Nine Months Ended
                                                                                           September 30,
                                                                                       ---------------------
                                                                                         2003         2002
                                                                                       --------     --------
                                                                                                    
Cash flows from operating activities:
Net loss                                                                               $(21,490)    $ (7,075)
Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                                            402          379
   Amortization of deferred compensation                                                      3           45
   Amortization of debenture discounts and charge for beneficial conversion feature       4,469          739
   Amortization of deferred offering costs                                                  921          105
   Liquidated damages due to delayed registration                                           540           --
   Non-cash loss (gain) on settlement of trade debt                                          55       (1,319)
   Fair market value of common stock warrants, options and bonuses granted                6,575          565
   Gain on repurchase of beneficial conversion feature                                     (128)          --
   Warrant liability adjustment                                                            (275)         152
   Loss on sale of equipment                                                                 55           --
   Changes in operating assets and liabilities:
     Accounts receivable                                                                     23          182
     Inventory                                                                             (579)         468
     Prepaid expenses and other current assets                                           (1,232)         134
     Deferred offering costs and other assets                                            (1,719)          25
     Accounts payable and accrued expenses                                                1,048       (1,018)
     Other long-term liabilities                                                          1,623            1
                                                                                       --------     --------
       Net cash used in operating activities                                             (9,709)      (6,617)
                                                                                       --------     --------
Cash flows from investing activities:
   Purchase of equipment                                                                   (266)        (208)
                                                                                       --------     --------
       Net cash used in investing activities                                               (266)        (208)
                                                                                       --------     --------
Cash flows from financing activities:
   Proceeds from sale of stock                                                           16,979        3,216
   Expenses paid related to sale of stock                                                  (677)        (326)
   Net proceeds from issuance of notes and debentures                                     3,223        3,720
   Repayment of notes and debentures                                                       (735)         (18)
   Principal payments on capital lease obligations                                           (2)         (35)          
                                                                                       --------     --------
       Net cash provided by financing activities                                         18,788        6,557
                                                                                       --------     --------
Net increase (decrease) in cash and cash equivalents                                      8,813         (268)

Cash and cash equivalents at beginning of period                                            147          287
                                                                                       --------     --------
Cash and cash equivalents at end of period                                             $  8,960     $     19
                                                                                       ========     ========

Supplemental disclosure of cash flow activities:
   Cash paid for interest                                                              $     37     $     72
   Cash paid for income taxes                                                                 2            2

Supplemental disclosure of non-cash activities:
   Dividend on mandatorily redeemable Series A preferred stock                               90           90
   Common stock grants                                                                      435          298
   Conversion of notes and debentures payable and accrued interest to common stock        8,230          458
   Fair market value of warrants issued in conjunction with debenture                        81          577
   Beneficial conversion feature, net of write off upon conversion                        1,986        3,152
   Accrued interest converted to note payable                                               148           --

           See accompanying notes to consolidated financial statements