Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Balance Sheets (Unaudited)

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Condensed Consolidated Balance Sheets (Unaudited) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Current Assets:    
Cash and cash equivalents $ 1,894,681 $ 3,516,244
Accounts receivable 548,766 770,352
Inventory, net 2,255,839 1,477,161
Prepaid expenses and other current assets 48,092 174,870
Total current assets 4,747,378 5,938,627
Property and equipment, net 559,380 903,160
Software license inventory 892,500 927,500
Other assets 305,735 103,783
Total assets 6,504,993 7,873,070
Current liabilities:    
Accounts payable 1,436,386 1,376,627
Accrued compensation 313,570 210,359
Other accrued liabilities 1,023,035 310,317
Derivative liabilites 3,169,679 3,747,858
Deferred product and service revenues 94,063 106,859
Related party convertible notes payable   4,338,601
Total current liabilities 6,036,733 10,090,621
Other accrued liabilities 789,976 531,830
Note payable, net of unamortized discount of $314,511 and $437,261 at September 30, 2014 and December 31, 2013, respectively 3,974,933 3,852,183
Total liabilities 14,432,160 14,707,039
Commitments and contingencies (Notes 5, 6, 7, 8 and 9)      
Stockholders' deficit:    
Common stock, $0.01 par value; 100,000,000 shares authorized; 58,986,797 shares issued and outstanding at September 30, 2014; and 58,536,972 issued and outstanding, at December 31, 2013 589,867 585,369
Additional paid-in capital 66,845,488 65,333,264
Accumulated deficit (75,362,522) (72,752,602)
Total stockholders' deficit (7,927,167) (6,833,969)
Total liabilities and stockholders' deficit 6,504,993 7,873,070
2010 Junior Secured Notes Payable [Member]
    
Current liabilities:    
Junior secured notes payable 288,204 232,405
2014 Junior Secured Notes Payable [Member]
    
Current liabilities:    
Junior secured notes payable $ 3,342,314