Utah
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87-0627421
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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10200 Innovation Drive, Suite 300, Milwaukee, WI
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53226
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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(Do not check if a smaller reporting company)
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Page
|
|
EXPLANATORY NOTE
|
2 |
PART I. FINANCIAL INFORMATION
|
3
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Item 1. Financial Statements
|
3
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Condensed Consolidated Balance Sheets:
June 30, 2011(Unaudited) and December 31, 2010
|
3
|
|
|
Condensed Consolidated Statements of Operations (Unaudited):
Three And Six Months Ended June 30, 2011 and 2010
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4
|
|
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Condensed Consolidated Statement of Stockholders’ Equity (Unaudited):
Year ended December 31, 2010
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5
|
|
|
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited):
January 1, 2011 through June 30, 2011
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6
|
|
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Condensed Consolidated Statements of Cash Flows (Unaudited):
Six Months Ended June 30, 2011 and 2010
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7
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Notes to Condensed Consolidated Financial Statements (Unaudited):
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9
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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29
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Item 4. Controls and Procedures
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35
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PART II. OTHER INFORMATION
|
36
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Item 1. Legal Proceedings
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36
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Item 1A. Risk Factors
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37
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Item 2. Unregistered Sales of Equity Securities
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37
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Item 6. Exhibits
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37
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·
|
The Company had understated accrued sales tax, penalties, interest and related expenses.
|
·
|
Incorrect application of Accounting Standards Codification (ASC) 450, Accounting for Contingencies, resulted in an understatement of accrued warranty and related expenses.
|
·
|
Incorrect application of ASC 840, Accounting for Leases, resulted in an understatement of deferred lease liability and related rent expense.
|
·
|
Errors related to improper recording of depreciation expense and related understatement of, accumulated depreciation.
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·
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Errors related to improper recording of various accrued liabilities and expenses, as well as other current liabilities, resulting in a net understatement of such liabilities and related expenses.
|
·
|
Additionally, certain reclassifications have been made to previously reported unaudited condensed consolidated financial statements.
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(Unaudited)
June 30, 2011
(As Restated)
|
December 31, 2010
(As Restated)
|
|||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents
|
$
|
882,484
|
$
|
136,030
|
||||
Accounts receivable, net
|
1,245,055
|
799,185
|
||||||
Inventories
|
595,968
|
599,402
|
||||||
Prepaid expenses
|
231,237
|
163,327
|
||||||
Total current assets
|
2,954,744
|
1,697,944
|
||||||
Property and equipment, net
|
29,343
|
43,329
|
||||||
Other assets:
|
||||||||
Deferred financing costs, net
|
-
|
56,732
|
||||||
Goodwill
|
11,670,446
|
11,670,446
|
||||||
Intangible assets, net
|
1,862,817
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1,983,657
|
||||||
Deposits
|
34,238
|
34,238
|
||||||
Total other assets
|
13,567,501
|
13,745,073
|
||||||
Total Assets
|
$
|
16,551,588
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$
|
15,486,346
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,871,198
|
$
|
2,402,950
|
||||
Accrued liabilities and expenses
|
1,953,816
|
1,890,951
|
||||||
Note payable – current
|
85,768
|
47,536
|
||||||
Note payable – related party
|
-
|
25,114
|
||||||
Convertible debentures, net of debt discounts of $134,625
|
-
|
1,471,398
|
||||||
Derivative liability – current
|
-
|
619,698
|
||||||
Other current liabilities
|
70,065
|
151,035
|
||||||
Total current liabilities
|
3,980,847
|
6,608,682
|
||||||
Long-term liabilities:
|
||||||||
Derivative liability – long term
|
-
|
1,282,077
|
||||||
Deferred lease liability
|
98,218
|
82,802
|
||||||
Note payable – long term
|
928,322
|
252,464
|
||||||
Total long-term liabilities
|
1,026,540
|
1,617,343
|
||||||
Redeemable preferred stock:
|
||||||||
Redeemable preferred stock, 15,000,000 shares authorized; par value $.001 per share; | ||||||||
Series A, 215 shares issued and outstanding at June 30, 2011 and December 31, 2010.
|
968,701
|
890,475
|
||||||
Series B, 538 shares issued and 533 shares outstanding at June 30, 2011, 267 shares issued and outstanding at December 31, 2010
|
1,363,222
|
653,371
|
||||||
Total redeemable preferred stock
|
2,331,923
|
1,543,846
|
||||||
Commitments and contingencies
|
-
|
-
|
||||||
Stockholders’ Equity
|
||||||||
Common stock, par value $.001 per share; 190,000,000 shares authorized; 102,037,171 and 101,258,725
shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively
|
102,039
|
101,261
|
||||||
Additional paid-in-capital
|
124,449,103
|
122,057,171
|
||||||
Accumulated deficit
|
(115,338,864)
|
(116,441,957)
|
||||||
Total stockholders’ equity
|
9,212,278
|
5,716,475
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
16,551,588
|
|
|
$
|
15,486,346
|
For The Three Months Ended
June 30,
|
For The Six Months Ended
June 30,
|
|||||||||||||||
2011
(As Restated)
|
2010
(As Restated)
|
2011
(As Restated)
|
2010
(As Restated)
|
|||||||||||||
Revenues, net:
|
||||||||||||||||
Product
|
$
|
1,776,888
|
$
|
1,970,286
|
$
|
3,127,960
|
$
|
3,536,737
|
||||||||
Recurring
|
1,151,048
|
1,122,371
|
2,282,675
|
2,073,029
|
||||||||||||
Total Revenue
|
2,927,936
|
3,092,657
|
5,410,635
|
5,609,766
|
||||||||||||
Cost of Sales:
|
||||||||||||||||
Product
|
1,017,894
|
938,305
|
1,726,164
|
1,789,482
|
||||||||||||
Recurring
|
291,247
|
321,190
|
555,116
|
620,301
|
||||||||||||
Total Cost of Sales
|
1,309,141
|
1,259,495
|
2,281,280
|
2,409,783
|
||||||||||||
Gross Profit
|
1,618,795
|
1,833,162
|
3,129,355
|
3,199,983
|
||||||||||||
|
|
|||||||||||||||
Operating Expenses:
|
||||||||||||||||
Research and development
|
182,625
|
293,579
|
391,234
|
588,196
|
||||||||||||
Selling, general and administrative
|
1,166,812
|
1,416,947
|
2,294,645
|
3,108,674
|
||||||||||||
Depreciation and amortization
|
68,818
|
95,207
|
130,346
|
193,034
|
||||||||||||
Total Operating Expenses
|
1,418,255
|
1,805,733
|
2,816,225
|
3,889,904
|
||||||||||||
Income (Loss) from Operations
|
200,540
|
27,429
|
313,130
|
(689,921)
|
||||||||||||
Other Income (Expenses):
|
||||||||||||||||
Interest expense, net
|
(23,740)
|
(165,265)
|
(213,974)
|
(341,921)
|
||||||||||||
Gain on derivative liability
|
-
|
541,326
|
172,476
|
696,793
|
||||||||||||
Gain on sale of product line
|
-
|
-
|
829,296
|
-
|
||||||||||||
Gain (loss) on disposal of property and equipment
|
-
|
(100,744)
|
2,165
|
(100,744)
|
||||||||||||
Total Other Income (Expense)
|
(23,740)
|
275,317
|
789,963
|
254,128
|
||||||||||||
Income (Loss) Before Provision for Income Taxes
|
176,800
|
302,746
|
1,103,093
|
(435,793)
|
||||||||||||
Provision for Income Taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net Income (Loss)
|
176,800
|
302,746
|
1,103,093
|
(435,793)
|
||||||||||||
Accretion of preferred dividends and discount
|
(170,800)
|
(39,347)
|
(313,867)
|
(78,460)
|
||||||||||||
Net income (loss) attributable to common stockholders
|
$
|
6,000
|
|
$
|
263,399
|
$
|
789,226
|
$
|
(514,253)
|
|||||||
Net income per common share:
|
||||||||||||||||
Income per common share– basic
|
$
|
0.00
|
$
|
0.00
|
$
|
0.01
|
$
|
0.00
|
||||||||
Income per common share - diluted
|
$
|
0.00
|
$
|
0.00
|
$
|
0.01
|
$
|
0.00
|
||||||||
Weighted Average Common Shares Outstanding – basic
|
102,878,097
|
96,916,357
|
101,556,654
|
96,714,804
|
||||||||||||
Weighted Average Common Shares Outstanding - diluted
|
104,404,580
|
97,140,595
|
103,083,137
|
96,714,804
|
Common
Shares
|
Common
Stock
Amount
|
Additional
Paid in
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||
Balance at January 1, 2010, as restated
|
96,563,771 | $ | 96,564 | $ | 120,194,142 | $ | (114,262,940 | ) | $ | 6,027,766 | ||||||||||
Shares issued to directors and management at approximately $0.19 per share
|
3,919,821 | 3,920 | 1,093,746 | - | 1,097,666 | |||||||||||||||
Shares issued to directors and management at approximately $0.165 per share
|
224,410 | 225 | 36,775 | - | 37,000 | |||||||||||||||
Shares issued in exchange for services rendered at approximately $0.19 per share
|
550,723 | 552 | 77,143 | - | 77,695 | |||||||||||||||
Stock-based compensation expense related to employee stock options
|
- | - | 132,386 | - | 132,386 | |||||||||||||||
Warrants issued with redeemable convertible preferred stock
|
- | - | 394,350 | - | 394,350 | |||||||||||||||
Beneficial conversion feature of redeemable convertible preferred stock
|
- | - | 394,350 | - | 394,350 | |||||||||||||||
Warrant repurchase and cancellation
|
- | - | (1,000 | ) | - | (1,000 | ) | |||||||||||||
Accretion of redeemable preferred stock discount
|
- | - | (135,638 | ) | - | (135,638 | ) | |||||||||||||
Accretion of redeemable preferred stock dividend
|
- | - | (129,083 | ) | - | (129,083 | ) | |||||||||||||
Net loss, as restated
|
(2,179,017 | ) | (2,179,017 | ) | ||||||||||||||||
Balance at December 31, 2010, as restated
|
101,258,725 | $ | 101,261 | $ | 122,057,171 | $ | (116,441,957 | ) | $ | 5,716,475 |
Common
Shares
|
Common
Stock
Amount
|
Additional
Paid in
Capital
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||
Balance at January 1, 2011, as restated | 101,258,725 | $ | 101,261 | $ | 122,057,171 | $ | (116,441,957 | ) | $ | 5,716,475 | ||||||||||
Shares issued to directors and management at approximately $0.135 per share
|
409,056 | 409 | 55,091 | - | 55,500 | |||||||||||||||
Shares issued to directors for consulting fees at approximately $0.15 per share (1)
|
177,083 | 177 | 24,823 | - | 25,000 | |||||||||||||||
Shares issued on conversion of preferred stock at approximately $0.18 per share
|
192,307 | 192 | 24,808 | - | 25,000 | |||||||||||||||
Stock-based compensation expense related to employee stock options
|
- | - | 15,988 | - | 15,988 | |||||||||||||||
Warrants issued with redeemable convertible preferred stock
|
- | - | 427,895 | - | 427,895 | |||||||||||||||
Beneficial conversion feature of redeemable convertible preferred stock
|
- | - | 427,895 | - | 427,895 | |||||||||||||||
Retirement of derivative liability related to warrant obligation
|
- | - | 1,729,299 | - | 1,729,299 | |||||||||||||||
Accretion of redeemable preferred stock discount
|
- | - | (193,797 | ) | - | (193,797 | ) | |||||||||||||
Accretion of redeemable preferred stock dividend
|
- | - | (120,070 | ) | - | (120,070 | ) | |||||||||||||
Net income, as restated
|
1,103,093 | 1,103,093 | ||||||||||||||||||
Balance at June 30, 2011, as restated
|
102,037,171 | $ | 102,039 | $ | 124,449,103 | $ | (115,338,864 | ) | $ | 9,212,278 |
For the Six Months
Ended June 30,
|
||||||||
2011
(As Restated)
|
2010
(As Restated)
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net income (loss)
|
$
|
1,103,093
|
$
|
(435,793
|
)
|
|||
Adjustments to reconcile net income (loss) from operations to cash (used in) provided by operating activities:
|
||||||||
Amortization of debt discounts and financing costs
|
191,357
|
254,120
|
||||||
Gain on sale of product line
|
(829,296
|
)
|
-
|
|||||
Gain on derivative liability
|
(172,476
|
)
|
(696,793
|
)
|
||||
(Gain) loss on disposal of property and equipment
|
(2,165
|
)
|
100,744
|
|||||
Stock based compensation expense
|
96,488
|
88,181
|
||||||
Depreciation
|
9,506
|
72,194
|
||||||
Amortization
|
120,840
|
120,840
|
||||||
Provision for doubtful accounts
|
(56,620
|
) |
31,879
|
|||||
Increase / decrease in:
|
||||||||
Accounts receivable, trade and other
|
(389,250
|
)
|
(762,451
|
)
|
||||
Inventories
|
(117,270
|
)
|
219,051
|
|||||
Prepaid expenses
|
(67,910
|
)
|
(187,713
|
)
|
||||
Other current liabilities
|
(80,970
|
)
|
42,212
|
|||||
Accounts payable, accrued liabilities & expenses, net
|
(468,887
|
)
|
1,019,019
|
|||||
Deferred lease liability
|
15,416
|
21,494
|
||||||
Net Cash Used In Operating Activities
|
(648,144
|
)
|
(113,016
|
)
|
||||
Cash Flows From Investing Activities:
|
||||||||
Proceeds on disposal of property and equipment
|
6,645
|
-
|
||||||
Proceeds from sale of product line
|
1,000,000
|
-
|
||||||
Net Cash Provided by Investing Activities
|
1,006,645
|
-
|
||||||
Cash Flows From Financing Activities:
|
||||||||
Repayment on line of credit
|
-
|
(288,417
|
)
|
|||||
Proceeds from issuance of note payable
|
700,000
|
-
|
||||||
Payments on note payable
|
(35,910
|
)
|
-
|
|||||
Payments on note payable – related party
|
(25,114
|
)
|
-
|
|||||
Proceeds from issuance of redeemable preferred stock
|
1,355,000
|
-
|
||||||
Repayment of convertible debentures
|
(1,606,023
|
)
|
-
|
|||||
Net Cash Provided By (Used In) Financing Activities
|
387,953
|
(288,417
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
746,454
|
(401,433
|
)
|
|||||
Cash and cash equivalents at the beginning of the period
|
136,030
|
|
503,870
|
|||||
Cash and cash equivalents at the end of the period
|
$
|
882,484
|
$
|
102,437
|
For the Six Months Ended
June 30,
|
||||||||
2011
(As Restated)
|
2010
(As Restated)
|
|||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash transactions:
|
||||||||
Cash paid during the period for interest expense
|
$
|
177,639
|
$
|
177,564
|
||||
Non-cash transactions:
|
||||||||
Issuance of common stock as consideration for accounts payable
|
$
|
-
|
$
|
62,957
|
||||
Issuance of note payable in conjunction with warrant cancellation
|
50,000
|
-
|
||||||
Beneficial conversion feature of redeemable convertible preferred stock
|
427,895
|
-
|
||||||
Value of warrants issued with redeemable convertible preferred stock
|
427,895
|
-
|
||||||
Accretion of discount on redeemable preferred stock
|
193,797
|
35,802
|
||||||
Accretion of dividend on redeemable preferred stock
|
120,070
|
42,658
|
||||||
Retirement of derivative liability related to warrant obligation
|
1,729,299
|
-
|
||||||
Conversion of preferred stock to common stock
|
25,000
|
-
|
2011
|
||||||||
For the
Three Months Ended
(Unaudited) |
For the
Six Months Ended
(Unaudited) |
|||||||
Increase in sales tax, related penalties and interest
|
$ | (43,118 | ) | $ | (79,679 | ) | ||
Incorrect application of ASC 840, Accounting for Leases, resulted in an overstatement of deferred lease liability
|
89,312 | 82,802 | ||||||
Decrease in depreciation expense related to recording depreciation expense in improper periods
|
17,417 | 34,834 | ||||||
Increase in expense related to improper recording of various accrued liabilities
|
- | (30,531 | ) | |||||
Total increase in net income for the stated period
|
$ | 63,611 | $ | 7,426 |
2010
|
||||||||
For the
Three Months Ended
(Unaudited) |
For the
Six Months Ended
(Unaudited) |
|||||||
Increase in sales tax, related penalties and interest
|
$ | (47,312 | ) | $ | (85,820 | ) | ||
Incorrect application of ASC 840, Accounting for Leases, resulted in an understatement of deferred lease liability
|
(10,747 | ) | (21,494 | ) | ||||
Increase in depreciation expense related to recording depreciation expense in improper periods
|
(17,417 | ) | (34,834 | ) | ||||
Increase in expense related to improper recording of various accrued liabilities
|
(105,344 | ) | (105,344 | ) | ||||
Total decrease in net income and increase in net loss, respectively for the stated period
|
$ | (180,820 | ) | $ | (247,492 | ) |
Effect on Condensed Consolidated Balance Sheets as of
|
||||||||||||||||||||||||
June 30, 2011 (Unaudited) |
December 31, 2010
|
|||||||||||||||||||||||
As Previously
Reported
|
As
Restated |
Effect of
Correction |
As Previously
Reported |
As
Restated |
Effect of
Correction |
|||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Prepaid expenses
|
$ | 265,475 | $ | 231,237 | $ | (34,238 | ) | $ | 197,565 | $ | 163,327 | $ | (34,238 | ) | ||||||||||
Total current assets
|
2,988,982 | 2,954,744 | (34,238 | ) | 1,732,182 | 1,697,944 | (34,238 | ) | ||||||||||||||||
Property and equipment, net
|
64,177 | 29,343 | (34,834 | ) | 112,997 | 43,329 | (69,668 | ) | ||||||||||||||||
Other assets:
|
||||||||||||||||||||||||
Deposits
|
- | 34,238 | 34,238 | - | 34,238 | 34,238 | ||||||||||||||||||
Total other assets
|
13,533,263 | 13,567,501 | 34,238 | 13,710,835 | 13,745,073 | 34,238 | ||||||||||||||||||
Total assets
|
16,586,422 | 16,551,588 | (34,834 | ) | 15,556,014 | 15,486,346 | (69,668 | ) | ||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Accrued liabilities and expenses
|
1,110,529 | 1,953,816 | 843,287 | 1,157,873 | 1,890,951 | 733,078 | ||||||||||||||||||
Other current liabilities
|
89,063 | 70,065 | (18,998 | ) | 170,033 | 151,035 | (18,998 | ) | ||||||||||||||||
Total current liabilities
|
3,156,558 | 3,980,847 | 824,289 | 5,894,602 | 6,608,682 | 714,080 | ||||||||||||||||||
Long-term liabilities:
|
||||||||||||||||||||||||
Deferred lease liability
|
98,218 | 98,218 | - | - | 82,802 | 82,802 | ||||||||||||||||||
Total long-term liabilities
|
1,026,540 | 1,026,540 | - | 1,534,541 | 1,617,343 | 82,802 | ||||||||||||||||||
Stockholders' equity:
|
||||||||||||||||||||||||
Additional paid-in-capital
|
124,387,048 | 124,449,103 | 62,055 | 121,995,117 | 122,057,171 | 62,054 | ||||||||||||||||||
Accumulated deficit
|
(114,417,686 | ) | (115,338,864 | ) | (921,178 | ) | (115,513,353 | ) | (116,441,951 | ) | (928,604 | ) | ||||||||||||
Total stockholders’ equity
|
$ | 10,071,401 | $ | 9,212,278 | $ | (859,123 | ) | $ | 6,583,025 | $ | 5,716,475 | $ | (866,550 | ) |
Effect on Condensed Consolidated Statements of Operations
|
||||||||||||||||||||||||
Three Months ended June 30, 2011
(Unaudited)
|
Three Months ended June 30, 2010
(Unaudited)
|
|||||||||||||||||||||||
As Previously
Reported
|
As
Restated
|
Effect of
Correction
|
As Previously
Reported
|
As
Restated
|
Effect of
Correction
|
|||||||||||||||||||
Revenues, net
|
||||||||||||||||||||||||
Recurring
|
$ | 1,151,048 | $ | 1,151,048 | $ | - | $ | 1,213,115 | $ | 1,122,371 | $ | (90,744 | ) | |||||||||||
Total Revenue
|
2,927,936 | 2,927,936 | - | 3,183,401 | 3,092,657 | (90,744 | ) | |||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
1,017,894 | 1,017,894 | - | 1,012,124 | 938,305 | (73,819 | ) | |||||||||||||||||
Recurring
|
291,247 | 291,247 | - | 326,062 | 321,190 | (4,872 | ) | |||||||||||||||||
Total Cost of Sales
|
1,309,141 | 1,309,141 | - | 1,338,186 | 1,259,495 | (78,691 | ) | |||||||||||||||||
Gross Profit
|
1,618,795 | 1,618,795 | - | 1,845,215 | 1,833,162 | (12,053 | ) | |||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||
Research and development
|
184,207 | 182,625 | (1,582 | ) | 264,049 | 293,579 | 29,530 | |||||||||||||||||
Selling, general and administrative
|
1,224,178 | 1,166,812 | (57,366 | ) | 1,304,845 | 1,416,947 | 112,102 | |||||||||||||||||
Depreciation and amortization
|
86,235 | 68,818 | (17,417 | ) | 77,790 | 95,207 | 17,417 | |||||||||||||||||
Total Operating Expenses
|
1,494,620 | 1,418,255 | (76,365 | ) | 1,646,684 | 1,805,733 | 159,049 | |||||||||||||||||
Income (Loss) from Operations
|
124,175 | 200,540 | 76,365 | 198,531 | 27,429 | (171,102 | ) | |||||||||||||||||
Other Income (Expenses)
|
||||||||||||||||||||||||
Interest expense, net
|
(10,986 | ) | (23,740 | ) | (12,754 | ) | (155,547 | ) | (165,265 | ) | (9,718 | ) | ||||||||||||
Total Other Income (Expense)
|
(10,986 | ) | (23,740 | ) | (12,754 | ) | 285,035 | 275,317 | (9,718 | ) | ||||||||||||||
Income (Loss) Before Provision for Income Taxes
|
113,189 | 176,800 | 63,611 | 483,566 | 302,746 | (180,820 | ) | |||||||||||||||||
Net Income (Loss)
|
113,189 | 176,800 | 63,611 | 483,566 | 302,746 | (180,820 | ) | |||||||||||||||||
Net income (loss) attributable to common stockholders
|
$ | (57,611 | ) | $ | 6,000 | $ | 63,611 | $ | 444,219 | $ | 263,399 | $ | (180,820 | ) | ||||||||||
Net income per common share:
|
||||||||||||||||||||||||
Net income per common share – basic
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||
Net income per common share – diluted
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||
Weighted Average Common Shares Outstanding – basic
|
102,878,097 | 102,878,097 | - | 96,916,357 | 96,916,357 | - | ||||||||||||||||||
Weighted Average Common Shares Outstanding – diluted
|
104,404,580 | 104,404,580 | - | 97,140,595 | 97,140,595 | - |
Effect on Condensed Consolidated Statements of Operations
|
||||||||||||||||||||||||
Six Months ended June 30, 2011
(Unaudited)
|
Six Months ended June 30, 2010
(Unaudited)
|
|||||||||||||||||||||||
As Previously
Reported
|
As
Restated
|
Effect of
Correction
|
As Previously
Reported
|
As
Restated
|
Effect of
Correction
|
|||||||||||||||||||
Revenues, net
|
||||||||||||||||||||||||
Recurring
|
$ | 2,282,675 | $ | 2,282,675 | $ | - | $ | 2,230,704 | $ | 2,073,029 | $ | (157,675 | ) | |||||||||||
Total Revenue
|
5,410,635 | 5,410,635 | - | 5,767,441 | 5,609,766 | (157,675 | ) | |||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
1,726,164 | 1,726,164 | - | 1,911,907 | 1,789,482 | (122,425 | ) | |||||||||||||||||
Recurring
|
555,116 | 555,116 | - | 631,907 | 620,301 | (11,606 | ) | |||||||||||||||||
Total Cost of Sales
|
2,281,280 | 2,281,280 | - | 2,543,814 | 2,409,783 | (134,031 | ) | |||||||||||||||||
Gross Profit
|
3,129,355 | 3,129,355 | 3,223,627 | 3,199,983 | (23,644 | ) | ||||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||
Research and development
|
371,318 | 391,234 | 19,916 | 529,900 | 588,196 | 58,296 | ||||||||||||||||||
Selling, general and administrative
|
2,310,722 | 2,294,645 | (16,077 | ) | 2,995,584 | 3,108,674 | 113,090 | |||||||||||||||||
Depreciation and amortization
|
165,180 | 130,346 | (34,834 | ) | 158,200 | 193,034 | 34,834 | |||||||||||||||||
Total Operating Expenses
|
2,847,220 | 2,816,225 | (30,995 | ) | 3,683,684 | 3,889,904 | 206,220 | |||||||||||||||||
Income (Loss) from Operations
|
282,135 | 313,130 | 30,995 | (460,057 | ) | (689,921 | ) | (229,864 | ) | |||||||||||||||
Other Income (Expenses)
|
||||||||||||||||||||||||
Interest expense, net
|
(190,406 | ) | (213,974 | ) | (23,568 | ) | (324,293 | ) | (341,921 | ) | (17,628 | ) | ||||||||||||
Gain on derivative liability
|
172,477 | 172,476 | (1 | ) | - | - | - | |||||||||||||||||
Total Other Income (Expense)
|
813,532 | 789,963 | (23,569 | ) | 271,756 | 254,128 | (17,628 | ) | ||||||||||||||||
Income (Loss) Before Provision for Income Taxes
|
1,095,667 | 1,103,093 | 7,426 | (188,301 | ) | (435,793 | ) | (247,492 | ) | |||||||||||||||
Net Income (Loss)
|
1,095,667 | 1,103,093 | 7,426 | (188,301 | ) | (435,793 | ) | (247,492 | ) | |||||||||||||||
Net income (loss) attributable to common stockholders
|
$ | 781,800 | $ | 789,226 | $ | 7,426 | $ | (266,761 | ) | $ | (514,253 | ) | $ | (247,492 | ) | |||||||||
Net income per common share:
|
||||||||||||||||||||||||
Net income per common share – basic
|
$ | 0.01 | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||
Net income per common share – diluted
|
$ | 0.01 | $ | 0.01 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||
Weighted Average Common Shares Outstanding – basic
|
101,475,906 | 101,556,654 | 80,748 | 96,714,804 | 96,714,804 | - | ||||||||||||||||||
Weighted Average Common Shares Outstanding – diluted
|
103,002,389 | 103,083,137 |