Quarterly report pursuant to sections 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)
 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Cash Flows from Operating Activities:    
Net loss $ (7,239,978) $ (3,225,880)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 210,556 349,295
Amortization of other intangible assets 193,070 214,299
Amortization of debt discount and debt issuance costs 68,976 84,277
Amortization of deferred rent (24,552) (59,491)
Impairment charge 3,397,212  
Gain on debt restructuring (1,048,308)  
Interest expense forgiven on debt restructuring 140,667  
Loss on sale of businesses   622
Loss on disposal of property and equipment 6,062 3,401
Increase in inventory reserve and inventory write downs 629,004 114,470
Stock-based compensation 44,313 291,759
(Increase) decrease in:    
Trade accounts receivable, net (30,166) (145,709)
Inventories 1,011,366 (253,612)
Prepaid expenses (27,141) 20,328
Other assets 25,959 8,847
Accounts payable, accrued liabilities and related party payable (178,950) 280,413
Accrued compensation and benefits (115,466) 6,300
Other liabilities 206 (3,369)
Total adjustments 4,302,808 911,830
Net cash used in operating activities (2,937,170) (2,314,050)
Cash Flows from Investing Activities:    
Patents, trademark and other intangible assets costs (83,076) (134,321)
Purchase of property and equipment (19,599) (216,661)
Proceeds from the sale of property and equipment 7,685 7,500
Proceeds from the sale of businesses, net of transaction costs   1,110,360
Net cash (used in) provided by investing activities (94,990) 766,878
Cash Flows from Financing Activities:    
Proceeds from issuance of convertible preferred stock, net of issuance costs 5,195,225  
Payment to restructure convertible promissory notes (880,000)  
Proceeds from exercise of employee stock options and warrants, net   319,750
Net cash provided by financing activities 4,315,225 319,750
Net increase (decrease) in Cash and Cash Equivalents 1,283,065 (1,227,422)
Cash and Cash Equivalents, beginning of period 3,014,656 5,308,900
Cash and Cash Equivalents, end of period $ 4,297,721 $ 4,081,478