NOTES TO FINANCIAL STATEMENTS
(Information as of March 31, 2004 and for
the three months ended
March 31, 2003 and 2004 is
Basic loss per common share is computed by
dividing the net loss for the period by the weighted average
number of common shares outstanding during the period. Diluted
loss per share is computed by dividing the loss for the period
by the weighted average number of common and common equivalent
shares outstanding during the period.
The Company has excluded all preferred stock,
outstanding options and warrants, and shares subject to
repurchase from the calculation of diluted loss per common share
because all such securities are antidilutive for all periods
In accordance with SFAS No. 109,
Accounting for Income Taxes, a deferred income tax asset
or liability is determined based on the difference between the
financial statement and tax basis of assets and liabilities as
measured by the enacted tax rates that will be in effect when
these differences reverse. The Company provides a valuation
allowance against net deferred income tax assets unless, based
upon available evidence, it is more likely than not the deferred
income tax assets will be realized.
Costs related to filing and pursuing patent
applications are expensed as incurred, as recoverability of such
expenditures is uncertain.
Comprehensive Income (Loss)
Comprehensive income (loss) generally represents
all changes in stockholders equity except those resulting
from investments by stockholders, and includes the
Companys unrealized losses on marketable securities of
$59,041 during the three months ended March 31, 2004.
Certain amounts in the prior year financial
statements have been reclassified to conform to current year
Short-term investments consist of $5,035,269 of
corporate debt securities and $89,096 of related accrued
interest at December 31, 2003, and $4,976,228 and $85,758,
respectively, at March 31, 2004.