In trying to understand your $6M Q3 and $12M YTD loss prediction, it looks like your basis was from the total loss YTD of $6.1M reported in Q2. However, that quarter by itself did have a large amount of one-time with the single largest being the issued options. Here's a quote from the Q2 report on Net Loss:
"The net loss applicable to common shareholders was $4,009,697 for the three months ended June 30, 2011 compared to net a loss of $814,298 for the same three month period in 2010. As discussed above, the significantly higher net loss was primarily due to (i) the expensing of stock options issued to directors, employees and professional advisors, (ii) the charge resulting from triggered anti-dilution provisions within certain convertible debt agreements, (iii) fair value changes within derivative instruments, (iv) higher interest expenses, (v) higher other operating, sales and administrative expenses, offset by higher gross profits on sales of our products."
With regard to the options, this quote from Q2 report can help explain the valuation on the books:
"Stock Option Plan. In June 2011, the Company’s Board of Directors approved a stock option plan authorizing the award of up to 100,000,000 options to purchase common shares as incentive stock options or non-qualified stock options at exercise prices, vesting periods and terms (up to 10 years) as determined by the Board of Directors or a designated committee. In June 2011, the Board of Directors awarded 5,295,000 options to directors, employees and consultants, exercisable at $0.40 per share over 5 years with immediate vesting as compensation for past services. The closing market price of the Company’s common stock on the award date was $0.32 per share. Based on application of the Black Sholes pricing model, the Company determined the value of the options awarded to be $1,691,126 and expensed this amount as operating, sales and administrative expenses on the date of grant."
Remember, they have to pay .40 per share to exercise those options. Hopefully, a good sign on what insiders see in out years for the business.