Quarterly report pursuant to Section 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (3,010,000) $ (2,585,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization of intangible assets 9,000 14,000
Stock compensation expense for options and warrants issued to employees and non-employees 421,000 60,000
Issuance of shares for services 0 1,597,000
Amortization of debt discounts 40,000 252,000
Change in value of warrant and derivative liabilities 356,000 (102,000)
Changes in operating assets and liabilities:    
Inventory (80,000) 0
Other assets (12,000) (22,000)
Accounts payable and accrued expenses 1,781,000 246,000
Net cash used in operating activities (495,000) (540,000)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from the exercise of options and warrants 0 4,000
Proceeds from notes payable 408,000 621,000
Repayment of note payable 0 (50,000)
Net cash provided by financing activities 408,000 575,000
NET DECREASE IN CASH AND CASH EQUIVALENTS (87,000) 35,000
CASH AND CASH EQUIVALENTS - Beginning of period 92,000 54,000
CASH AND CASH EQUIVALENTS - End of period $ 5,000 $ 89,000