Note 3.

Fixed Assets

Fixed assets consist of the following:

	March 31,			December 31,
	2012			2011
	(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		—			167
		2,020			2,187
Less accumulated depreciation and amortization		(1,785	)		(1,825	)
Total	$	235		$	362

For the quarters ended March 31, 2012 and 2011, depreciation expense was $57,000 and $122,000, 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 expense as excess idle time.

During the quarter, the Company sold its remaining machine for the net carrying value of $70,000. Since the Company had not collected the sales price as of March 31, 2012 the amount is recorded under accounts receivable. This sale will not be reflected in the statement of cash flows until the cash is received.