In recent months

Cyber-Care

(CYBR) - Get Report

, which bills itself as a technology-assisted health-management company, has issued no fewer than 10 press releases touting its new Electronic HouseCall System, a patented Internet-based technology system that provides remote monitoring of individuals for health care purposes. This new product represents much of the hype that has driven the company's market value in recent months to $875 million, or a robust 22-times sales on no profit. (Never mind that

Eastman Kodak

(EK)

already is on market with a rival product.)

Just one problem for Cyber-Care: Its heavily promoted version of the product hasn't been approved by the FDA, which means Cyber-Care isn't supposed to be promoting it -- or at least not promoting it the way it has been.

Yep, it's one of

those

kind of stories with just enough twists to make it fun.

This, after all, is the same company that recently took a hit when it was disclosed that its public relations adviser also moonlighted as an analyst recommending the company's stock. Cyber-Care officials claimed they were so busy they didn't know the PR guy was also parading as an analyst recommending the stock.

So, the question is: If Cyber-Care shouldn't be promoting a product that hasn't yet received FDA approval, why are sales of the product being promoted in press releases? One recent release, for example, said that

Metropolitan Health Networks

(MDPA)

"has agreed to purchase, pending FDA approval, 2,500

Electronic HouseCall System units in the next 12 to 18 months and an additional 10,000 units over 24 to 36 months." FDA regulations require what's known as 510K marketing approval before any medical device can be sold, marketed or publicized.

According to a Cyber-Care spokesman, however, the FDA granted the company an "Investigational Device Exemption," which means (according to the company) that "as long as you put in this language about the product pending FDA approval, everything is fine." The spokesman added that Cyber-Care's attorneys have reviewed and approved each press release -- even some, apparently, that didn't mention the product is pending FDA approval.

"We aren't even sure we need FDA approval," Cyber-Care general counsel Danny Bivins told my assistant Mark Martinez during one of several conversations last Friday. "We sought FDA approval just to make sure."

Mark then told Bivins what the FDA had said about what a company can and cannot do before it gets 510K marketing approval -- even with an exemption. According to an FDA spokesperson who declined to discuss Cyber-Care specifically, "a company cannot take orders, take names, or take phone numbers" until it gets 510K approval.

Still, Bivins said the company's announcements about deals with Metropolitan Health (also known as Metcare) and other companies were within the limits of its exemption. So did Dana Pusateri, another Cyber-Care official, who said, "We have talked with the FDA and they say that as long as you put in this language

that FDA approval is pending everything is fine."

Now comes the first twist: A Washington, D.C., attorney who specializes in FDA regulations told Mark that even with the exemption, Cyber-Care's press releases go beyond what is normally considered acceptable. "If you are taking orders, that is starting the process of selling," he said. "And you cannot do that."

Twist No. 2: Later Friday Mark caught up with Bivins again. This time Bivins said there had been a misunderstanding about the Metcare agreement. After having had a chance to review the facts, he said the Metcare agreement doesn't concern a product that's awaiting FDA approval. That was actually "a low-end product," Bivins said.

"So that (the FDA approval language) was an error in the press release?" Mark asked?

"We do it

the approval language by default; that was just an error," Bivins replied.

Ditto for all of the other press releases and product touts? "They were

all

for a low end product?" Mark wondered. "Pending orders are not even related to the Electronic HouseCall System units that need FDA approval?" queried Mark.

In response, Bivins agreed that none of the products being touted required the FDA approval.

What's more -- and this is very important -- Bivins says it wouldn't be good for Cyber-Care to be taking orders for a product that has not yet received FDA approval. "We want to do the right thing," he says.

Maybe Cyber-Care wants to do the right thing, but back on Jan. 13 it announced that

Health System One

would be purchasing 1,000 units of its Electronic HouseCall System, pending FDA approval.

Is that for the same Electronic HouseCall System that is awaiting FDA approval?

"Yes," says Kelly Walker, a spokeswoman for Health System One.

You as confused as we are? Well, then one final note: Bivins warned Mark that some of our short-selling sources might have agendas, and that some of them "might be feeding you misinformation" about the company. Bivins just wanted to let Mark know -- in case we didn't know that short-selling sources could be leading us down the wrong path, because "We heard there are reporters who are linked to short-sellers; that has been alleged to us ... Not saying you guys."

Where did Bivins hear that? After two seconds of silence, Bivins said: "People have told us that."

Boy, who woulda thunk? Consider it duly noted.

(Something tells me the

Hostile React-O-Meter spins outta control on this one,

outta control I tell ya!

)

Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

herb@thestreet.com. Greenberg also writes a monthly column for Fortune.

Mark Martinez assisted with the reporting of this column.