Note 4.

Fixed Assets

Fixed assets consist of the following:

	September 30,			December 31,
	2011			2010
	(unaudited)

Furniture and fixtures	$	47		$	47
Laboratory equipment		508			508
Computer and communications equipment		261			261
Design and tooling		1,204			1,204
Machinery and equipment		777			777
		2,797			2,797
Less accumulated depreciation and amortization		(2,031	)		(1,742	)
Total	$	766		$	1,055

For the nine months ended September 30, 2011 and 2010, depreciation expense was $289,000 and $295,000, respectively. The Company did not allocate any of the depreciation expense of the machinery and equipment or the design and tooling into inventory since the Company has suspended manufacturing. This depreciation was included as a selling, general and administrative (“SG&A”) expense as excess idle time.

During 2009, a supplier filed suit against the Company alleging that it owes the supplier approximately $377,000. This supplier had previously placed a lien on all of the Company’s machinery and equipment. See Note 10 -Legal Proceedings for additional information regarding this claim.