----

----

----

|   | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|---|-----------------------------------------------------------------------------------------|

|   |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------|------------------------------------------------------------------------------------------|

----

| Delaware                        |   | 36-4296006          |
|---------------------------------|--------|---------------------|
| (State or Other Jurisdiction of |   | (I.R.S. Employer    |
| Incorporation or Organization)  |   | Identification No.) |

| (Address of Principal Executive Offices) |
|------------------------------------------|

|                                                       | (312) 222-9550 |   |
|------------------------------------------------------------|----------------|--------|
| (Registrant’s Telephone Number, Including Area Code) |

| (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
|------------------------------------------------------------------------------------|

| Large Accelerated Filer  ̈          |   | Accelerated Filer  ̈               |
|-----------------------------------------|--------|----------------------------------------|
|                                    |   |                                   |
| Non-Accelerated Filer   ̈ |   | Smaller Reporting Company  x |

----

----

----

|                                                                                                                                              | Page               |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|
| PART I.  – FINANCIAL INFORMATION                                                                                                  |     |
|                                                                                                                                              |               |
| Item 1.      Financial Statements                                                                                   |               |
|                                                                                                                                              |               |
| a) Condensed Consolidated Balance Sheets – June 30, 2011(unaudited) and December 31, 2010                                                   | 2                  |
|                                                                                                                                              |               |
| b) Condensed Consolidated Statements of Operations – Six and three months ended June 30, 2011 and June 30, 2010 (unaudited)                 | 3                  |
|                                                                                                                                              |               |
| c) Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2011 and June 30, 2010  (unaudited)                | 4                  |
|                                                                                                                                              |               |
| d) Notes to Unaudited  Condensed Consolidated Financial Statements                                                                      | 5                  |
|                                                                                                                                              |               |
| Item 2.      Management’s Discussion and Analysis of Financial Condition and  Results of Operations | 11                 |
|                                                                                                                                              |               |
| Item 4.      Controls and Procedures                                                                                | 16                 |
|                                                                                                                                              |               |
| PART II. — OTHER INFORMATION                                                                                                                |               |
|                                                                                                                                              |               |
| Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds                                            | 17                 |
|                                                                                                                                              |               |
| Item 3.      Defaults upon Senior Securities                                                                        | 17                 |
|                                                                                                                                              |               |
| Item 6.      Exhibits                                                                                               | 18                 |
|                                                                                                                                              |               |
| SIGNATURES                                                                                                                                        | 19                 |
|                                                                                                                                              |               |
| EXHIBIT INDEX                                                                                                                                     | 20                 |
|                                                                                                                                              |               |
| Exhibit 31.1    Section 302 Certification                                                                                     |               |
| Exhibit 32.1    Section 906 Certification                                                                                     |               |

----

|                                                                                                                                                                                                                        |   | June 30, |    |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                        |   | 2011          |    |   |              | 2010*  |   |
|                                                                                                                                                                                                                        |   | (unaudited)   |    |   |              |   |   |
| Assets                                                                                                                                                                                                                      |   |          |    |   |              |   |   |
| Current Assets:                                                                                                                                                                                                             |   |          |    |   |              |   |   |
| Cash and cash equivalents                                                                                                                                                                                                   |   | $             | — |   |              | $      | 13 |   |
| Accounts receivable                                                                                                                                                                                                         |   |          | 7       |   |              |   | 9 |   |
| Inventories                                                                                                                                                                                                                 |   |          | 108     |   |              |   | 108 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                   |   |          | 15      |   |              |   | 25 |   |
| Total current assets                                                                                                                                                                                                        |   |          | 130     |   |              |   | 155 |   |
|                                                                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Fixed assets, net                                                                                                                                                                                                           |   |          | 861     |   |              |   | 1,055 |   |
| Licenses, patents and technology, net of amortization                                                                                                                                                                       |   |          | 12      |   |              |   | 62 |   |
| Inventories, non-current                                                                                                                                                                                                    |   |          | 785     |   |              |   | 785 |   |
| Total assets                                                                                                                                                                                                                |   | $             | 1,788   |   |              | $      | 2,057 |   |
|                                                                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Liabilities and Stockholders’ Deficit                                                                                                                                                                                 |   |          |    |   |              |   |   |   |
| Current Liabilities:                                                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Checks issued in excess of amounts on deposit                                                                                                                                                                               |   | $             | 2       |   |              | $      | — |   |
| Accounts payable                                                                                                                                                                                                            |   |          | 1,665   |   |              |   | 1,765 |   |
| Accrued payroll costs                                                                                                                                                                                                       |   |          | 1,642   |   |              |   | 1,395 |   |
| Advances payable to related parties                                                                                                                                                                                         |   |          | 2,181   |   |              |   | 1,766 |   |
| Accrued expenses                                                                                                                                                                                                            |   |          | 649     |   |              |   | 597 |   |
| Derivative liability                                                                                                                                                                                                        |   |          | — |   |              |   | 99 |   |
| Notes payable                                                                                                                                                                                                               |   |          | 89      |   |              |   | 175 |   |
| Total current liabilities                                                                                                                                                                                                   |   |          | 6,228   |   |              |   | 5,797 |   |
|                                                                                                                                                                                                                        |   |          |    |   |              |   |   |   |
| Stockholders’ Deficit:                                                                                                                                                                                                |   |          |    |   |              |   |   |   |
| Preferred stock, $0.001 par value; 10,000,000 shares authorized; 373,555 shares issued and outstanding at June 30, 2011 and December 31, 2010 (Liquidation value of all classes of preferred stock $2,876 at June 30, 2011) |   |          | 1,492   |   |              |   | 1,492 |   |
| Common stock, $0.001 par value; 500,000,000 shares authorized; 58,997,956 and 48,379,042 shares issued or issuable and 58,978,747 and 48,359,833 shares outstanding at June 30, 2011 and December 31, 2010, respectively    |   |          | 59      |   |              |   | 48 |   |
| Additional paid-in-capital                                                                                                                                                                                                  |   |          | 92,852  |   |              |   | 92,572 |   |
| Treasury stock: 19,209 shares at June 30, 2011 and December 31, 2010                                                                                                                                                        |   |          | (327    | )      |              |   | (327 | ) |
| Accumulated deficit                                                                                                                                                                                                         |   |          | (98,438 | )      |              |   | (97,448 | ) |
| Accumulated comprehensive loss—                                                                                                                                                                                       |   |          |    |   |              |   |   |   |
| Cumulative translation adjustment                                                                                                                                                                                           |   |          | (78     | )      |              |   | (77 | ) |
| Total stockholders’ deficit                                                                                                                                                                                           |   |          | (4,440  | )      |              |   | (3,740 | ) |
| Total liabilities and stockholders’ deficit                                                                                                                                                                           |   | $             | 1,788   |   |              | $      | 2,057 |   |

----

|                                                                                                    |   | Six months ended |       |   | Three months ended |   |
|---------------------------------------------------------------------------------------------------------|--------|------------------|------------|--------|--------------------|--------|
|                                                                                                    |   | June 30,         |       |   | June 30,           |   |
|                                                                                                    |   | 2011             |       |   | 2010               |   |   | 2011 |   |   | 2010 |   |
|                                                                                                    |   | (Unaudited)      |       |   | (Unaudited)        |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |
| Net revenues                                                                                            |   | $                | 14         |   |               | $      | 16 |   |   | $ | 7 |   |   | $ | 8 |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                                                                      |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Cost of revenues                                                                                        |   |             | —    |   |               |   | — |   |   |   | — |   |   |   | — |   |
| Research and development, net of settlement of trade debt of $15 for the six months ended June 30, 2011 |   |             | 115        |   |               |   | 130 |   |   |   | 64 |   |   |   | 65 |   |
| Selling, general and administrative                                                                     |   |             | 833        |   |               |   | 802 |   |   |   | 411 |   |   |   | 303 |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total operating expenses                                                                                |   |             | 948        |   |               |   | 932 |   |   |   | 475 |   |   |   | 368 |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Operating loss                                                                                          |   |             | (934       | )      |               |   | (916 | ) |   |   | (468 | ) |   |   | (360 | ) |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                                                                                  |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Benefit from derivative liability                                                                       |   |             | 30         |   |               |   | 182 |   |   |   | 17 |   |   |   | 93 |   |
| Interest expense – related party                                                                  |   |             | (79        | )      |               |   | — |   |   |   | (42 | ) |   |   | — |   |
| Interest expense                                                                                        |   |             | (7         | )      |               |   | (28 | ) |   |   | 1 |   |   |   | (26 | ) |
| Total other income (expense)                                                                            |   |             | (56        | )      |               |   | 154 |   |   |   | (24 | ) |   |   | 67 |   |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                |   |             | (990       | )      |               |   | (762 | ) |   |   | (492 | ) |   |   | (293 | ) |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividend                                                                                |   |             | (132       | )      |               |   | (132 | ) |   |   | (66 | ) |   |   | (66 | ) |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Net loss applicable to common stockholders                                                              |   | $                | (1,122     | )      |               | $      | (894 | ) |   | $ | (558 | ) |   | $ | (359 | ) |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per common share                                                             |   | $                | (0.02      | )      |               | $      | (0.02 | ) |   | $ | (0.01 | ) |   | $ | (0.01 | ) |
|                                                                                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average number of common shares outstanding                                  |   |             | 52,849,015 |   |               |   | 45,383,764 |   |   |   | 55,271,305 |   |   |   | 46,419,294 |   |

----

|                                                                                                                           |   | Six Months Ended |    |
|--------------------------------------------------------------------------------------------------------------------------------|--------|------------------|---------|
|                                                                                                                           |   | June 30,         |    |
|                                                                                                                           |   | 2011             |    |   | 2010 |   |
|                                                                                                                           |   |             |    |   |   |   |
| Operating Activities:                                                                                                          |   |             |    |   |   |   |
| Net loss                                                                                                                       |   | $                | (990    | ) |   | $ | (762 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:                                                    |   |             |    |   |   |   |   |   |
| Depreciation and amortization                                                                                                  |   |             | 244     |   |   |   | 247 |   |
| Amortization of discount                                                                                                       |   |             | — |   |   |   | 22 |   |
| Common stock issued to non-employees for services                                                                              |   |             | — |   |   |   | 6 |   |
| Common stock issued for compensation expense                                                                                   |   |             | 18      |   |   |   | 15 |   |
| Non-cash compensation expense                                                                                                  |   |             | — |   |   |   | 1 |   |
| Benefit from derivative liability                                                                                              |   |             | (30     | ) |   |   | (182 | ) |
| Interest expense imputed on related party advances                                                                             |   |             | 79      |   |   |   | — |   |
| Common stock to be issued for services                                                                                         |   |             | 66      |   |   |   | — |   |
| Gain on settlement of trade indebtedness                                                                                       |   |             | (15     | ) |   |   | — |   |
| Changes in assets and liabilities:                                                                                             |   |             |    |   |   |   |   |   |
| Checks issued in excess of amounts on deposit                                                                                  |   |             | 2       |   |   |   | 6 |   |
| Accounts receivable                                                                                                            |   |             | 2       |   |   |   | 14 |   |
| Inventories                                                                                                                    |   |             | — |   |   |   | 3 |   |
| Prepaid expenses and other current assets                                                                                      |   |             | 10      |   |   |   | 23 |   |
| Accounts payable                                                                                                               |   |             | (87     | ) |   |   | (157 | ) |
| Accrued expenses                                                                                                               |   |             | 305     |   |   |   | 141 |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Net cash used in operating activities                                                                                          |   |             | (396    | ) |   |   | (623 | ) |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Investing activities:                                                                                                          |   |             |    |   |   |   |   |   |
| Purchase of license                                                                                                            |   |             | — |   |   |   | (20 | ) |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Net cash used in investing activities                                                                                          |   |             | — |   |   |   | (20 | ) |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Financing activities:                                                                                                          |   |             |    |   |   |   |   |   |
| Proceeds from related parties                                                                                                  |   |             | 415     |   |   |   | 518 |   |
| Proceeds from issuance of convertible note                                                                                     |   |             | — |   |   |   | 75 |   |
| Proceeds from sale of common stock                                                                                             |   |             | — |   |   |   | 50 |   |
| Repayment of notes                                                                                                             |   |             | (32     | ) |   |   | — |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Net cash provided by financing activities                                                                                      |   |             | 383     |   |   |   | 643 |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                                                           |   |             | (13     | ) |   |   | — |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Cash and cash equivalents at the beginning of period                                                                           |   |             | 13      |   |   |   | — |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                                                     |   | $                | — |   |   | $ | — |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                                              |   |             |    |   |   |   |   |   |
|                                                                                                                           |   |             |    |   |   |   |   |   |
| Non-cash transactions during the period for:                                                                                   |   |             |    |   |   |   |   |   |
| Issuance of common stock and warrants in settlement of a lawsuit                                                               |   | $                | — |   |   | $ | 538 |   |
| Stock issuable for liability                                                                                                   |   |             | — |   |   |   | 30 |   |
| Warrants exercised with debt in satisfaction of related party advances                                                         |   |             | — |   |   |   | 121 |   |
| Intangible cost included in accounts payable                                                                                   |   |             | — |   |   |   | 80 |   |
| Conversion of debt and accrued interest to common stock                                                                        |   |             | 59      |   |   |   | — |   |
| Reclassification of liability (relating to variable conversion feature) to additional paid-in- capital upon conversion of debt |   |             | 55      |   |   |   | — |   |
| Reclassification of excess share derivative liability to additional paid-in capital                                            |   |             | 14      |   |   |   | — |   |

----

| Note 1. | Organization |
|---------|--------------|

| Note 2. | Basis of Presentation |
|---------|-----------------------|

|                                                                   |   | Six months ended |       |
|------------------------------------------------------------------------|--------|------------------|------------|
|                                                                   |   | June 30,         |       |
|                                                                   |   | 2011             |       |   | 2010 |   |
|                                                              |   | (Unaudited)      |       |   |   |   |
|                                                                   |   |             |       |   |   |   |
| Net loss applicable to common stockholders                             |   | $                | (1,122     | ) |   | $ | (894 | ) |
| Foreign currency adjustment                                            |   |             | (1         | ) |   |   | — |   |
| Comprehensive net loss applicable to common stockholders               |   | $                | (1,123     | ) |   | $ | (894 | ) |
|                                                                   |   |             |       |   |   |   |   |   |
| Basic and diluted comprehensive net loss per common share              |   | $                | (0.02      | ) |   | $ | (0.02 | ) |
| Basic and diluted weighted average number of common shares outstanding |   |             | 52,849,015 |   |   |   | 45,383,764 |   |

----

| Note 3. | Inventory |
|---------|-----------|

|                        |   | June 30,    |   |   | December 31, |   |
|-----------------------------|--------|-------------|--------|--------|--------------|--------|
|                        |   | 2011        |   |   | 2010         |   |
|                        |   | (unaudited) |   |   |         |   |
|                        |   |        |   |   |         |   |
| Purchased parts             |   | $           | 269    |   |         | $      | 269 |   |
| Finished goods              |   |        | 624    |   |         |   | 624 |   |
| Total inventory             |   |        | 893    |   |         |   | 893 |   |
| Less: inventory non-current |   |        | 785    |   |         |   | 785 |   |
| Total inventory current     |   | $           | 108    |   |         | $      | 108 |   |

| Note 4. | Fixed Assets |
|--------------|--------------|

|                                           |   | June 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 |   |        | (1,936 | )      |         |   | (1,742 | ) |
| Total                                          |   | $           | 861    |   |         | $      | 1,055 |   |

| Note 5. | Licenses, Patents, and Technology |
|--------------|-----------------------------------|

|                          |   | June 30,    |   |   | December 31, |   |
|-------------------------------|--------|-------------|--------|--------|--------------|--------|
|                          |   | 2011        |   |   | 2010         |   |
|                          |   | (unaudited) |   |   |         |   |
|                          |   |        |   |   |         |   |
| Licenses                      |   | $           | 320    |   |         | $      | 320 |   |
| Patent costs                  |   |        | 133    |   |         |   | 133 |   |
| LabCorp Technology Agreement  |   |        | 260    |   |         |   | 260 |   |
|                          |   |        | 713    |   |         |   | 713 |   |
| Less accumulated amortization |   |        | (701   | )      |         |   | (651 | ) |
| Total                         |   | $           | 12     |   |         | $      | 62 |   |

----

| Note 6. | Accrued Expenses |
|---------|------------------|

|                              |   | June 30,    |   |   | December 31, |   |
|-----------------------------------|--------|-------------|--------|--------|--------------|--------|
|                              |   | 2011        |   |   | 2010         |   |
|                              |   | (unaudited) |   |   |         |   |
|                              |   |        |   |   |         |   |
| Accrued interest                  |   | $           | 56     |   |         | $      | 60 |   |
| Accrued franchise and other taxes |   |        | 322    |   |         |   | 268 |   |
| Accrued compensation              |   |        | 120    |   |         |   | 90 |   |
| Other accrued expenses            |   |        | 151    |   |         |   | 179 |   |
| Total                             |   | $           | 649    |   |         | $      | 597 |   |

| Note 7. | Notes Payable and Advances-related parties |
|---------|--------------------------------------------|

|                                                                                                                                                                                                       |   | June 30,    |    |   | December 31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
|                                                                                                                                                                                                       |   | 2011        |    |   | 2010         |   |
|                                                                                                                                                                                                       |   | (Unaudited) |    |   |         |   |
|                                                                                                                                                                                                       |   |        |    |   |         |   |
| 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; interest imputed at 5% per annum, due August 24, 2011 |   |        | 19      |   |         |   | 49 |   |
|                                                                                                                                                                                                       |   |        |    |   |         |   |   |   |
| Robert Shaw, $25,000 Promissory Note issued September 20, 2001; interest rate 9% per annum, due December 20, 2001.                                                                                         |   |        | 15      |   |         |   | 15 |   |
|                                                                                                                                                                                                       |   |        |    |   |         |   |   |   |
| Ventana Medical Systems, Inc. $62,946 Promissory Note issued November 30, 2003; due December 31, 2003; interest rate 8% per annum payable after December 31, 2003                                          |   |        | 21      |   |         |   | 21 |   |
|                                                                                                                                                                                                       |   |        |    |   |         |   |   |   |
| Xillix Technologies Corporation $361,000 Promissory Note issued June 26, 1998; Interest rate Canadian Prime plus 6% per annum, due December 27, 1999; represents a debt of AccuMed                         |   |        | 34      |   |         |   | 34 |   |
|                                                                                                                                                                                                       |   | $           | 89      |   |         | $      | 175 |   |

----

| Note 8. | Stockholders’ Equity (Deficit) |
|---------|--------------------------------------|

|                                       |   | Six months ended |       |   | Three months ended |   |
|--------------------------------------------|--------|----------------------------|------------|--------|------------------------------|--------|
|                                       |   | June 30, 2011    |       |   | June 30, 2010      |   |   | June 30, 2011 |   |   | June 30, 2010 |   |
|                                       |   | (unaudited)                |       |   | (unaudited)                  |   |
| Basic and Diluted:                         |   |                       |       |   |                         |   |   |   |   |   |   |   |
| Net loss applicable to common stockholder  |   | $                          | (1,122     | )      |                         | $      | (894 | ) |   | $ | (558 | ) |   | $ | (359 | ) |
| Weighted average common shares outstanding |   |                       | 52,849,015 |   |                         |   | 45,383,764 |   |   |   | 55,271,305 |   |   |   | 46,419,294 |   |
| Net loss per common share                  |   | $                          | (0.02      | )      |                         | $      | (0.02 | ) |   | $ | (0.01 | ) |   | $ | (0.01 | ) |

|                                          |   | June 30,                 |    |   | December 31,             |   |
|-----------------------------------------------|--------|-------------------------------|---------|--------|-------------------------------|--------|
|                                          |   | 2011                          |    |   | 2010                          |   |
|                                          |   | Shares Issued & |    |   | Shares Issued & |   |
| Offering                                      |   | Outstanding                   |    |   | Outstanding                   |   |
|                                          |   | (unaudited)                   |    |   |                          |   |
|                                          |   |                          |    |   |                          |   |
| Series A convertible                          |   |                          | 47,250  |   |                          |   | 47,250 |   |
| Series B convertible, 10% cumulative dividend |   |                          | 93,750  |   |                          |   | 93,750 |   |
| Series C convertible, 10% cumulative dividend |   |                          | 38,333  |   |                          |   | 38,333 |   |
| Series D convertible, 10% cumulative dividend |   |                          | 175,000 |   |                          |   | 175,000 |   |
| Series E convertible, 10% cumulative dividend |   |                          | 19,222  |   |                          |   | 19,222 |   |
| Total Preferred Stock                         |   |                          | 373,555 |   |                          |   | 373,555 |   |

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| Series A Convertible Preferred Stock                                            |
|---------------------------------------------------------------------------------|
| Liquidation Value:                                                              | $4.50 per share, $212,625 |
| Conversion Price:                                                               | $103.034 per share |
| Conversion Rate:                                                                | 0.04367—Liquidation Value divided by Conversion Price ($4.50/$103.034) |
| Voting Rights:                                                                  | None |
| Dividends:                                                                      | None |
| Conversion Period:                                                              | Any time |
|                                                                            |   |
| Series B Convertible Preferred Stock                                            |
| Liquidation Value:                                                              | $4.00 per share, $375,000 |
| Conversion Price:                                                               | $10.00 per share |
| Conversion Rate:                                                                | 0.40—Liquidation Value divided by Conversion Price ($4.00/$10.00) |
| Voting Rights:                                                                  | None |
| Dividends:                                                                      | 10%—Quarterly—Commencing March 31, 2001 |
| Conversion Period:                                                              | Any time |
| Cumulative and undeclared dividends in arrears at June 30, 2011 were $388,000   |
|                                                                            |   |
| Series C Convertible Preferred Stock                                            |
| Liquidation Value:                                                              | $3.00 per share, $115,000 |
| Conversion Price:                                                               | $6.00 per share |
| Conversion Rate:                                                                | 0.50—Liquidation Value divided by Conversion Price ($3.00/$6.00) |
| Voting Rights:                                                                  | None |
| Dividends:                                                                      | 10%—Quarterly—Commencing March 31, 2002 |
| Conversion Period:                                                              | Any time |
| Cumulative and undeclared dividends in arrears at June 30, 2011 were $111,000   |
|                                                                            |   |
| Series D Convertible Preferred Stock                                            |
| Liquidation Value:                                                              | $10.00 per share, $1,750,000 |
| Conversion Price:                                                               | $10.00 per share |
| Conversion Rate:                                                                | 1.00—Liquidation Value divided by Conversion Price ($10.00/$10.00) |
| Voting Rights:                                                                  | None |
| Dividends:                                                                      | 10%—Quarterly—Commencing April 30, 2002 |
| Conversion Period:                                                              | Any time |
| Cumulative and undeclared dividends in arrears at June 30, 2011 were $1,692,000 |
|                                                                            |   |
| Series E Convertible Preferred Stock                                            |
| Liquidation Value:                                                              | $22.00 per share, $422,888 |
| Conversion Price:                                                               | $8.00 per share |
| Conversion Rate:                                                                | 2.75—Liquidation Value divided by Conversion Price ($22.00/$8.00) |
| Voting Rights:                                                                  | Equal in all respects to holders of common shares |
| Dividends:                                                                      | 10%—Quarterly—Commencing May 31, 2002 |
| Conversion Period:                                                              | Any time |
| Cumulative and undeclared dividends in arrears at June 30, 2011 were $412,000   |

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|                                             |   | 2011   |              |   | 2010   |   |
|--------------------------------------------------|--------|--------|-------------------|--------|--------|--------|
| Expected volatility                              |   |   | 36%-420           | %      |   |   | 240%-250 | % |
| Expected term (years)                            |   |   | 0.04 – 2.51 |   |   |   | 1.5 |   |
| Risk-free interest rate                          |   |   | 1.00              | %      |   |   | 1.00 | % |
| Expected dividend yield                          |   |   | 0                 | %      |   |   | 0 | % |
| Forfeiture rate                                  |   |   | 0                 | %      |   |   | 0 | % |
| Resulting weighted average grant date fair value |   | $      | 0.02              |   |   | $      | 0.15 |   |

| Note 9. | Derivative Liability |
|---------|----------------------|

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| Note 10.  | Legal Proceedings |
|----------------|-------------------|

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| Exhibit |         |                                                                                                                                                                                                                                                           |
|---------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |         | Description                                                                                                                                                                                                                                                    |
|    |         |                                                                                                                                                                                                                                                           |
| 31.1    |         | Section 302 certification by chief executive officer and chief financial officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted  pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
|    |         |                                                                                                                                                                                                                                                           |
| 32.1    |    | Section 906 certification by chief executive officer and chief financial officer pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                          |
|    |         |                                                                                                                                                                                                                                                           |
| 101.INS |         | XBRL Instance Document.                                                                                                                                                                                                                                        |
|    |         |                                                                                                                                                                                                                                                           |
| 101.SCH |         | XBRL Taxonomy Extension Schema.                                                                                                                                                                                                                                |
|    |         |                                                                                                                                                                                                                                                           |
| 101.CAL |         | XBRL Taxonomy Extension Calculation Linkbase.                                                                                                                                                                                                                  |
|    |         |                                                                                                                                                                                                                                                           |
| 101.DEF |         | XBRL Taxonomy Extension Definition Linkbase.                                                                                                                                                                                                                   |
|    |         |                                                                                                                                                                                                                                                           |
| 101.LAB |         | XBRL Taxonomy Extension Label Linkbase.                                                                                                                                                                                                                        |
|    |         |                                                                                                                                                                                                                                                           |
| 101.PRE |         | XBRL Taxonomy Extension Presentation Linkbase.                                                                                                                                                                                                                 |

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|   | CytoCore, Inc.                |
|--------|-------------------------------|
|   |                          |
|   | /s/ Robert F. McCullough, Jr. |   |
|   | Robert F. McCullough, Jr.     |
|   | Chief Executive Officer and   |
|   | Chief Financial Officer       |

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| Exhibit |         |                                                                                                                                                                                                                                                           |
|---------|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  |         | Description                                                                                                                                                                                                                                                    |
|    |         |                                                                                                                                                                                                                                                           |
| 31.1    |         | Section 302 certification by chief executive officer and chief financial officer pursuant to Rules 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted  pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
|    |         |                                                                                                                                                                                                                                                           |
| 32.1    |    | Section 906 certification by chief executive officer and chief financial officer pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.                                                          |

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