Annual report pursuant to section 13 and 15(d)

CONSOLIDATED STATEMENTS OF OPERATIONS

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
 12 Months Ended 168 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Net sales     $ 69,000
Cost of goods sold     24,120
Gross profit     44,880
Operating expenses 6,886,681 4,293,631 44,144,635
Research and development expenses 1,130,283 427,982 7,444,997
Non-cash patent settlement cost     1,610,066
Loss before other income (expense) (8,016,964) (4,721,613) (53,154,818)
Other income (loss) 48,000 145,112 191,972
Interest income     16,342
Interest and financing expense (5,084,253) (4,034,558) (16,676,617)
Change in fair value of derivative liabilities 2,021,536 414,505 2,128,201
Costs of private placement   (1,129,212) (1,640,715)
Costs to induce conversion of notes   (168,340) (469,043)
Loss on disposition of equipment     (14,426)
Settlement of Debt Due Morale/ Matthews     (927,903)
Settlement of litigation and debt 175,934   1,265,022
Loss before provision for income taxes (10,855,747) (9,494,106) (69,281,985)
Provision for income taxes 800 800 7,482
Net loss $ (10,856,547) $ (9,494,906) $ (69,289,467)
Net loss per common share, basic and diluted (in Dollars per share) $ (0.10) $ (0.12)  
Weighted average common shares outstanding, basic and diluted (in Shares) 104,103,109 81,910,267