ADMINISTRATION 

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General and administration expense for the year ended December 31, 2012 increased by $421,000 or 31% from $1,374,000 to $1,795,000 as a result of increased expenses arising from several non-recurring events. Salaries and benefits increased $85,000 mainly as a result of engaging an engineer to oversee the new manufacturing facility activities. Consulting increased $196,000, most of which related to feasibility studies to review potential new 

