BALANCE SHEET COMPONENTS

6 Months Ended

Oct. 31, 2011

Notes to Financial Statements

BALANCE SHEET COMPONENTS

Inventory

The Company operates in an industry characterized by rapid improvements and changes to its technology and products. The introduction of new products by the Company or its competitors can result in its inventory being rendered obsolete or it being required to sell items at a discount. The Company evaluates the recoverability of its inventory by reference to its internal estimates of future demands and product life cycles. If the Company incorrectly forecasts demand for its products or inadequately manages the introduction of new product lines, the Company could materially impact its financial statements by having excess inventory on hand. The Company's future estimates are subjective and actual results may vary. During the three months ended October 31, 2011, the company reclassified approximately $90,000 of Perflurocarbon raw material out of raw materials inventory into other current assets as it continues its reformulation of the Dermacyte cosmetic line.

Inventories are recorded at cost using the First-In-First-Out ("FIFO") method. Ending inventories are comprised of raw materials and direct costs of manufacturing and are valued at the lower of cost or market. Inventories consisted of the following as of October 31, 2011 and April 30, 2011:

	October 31, 2011		April 30, 2011
Raw materials	$	25,855	$	107,271
Work in process		—		124,308
Finished goods		69,865		25,803
	$	95,720	$	257,382

Other Current assets 

Other current assets consist of the following as of October 31,2011 and April 30, 2011:

	October 31, 2011		April 30, 2011
R&D materials	$	145,714	$	—
Dermacyte samples		53,957		1,052
Other		83,609		7,090
	$	283,280	$	8,142

Property and equipment, net

Property and equipment consist of the following as of October 31, 2011 and April 30, 2011:

	October 31, 2011			April 30, 2011
Laboratory equipment	$	961,078		$	970,463
Office furniture and fixtures		140,255			140,255
Computer equipment and software		152,024			153,234
Leasehold improvements		4,810			4,810
		1,258,167			1,268,762
Less: Accumulated depreciation and amortization		(907,097	)		(826,176	)
	$	351,070		$	442,586

Depreciation and amortization expense was approximately $50,000 and $40,000 for the three months ended October 31, 2011 and 2010, respectively, and approximately $100,000 and $80,000 for the six months ended October 31, 2011 and 2010, respectively.

Other assets

Other assets consist of the following as of October 31, 2011 and April 30, 2011:

	October 31, 2011		April 30, 2011
Reimbursable patent expenses- Glucometrics	$	88,087	$	82,522
Prepaid royalty fee		50,000		50,000
Other		11,565		15,086
	$	149,652	$	147,608

Accrued liabilities

Accrued liabilities consist of the following as of October 31, 2011 and April 30, 2011:

	October 31, 2011		April 30, 2011
Section 409A tax liability	$	532,350	$	532,350
Deferred government grant revenue		310,000		—
Employee related		303,237		493,640
Legal		27,248		—
Clinical trial related		41,908		150,000
Other		92,460		74,583
	$	1,307,203	$	1,250,573