Quarterly report pursuant to sections 13 or 15(d)

Condensed Balance Sheets (Unaudited)

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Condensed Balance Sheets (Unaudited) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Current Assets:    
Cash and cash equivalents $ 3,787,252 $ 145,478
Accounts receivable 186,054 401,580
Inventory 939,744 968,818
Prepaid expenses and other current assets 129,873 19,773
Total current assets 5,042,923 1,535,649
Property and equipment, net 1,281,730 1,218,830
Software license inventory 1,137,500  
Deferred costs   214,469
Other assets 31,400 61,481
Total assets 7,493,553 3,030,429
Current liabilities:    
Accounts payable 2,535,348 4,037,168
Accrued compensation 347,947 1,011,413
Accrued interest   971,733
Other accrued liabilities 1,305,622 2,015,046
Derivative liability 7,439  
Related party deferred revenue 2,046,374 2,600,000
Convertible notes payable, net of unamortized discount of $117,405 at December 31, 2011   3,953,595
Total current liabilities 6,242,730 14,588,955
Related party deferred revenue   1,396,374
Related party accrued interest   799,102
Other accrued liabilities 498,474 209,143
Related party convertible notes payable, net of unamortized discount of $0 and $432,706 at September 30, 2012 and December 31, 2011, respectively 4,338,601 4,377,294
Convertible notes payable, net of unamortized discount of $0 and $316,610 at September 30, 2012 and December 31, 2011, respectively 2,000,000 3,308,390
Junior secured notes payable, net of unamortized discount of $2,808,977 and $2,805,686 at September 30, 2012 and December 31, 2011, respectively 191,023 194,314
Total liabilities 13,270,828 24,873,572
Commitments and contingencies (Notes 5, 8 and 9)      
Stockholders' deficit:    
Series A convertible preferred stock; $.01 par value; 8,000,000 shares authorized, 7,965,000 shares issued and outstanding at December 31, 2011   7,965,000
Common stock, $.01 par value; at September 30, 2012, 100,000,000, 48,168,760, and 47,842,930 shares authorized, issued, and outstanding, respectively; at December 31, 2011, 70,000,000 16,410,820, and 16,084,990 shares authorized, issued, and outstanding, respectively 481,687 164,108
Additional paid-in capital 60,357,805 31,495,593
Treasury stock, at cost, 325,830 common shares (1,679,234) (1,679,234)
Accumulated deficit (64,937,533) (59,788,610)
Total stockholders' deficit (5,777,275) (21,843,143)
Total liabilities and stockholders' deficit $ 7,493,553 $ 3,030,429