MD&A.

General expenses

General expenses and rent increased in Q2 2016 as compared to Q2 2015 by $176,136. The expense was $241,088 in Q2 2015 and $417,224 in Q2 2016. The expense was unusually high in Q2 2016 due to the increased travel, due diligence and other acquisition costs related to the acquisition of DenseLight and BB Photonics. The expense also includes the activities of DenseLight since May 12, 2016 which contributed $74,000 to the expense in Q2 2016. The Company also incurred substantial shipping costs in transferring most of its equipment from the US to Singapore in Q2 2016 as part of its integration plan.