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, 2012
Sep. 30, 2011
Cash flows from operating activities:    
Net loss $ (30,359,000) $ (2,813,000)
Adjustments to reconcile net loss to cash used in operating activities:    
Gain on change in fair value of derivative - warrants (1,236,000) (3,312,000)
Loss on change in fair value of derivative - preferred stock 25,770,000 470,000
Warrant extension expense 2,316,000 0
Gain on write off and negotiated accounts payable 0 (1,282,000)
Depreciation and amortization 91,000 176,000
Stock option compensation expense 307,000 767,000
Stock issued to directors and employees 302,000 0
Stock issued for services 53,000 700,000
Change in operating assets and liabilities:    
Receivables (148,000) 899,000
Inventory (85,000) (192,000)
Prepaid expenses and other current assets 11,000 43,000
Restricted cash 330,000 0
Other assets 13,000 (20,000)
Accounts payable and accrued expenses 634,000 (73,000)
Dividends payable 274,000 197,000
Accrued interest payable (79,000) (96,000)
Deferred revenue (533,000) (1,109,000)
Net cash used in operating activities (2,339,000) (5,645,000)
Cash flows from investing activities:    
Capital expenditures (15,000) (40,000)
Net cash used in investing activities (15,000) (40,000)
Net decrease in cash and cash equivalents (2,354,000) (5,685,000)
Cash and cash equivalents at beginning of period 2,460,000 7,033,000
Cash and cash equivalents at end of period 106,000 1,348,000
Supplemental cash flow information:    
Cash paid for interest 330,000 660,000
Supplemental disclosure of noncash transactions:    
Shares issued for dividends on preferred stock (in shares) 22,000 1,000
Preferred stock dividends in dividends payable $ 1,323,000 $ 1,327,000