Note 6.

Notes Payable

Notes payable at December 31 consist of:

	2011		2010
	(in thousands)

Asher Enterprises, Inc., $75,000 Convertible Promissory Note issued March 9, 2010; interest rate 8% per annum, due December 10, 2010	$	—	$	56

White White & Van Etten PC, $68,750 non-interest bearing Promissory Note issued September 30, 2010; payable in eleven equal payments of $6,250; due August 24, 2011		—		49

Xillix Technologies Corporation, $361,000 Promissory Note issued June 26, 1998; interest rate Canadian Prime plus 6% per annum; represents a debt of AccuMed; due December 27, 1999		34		34

Robert Shaw, $25,000 Promissory Note issued September 20, 2001; interest rate 9% per annum		15		15

Ventana Medical Systems, Inc., $62,946 Promissory Note issued November 30, 2003; due December 31, 2003; interest at 8% per annum payable after December 31, 2003		21		21
	$	70	$	175

In September 2010, the Company made a settlement with White White & Van Etten (“White”), CCI owed White $140,000. As a result of this settlement, CCI issued a non-interest bearing promissory note in the principal amount of $68,750 payable in 11 monthly payments of $6,250 and White forgave the remaining $71,000. The Company recorded the benefit as a reduction of selling, general and administration expense. The CCI also imputed interest totaling $2,000 on this note at the rate of 5% per annum and is amortizing the interest over the term of the note. As of December 31, 2011, CCI has paid this note in full.

In March 2010, the Company received $75,000 in exchange for a convertible promissory note payable to Asher Enterprises (“Asher”), including unpaid interest, and is convertible into common stock at any time. The note accrues interest at 8% and is unsecured. The conversion price was variable and determined as 58% of the average of the lowest three trading prices during the ten trading day period prior to the conversion notice. As a result, the Company has recorded a discount and a liability equal to the fixed monetary amount known at inception for the conversion option. The discount was amortized over the term of the note using the effective interest method. Upon issuance of the shares to settle the liability, equity was increased by the amount of the liability and no gain or loss was recognized. During 2010 CCI recorded a charge of $55,000 for amortization of the discount and recorded the charge against the derivative liability. Also during 2010, Asher converted $19,500 of principal due under the note into an aggregate 1,060,626 shares of common stock at an average conversion price of $0.0184 per share. During 2011, Asher converted the remaining $55,500 of principal and $2,000 of accrued interest due under the note into an aggregate 7,306,588 shares of common stock at an average of $0.01 per share.

The Company has failed to make principal and interest payments when due and is in breach of certain warranties and representations under the notes included above. Such notes require the holder to notify CCI in writing of a declaration of default at which time a cure period, as specified in each individual note, would commence. CCI has not received any written declarations of default from holders of its remaining outstanding notes payable.

During year ended December 31, 2011, the Company was advanced $771,000 from related parties. These advances are non-interest bearing and are due on demand. However, using an 8% annual interest rate the Company has recorded a non-cash interest expense totaling $173,000 and $129,000 on the outstanding balances as of December 31, 2011 and 2010, respectively.