Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Statements of Cash Flows (Unaudited)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash flows from operating activities:    
Net income (loss) $ 5,524,000 $ (30,359,000)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:    
Gain (loss) on change in fair value of derivative - warrants (140,000) (1,236,000)
Gain (loss) on change in fair value of derivative preferred stock (8,471,000) 25,770,000
Warrant extension expense 0 2,316,000
Depreciation and amortization 2,000 91,000
Stock option compensation expense 354,000 307,000
Stock issued to directors and employees 99,000 302,000
Stock issued for services 108,000 53,000
Change in operating assets and liabilities:    
Receivables 784,000 (148,000)
Inventory 194,000 (85,000)
Prepaid expenses and other current assets 162,000 11,000
Restricted cash 0 330,000
Other assets 0 13,000
Accounts payable and accrued expenses (1,333,000) 634,000
Interest payable on dividends 182,000 274,000
Accrued interest payable 0 (79,000)
Deferred revenue 3,010,000 (533,000)
Net cash provided by (used in) operating activities 475,000 (2,339,000)
Cash flows from investing activities:    
Capital expenditures (1,000) (15,000)
Net cash used in investing activities (1,000) (15,000)
Cash flows from financing activities:    
Proceeds from exercise of stock options 29,000 0
Net cash provided by financing activities 29,000 0
Net increase (decrease) in cash and cash equivalents 503,000 (2,354,000)
Cash and cash equivalents at beginning of period 396,000 2,460,000
Cash and cash equivalents at end of period 899,000 106,000
Supplemental cash flow information:    
Cash paid for interest 0 330,000
Supplemental disclosure of noncash transactions:    
Shares issued for dividends on preferred stock 0 22,000
Preferred stock dividends in dividends payable $ 2,202,000 $ 1,323,000