Quarterly report pursuant to sections 13 or 15(d)

Condensed Balance Sheets (Unaudited)

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Condensed Balance Sheets (Unaudited) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Current Assets:    
Cash and cash equivalents $ 5,031,199 $ 1,620,005
Accounts receivable 787,706 445,432
Inventory 1,242,368 899,702
Prepaid expenses and other current assets 164,999 110,873
Total current assets 7,226,272 3,076,012
Property and equipment, net 1,237,453 1,287,115
Software license inventory 945,000 1,137,500
Other assets 111,692 51,119
Total assets 9,520,417 5,551,746
Current liabilities:    
Accounts payable 1,543,114 1,961,195
Accrued compensation 178,904 278,124
Other accrued liabilities 373,635 1,177,142
Derivative liabilites 4,106,224 2,129,091
Related party deferred revenues   650,000
Deferred product and service revenues 110,265 112,725
Total current liabilities 6,312,142 6,308,277
Other accrued liabilities 445,781 574,722
Related party convertible notes payable 4,338,601 4,338,601
Note payable, net of unamortized discount of $471,103 and $0 at September 30, 2013 and December 31, 2012, respectively 3,818,342 2,000,000
Junior secured notes payable, net of unamortized discounts of $2,782,440 and $2,804,451 at September 30, 2013 and December 31, 2012, respectively 217,560 195,549
Total liabilities 15,132,426 13,417,149
Commitments and contingencies (Notes 5 and 6)      
Stockholders' deficit:    
Common stock, $.01 par value; 100,000,000 shares authorized; 58,807,144 and 58,481,314 shares issued and outstanding, respectively, at September 30, 2013; and 48,418,830 and 48,093,000 issued and outstanding, respectively, at Decembet 31, 2012 588,070 484,187
Additional paid-in capital 66,515,975 58,995,972
Treasury stock, at cost, 325,830 common shares (1,679,234) (1,679,234)
Accumulated deficit (71,036,820) (65,666,328)
Total stockholders' deficit (5,612,009) (7,865,403)
Total liabilities and stockholders' deficit $ 9,520,417 $ 5,551,746