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
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|
EXPLANATORY NOTE
|
2 |
PART I. FINANCIAL INFORMATION
|
3
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Item 1. Financial Statements
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3
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Condensed Consolidated Balance Sheets:
September 30, 2011 (Unaudited) and December 31, 2010
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3
|
Condensed Consolidated Statements of Operations (Unaudited):
Three And Nine Months Ended September 30, 2011 and 2010
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4
|
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited):
Year ended December 31, 2010
|
5 |
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited):
January 1, 2011 through September 30, 2011
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6
|
Condensed Consolidated Statements of Cash Flows (Unaudited):
Nine Months Ended September 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 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.
|
·
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Errors related to improper recording of depreciation expense and related understatement of accumulated depreciation.
|
·
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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.
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·
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Additionally, certain reclassifications have been made to previously reported unaudited condensed consolidated financial statements.
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(Unaudited)
September 30, 2011
(As Restated)
|
December 31, 2010
(As Restated)
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|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
1,172,010
|
$
|
136,030
|
||||
Restricted cash on deposit
|
91,000
|
-
|
||||||
Accounts receivable, net
|
804,546
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799,185
|
||||||
Inventories
|
719,821
|
599,402
|
||||||
Prepaid expenses
|
137,997
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163,327
|
||||||
Total current assets
|
2,925,374
|
1,697,944
|
||||||
Property and equipment, net
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17,300
|
43,329
|
||||||
Other assets:
|
||||||||
Deferred financing costs, net
|
-
|
56,732
|
||||||
Goodwill
|
11,670,446
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11,670,446
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||||||
Intangible assets, net
|
1,802,397
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1,983,657
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||||||
Deposits
|
34,238
|
34,238
|
||||||
Total other assets
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13,507,081
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13,745,073
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||||||
Total Assets
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$
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16,449,755
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$
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15,486,346
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||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
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1,605,889
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$
|
2,402,950
|
||||
Accrued liabilities and expenses
|
2,095,692
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1,890,951
|
||||||
Notes payable – current
|
73,592
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47,536
|
||||||
Notes 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
|
59,865
|
151,035
|
||||||
Total current liabilities
|
3,835,038
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6,608,682
|
||||||
Long-term liabilities:
|
||||||||
Derivative liability – long term
|
-
|
1,282,077
|
||||||
Deferred lease liability
|
108,862
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82,802
|
||||||
Notes payable – long term
|
916,165
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252,464
|
||||||
Total long-term liabilities
|
1,025,027
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1,617,343
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||||||
Redeemable preferred stock:
|
||||||||
Redeemable preferred stock, 15,000,000 shares authorized; par value $.001 per share; | ||||||||
Series A, 215 shares issued, 185 and 215 shares outstanding at September 30, 2011 and December 31, 2010, respectively
|
856,434
|
890,475
|
||||||
Series B, 538 shares issued, 493 outstanding at September 30, 2011, 267 shares issued and outstanding at December 31, 2010
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1,319,813
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653,371
|
||||||
Total redeemable preferred stock
|
2,176,247
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1,543,846
|
||||||
Commitments and contingencies
|
-
|
-
|
||||||
Stockholders’ Equity
|
||||||||
Common stock, par value $.001 per share; 190,000,000 shares authorized; 104,164,253 and 101,258,725 shares issued and
outstanding at September 30, 2011 and December 31, 2010, respectively
|
104,166
|
101,261
|
||||||
Additional paid-in-capital
|
124,638,806
|
122,057,171
|
||||||
Accumulated deficit
|
(115,329,529)
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(116,441,957)
|
||||||
Total stockholders’ equity
|
9,413,443
|
5,716,475
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
16,449,755
|
|
|
$
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15,486,346
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For The Three Months Ended
September 30,
|
For The Nine Months Ended
September 30,
|
|||||||||||||||
2011
(As Restated)
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2010
(As Restated)
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2011
(As Restated)
|
2010
(As Restated)
|
|||||||||||||
Revenues, net:
|
||||||||||||||||
Product
|
$ | 1,632,160 | $ | 1,817,391 | $ | 4,760,120 | $ | 5,354,128 | ||||||||
Recurring
|
1,162,559 | 1,194,856 | 3,445,234 | 3,267,885 | ||||||||||||
Total Revenue
|
2,794,719 | 3,012,247 | 8,205,354 | 8,622,013 | ||||||||||||
Cost of Sales:
|
||||||||||||||||
Product
|
1,002,816 | 1,129,017 | 2,728,980 | 2,918,499 | ||||||||||||
Recurring
|
294,846 | 340,369 | 849,962 | 960,670 | ||||||||||||
Total Cost of Sales
|
1,297,662 | 1,469,386 | 3,578,942 | 3,879,169 | ||||||||||||
Gross Profit
|
1,497,057 | 1,542,861 | 4,626,412 | 4,742,844 | ||||||||||||
Operating Expenses:
|
||||||||||||||||
Research and development
|
197,674 | 280,848 | 588,908 | 869,044 | ||||||||||||
Selling, general and administrative
|
1,194,156 | 1,324,028 | 3,488,802 | 4,432,702 | ||||||||||||
Depreciation and amortization
|
72,463 | 72,491 | 202,809 | 265,525 | ||||||||||||
Total Operating Expenses
|
1,464,293 | 1,677,367 | 4,280,519 | 5,567,271 | ||||||||||||
Income (Loss) from Operations
|
32,764 | (134,506 | ) | 345,893 | (824,427 | ) | ||||||||||
Other Income (Expenses):
|
||||||||||||||||
Interest expense, net
|
(23,428 | ) | (156,624 | ) | (237,402 | ) | (498,545 | ) | ||||||||
Gain (loss) on derivative liability
|
- | (2,001,698 | ) | 172,476 | (1,304,905 | ) | ||||||||||
Gain on sale of product line
|
- | - | 829,296 | - | ||||||||||||
Gain (loss) on disposal of property and equipment
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- | (3,524 | ) | 2,165 | (104,268 | ) | ||||||||||
Total Other Income (Expense)
|
(23,428 | ) | (2,161,846 | ) | 766,535 | (1,907,718 | ) | |||||||||
Income (Loss) Before Provision for Income Taxes
|
9,336 | (2,296,352 | ) | 1,112,428 | (2,732,145 | ) | ||||||||||
Provision for Income Taxes
|
- | - | - | - | ||||||||||||
Net Income (Loss)
|
9,336 | (2,296,352 | ) | 1,112,428 | (2,732,145 | ) | ||||||||||
Accretion of preferred dividends and discount
|
(194,324 | ) | (80,285 | ) | (508,191 | ) | (158,745 | ) | ||||||||
Net income (loss) attributable to common stockholders
|
$ | (184,988 | ) | $ | (2,376,637 | ) | $ | 604,237 | $ | (2,890,890 | ) | |||||
Net income (loss) per common share:
|
||||||||||||||||
Income (loss) per common share – basic
|
$ | 0.00 | $ | (0.02 | ) | $ | 0.01 | $ | (0.03 | ) | ||||||
Income (loss) per common share – diluted
|
$ | 0.00 | $ | (0.02 | ) | $ | 0.01 | $ | (0.03 | ) | ||||||
Weighted Average Common Shares Outstanding - basic
|
102,970,585 | 98,947,412 | 102,033,143 | 97,387,490 | ||||||||||||
Weighted Average Common Shares Outstanding - diluted
|
104,399,613 | 98,947,412 | 103,462,171 | 97,387,490 |
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 $0.145 per share
|
584,455 | 584 | 85,415 | - | 85,999 | |||||||||||||||
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 $0.17 per share
|
2,143,990 | 2,144 | 372,856 | - | 375,000 | |||||||||||||||
Stock-based compensation expense related to employee stock options
|
- | - | 21,643 | - | 21,643 | |||||||||||||||
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
|
- | - | (316,908 | ) | - | (316,908 | ) | |||||||||||||
Accretion of redeemable preferred stock dividend
|
- | - | (191,283 | ) | - | (191,283 | ) | |||||||||||||
Net income, as restated
|
1,112,428 | 1,112,428 | ||||||||||||||||||
Balance at September 30, 2011, as restated
|
104,164,253 | $ | 104,166 | $ | 124,638,806 | $ | (115,329,529 | ) | $ | 9,413,443 |
For the Nine Months
Ended September 30,
|
||||||||
2011
(As Restated)
|
2010
(As Restated)
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net income (loss)
|
$
|
1,112,428
|
$
|
(2,732,145
|
)
|
|||
Adjustments to reconcile net income (loss) from operations to cash used in operating activities:
|
||||||||
Amortization of debt discounts and financing costs
|
191,357
|
374,675
|
||||||
Gain on sale of product line
|
(829,296
|
)
|
-
|
|||||
(Gain) loss on derivative liability
|
(172,476
|
)
|
1,304,905
|
|||||
(Gain) loss on disposal of property and equipment
|
(2,165
|
)
|
104,268
|
|||||
Provision for lease loss
|
59,937
|
-
|
||||||
Stock based compensation expense
|
132,642
|
154,591
|
||||||
Depreciation
|
21,549
|
84,265
|
||||||
Amortization
|
181,260
|
181,260
|
||||||
Provision for doubtful accounts
|
(68,321
|
)
|
41,290
|
|||||
Increase / decrease in:
|
||||||||
Accounts receivable, trade and other
|
62,960
|
(1,097,533
|
)
|
|||||
Inventories
|
(241,123
|
)
|
404,462
|
|||||
Prepaid expenses
|
25,330
|
(141,294
|
)
|
|||||
Other assets
|
-
|
(140,232
|
)
|
|||||
Other current liabilities
|
(91,170
|
)
|
-
|
|||||
Accounts payable, accrued liabilities & expenses, net
|
(652,257
|
)
|
279,412
|
|||||
Deferred lease liability
|
26,060
|
23,991
|
||||||
Net Cash Used In Operating Activities
|
(243,285
|
)
|
(1,158,085
|
)
|
||||
Cash Flows From Investing Activities:
|
||||||||
Purchase of property and equipment
|
-
|
(4,800
|
)
|
|||||
Proceeds from disposal of property and equipment
|
6,645
|
-
|
||||||
Proceeds from sale of product line
|
1,000,000
|
-
|
||||||
Deposit of restricted cash
|
(91,000
|
)
|
-
|
|||||
Net Cash Provided By (Used In) Investing Activities
|
915,645
|
(4,800
|
)
|
|||||
Cash Flows From Financing Activities:
|
||||||||
Repayment on line of credit
|
-
|
(387,000
|
)
|
|||||
Proceeds from issuance of note payable
|
700,000
|
-
|
||||||
Payments on note payable
|
(60,243
|
)
|
-
|
|||||
Payments on note payable – related party
|
(25,114
|
)
|
-
|
|||||
Proceeds from issuance of redeemable preferred stock
|
1,355,000
|
1,335,000
|
||||||
Repayment of convertible debentures
|
(1,606,023
|
)
|
-
|
|||||
Net Cash Provided By Financing Activities
|
363,620
|
948,000
|
||||||
Net increase (decrease) in cash and cash equivalents
|
1,035,980
|
(214,885
|
)
|
|||||
Cash and cash equivalents at the beginning of the period
|
136,030
|
|
503,870
|
|||||
Cash and cash equivalents at the end of the period
|
$
|
1,172,010
|
$
|
288,985
|
For the Nine Months Ended
September 30,
|
||||||||
2011
(As Restated)
|
2010
(As Restated)
|
|||||||
Supplemental Disclosures of Cash Flow Information:
|
||||||||
Cash transactions:
|
||||||||
Cash paid during the period for interest expense
|
$
|
180,162
|
$
|
257,176
|
||||
Non-cash transactions:
|
||||||||
Issuance of common stock as consideration for accounts payable
|
$
|
-
|
$
|
77,695
|
||||
Issuance of note payable in conjunction with warrant cancellation
|
50,000
|
-
|
||||||
Beneficial conversion feature of redeemable convertible preferred stock
|
427,895
|
394,350
|
||||||
Value of warrants issued with redeemable convertible preferred stock
|
427,895
|
394,350
|
||||||
Accretion of discount on redeemable preferred stock
|
316,908
|
|
78,299
|
|||||
Accretion of dividends on redeemable preferred stock
|
191,283
|
|
80,446
|
|||||
Retirement of derivative liability related to warrant obligation
|
1,729,299
|
-
|
||||||
Conversion of preferred stock to common stock
|
375,000
|
-
|
2011
|
||||||||
For the
Three Months Ended
(Unaudited)
|
For the
Nine Months Ended
(Unaudited)
|
|||||||
Increase in sales tax, penalties and interest
|
$ | (41,156 | ) | $ | (120,836 | ) | ||
Incorrect application of ASC 840, Accounting for Leases, resulted in an understatement of deferred lease liability
|
- | 82,802 | ||||||
Decrease in depreciation expense related to recording depreciation expense in improper periods
|
17,417 | 52,251 | ||||||
Increase in expense related to improper recording of various accrued liabilities
|
- | (30,531 | ) | |||||
Total decrease in net income for the stated period
|
$ | (23,739 | ) | $ | (16,314 | ) |
2010
|
||||||||
For the
Three Months Ended
(Unaudited)
|
For the
Nine Months Ended
(Unaudited)
|
|||||||
Increase in sales tax, penalties and interest
|
$ | (46,082 | ) | $ | (131,903 | ) | ||
Incorrect application of ASC 840, Accounting for Leases, resulted in an understatement of deferred lease liability
|
(2,497 | ) | (23,991 | ) | ||||
Increase in depreciation expense related to recording depreciation expense in improper periods
|
(17,417 | ) | (52,251 | ) | ||||
Increase in expense related to improper recording of various accrued liabilities
|
(48,000 | ) | (153,343 | ) | ||||
Total increase in net loss for the stated period
|
$ | (113,996 | ) | $ | (361,488 | ) |
Effect on Condensed Consolidated Balance Sheets as of
|
||||||||||||||||||||||||
September 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 | $ | 172,235 | $ | 137,997 | $ | (34,238 | ) | $ | 197,565 | $ | 163,327 | $ | (34,238 | ) | ||||||||||
Total current assets | 2,959,612 | 2,925,374 | (34,238 | ) | 1,732,182 | 1,697,944 | (34,238 | ) | ||||||||||||||||
Property and equipment, net | 34,717 | 17,300 | (17,417 | ) | 112,997 | 43,329 | (69,668 | ) | ||||||||||||||||
Other assets: | ||||||||||||||||||||||||
Deposits | - | 34,238 | 34,238 | - | 34,238 | 34,238 | ||||||||||||||||||
Total other assets | 13,472,843 | 13,507,081 | 34,238 | 13,710,835 | 13,745,073 | 34,238 | ||||||||||||||||||
Total assets | 16,467,172 | 16,449,755 | (17,417 | ) | 15,556,014 | 15,486,346 | (69,668 | ) | ||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||
Accrued liabilities and expenses | 1,211,248 | 2,095,692 | 884,444 | 1,157,873 | 1,890,951 | 733,078 | ||||||||||||||||||
Other current liabilities | 78,863 | 59,865 | (18,998 | ) | 170,033 | 151,035 | (18,998 | ) | ||||||||||||||||
Total current liabilities | 2,969,592 | 3,835,038 | 865,446 | 5,894,602 | 6,608,682 | 714,080 | ||||||||||||||||||
Long-term liabilities: | ||||||||||||||||||||||||
Deferred lease liability | 108,862 | 108,862 | - | - | 82,802 | 82,802 | ||||||||||||||||||
Total long-term liabilities | 1,025,027 | 1,025,027 | - | 1,534,541 | 1,617,343 | 82,802 | ||||||||||||||||||
Stockholders' equity: | ||||||||||||||||||||||||
Additional paid-in-capital | 124,576,751 | 124,638,806 | 62,055 | 121,995,117 | 122,057,171 | 62,054 | ||||||||||||||||||
Accumulated deficit | (114,384,611 | ) | (115,329,529 | ) | (944,918 | ) | (115,513,353 | ) | (116,441,957 | ) | (928,604 | ) | ||||||||||||
Total stockholders’ equity | $ | 10,296,306 | $ | 9,413,443 | $ | (882,863 | ) | $ | 6,583,025 | $ | 5,716,475 | $ | (866,550 | ) |
Effect on Condensed Consolidated Statements of Operations
|
||||||||||||||||||||||||
Three Months ended September 30, 2011
(Unaudited)
|
Three Months ended September 30, 2010
(Unaudited)
|
|||||||||||||||||||||||
As Previously
Reported |
As
Restated |
Effect of
Correction |
As Previously
Reported |
As
Restated
|
Effect of
Correction |
|||||||||||||||||||
Revenues, net
|
||||||||||||||||||||||||
Recurring
|
$ | 1,162,559 | $ | 1,162,559 | $ | - | $ | 1,287,275 | $ | 1,194,856 | $ | (92,419 | ) | |||||||||||
Total Revenue
|
2,794,719 | 2,794,719 | - | 3,104,666 | 3,012,247 | (92,419 | ) | |||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
1,002,816 | 1,002,816 | - | 1,195,448 | 1,129,017 | (66,431 | ) | |||||||||||||||||
Recurring
|
294,846 | 294,846 | - | 349,203 | 340,369 | (8,834 | ) | |||||||||||||||||
Total Cost of Sales
|
1,297,662 | 1,297,662 | - | 1,544,651 | 1,469,386 | (75,265 | ) | |||||||||||||||||
Gross Profit
|
1,497,057 | 1,497,057 | - | 1,560,015 | 1,542,861 | (17,154 | ) | |||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||
Research and development
|
197,674 | 197,674 | - | 251,259 | 280,848 | 29,589 | ||||||||||||||||||
Selling, general and administrative
|
1,165,174 | 1,194,156 | 28,982 | 1,283,657 | 1,324,028 | 40,371 | ||||||||||||||||||
Depreciation and amortization
|
89,880 | 72,463 | (17,417 | ) | 55,074 | 72,491 | 17,417 | |||||||||||||||||
Total Operating Expenses
|
1,452,728 | 1,464,293 | 11,565 | 1,589,990 | 1,677,367 | 87,377 | ||||||||||||||||||
Income (Loss) from Operations
|
44,329 | 32,764 | (11,565 | ) | (29,975 | ) | (134,506 | ) | (104,531 | ) | ||||||||||||||
Other Income (Expenses)
|
||||||||||||||||||||||||
Interest expense, net
|
(11,254 | ) | (23,428 | ) | (12,174 | ) | (147,159 | ) | (156,624 | ) | (9,465 | ) | ||||||||||||
Total Other Income (Expenses)
|
(11,254 | ) | (23,428 | ) | (12,174 | ) | (2,152,381 | ) | (2,161,846 | ) | (9,465 | ) | ||||||||||||
Income (Loss) Before Provision for Income Taxes
|
33,075 | 9,336 | (23,739 | ) | (2,182,356 | ) | (2,296,352 | ) | (113,996 | ) | ||||||||||||||
Net Income (Loss)
|
33,075 | 9,336 | (23,739 | ) | (2,182,356 | ) | (2,296,352 | ) | (113,996 | ) | ||||||||||||||
Net income (loss) attributable to common stockholders
|
$ | (161,249 | ) | $ | (184,988 | ) | $ | (23,739 | ) | $ | (2,262,641 | ) | $ | (2,376,637 | ) | $ | (113,996 | ) | ||||||
Net income (loss) per common share:
|
||||||||||||||||||||||||
Net income (loss) per common share – basic
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.00 | ||||||||||
Net income (loss) per common share – diluted
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | (0.02 | ) | $ | (0.02 | ) | $ | 0.00 | ||||||||||
Weighted Average Common Shares Outstanding – basic
|
102,970,585 | 102,970,585 | - | 98,947,412 | 98,947,412 | - | ||||||||||||||||||
Weighted Average Common Shares Outstanding – diluted
|
104,399,613 | 104,399,613 | - | 98,947,412 | 98,947,412 | - |
Effect on Condensed Consolidated Statements of Operations
|
||||||||||||||||||||||||
Nine Months ended September 30, 2011
(Unaudited)
|
Nine Months ended September 30, 2010
(Unaudited)
|
|||||||||||||||||||||||
As Previously
Reported |
As
Restated |
Effect of
Correction |
As Previously
Reported |
As
Restated |
Effect of
Correction
|
|||||||||||||||||||
Revenues net
|
||||||||||||||||||||||||
Recurring
|
$ | 3,445,234 | $ | 3,445,234 | $ | - | $ | 3,517,979 | $ | 3,267,885 | $ | (250,094 | ) | |||||||||||
Total Revenue
|
8,205,354 | 8,205,354 | - | 8,872,107 | 8,622,013 | (250,094 | ) | |||||||||||||||||
Cost of Sales
|
||||||||||||||||||||||||
Product
|
2,728,980 | 2,728,980 | - | 3,107,355 | 2,918,499 | (188,856 | ) | |||||||||||||||||
Recurring
|
849,962 | 849,962 | - | 981,110 | 960,670 | (20,440 | ) | |||||||||||||||||
Total Cost of Sales
|
3,578,942 | 3,578,942 | - | 4,088,465 | 3,879,169 | (209,296 | ) | |||||||||||||||||
Gross Profit
|
4,626,412 | 4,626,412 | - | 4,783,642 | 4,742,844 | (40,798 | ) | |||||||||||||||||
Operating Expenses
|
||||||||||||||||||||||||
Research and development
|
568,992 | 588,908 | 19,916 | 781,159 | 869,044 | 87,885 | ||||||||||||||||||
Selling, general and administrative
|
3,475,896 | 3,488,802 | (12,906 | ) | 4,279,241 | 4,432,702 | 153,461 | |||||||||||||||||
Depreciation and amortization
|
255,060 | 202,809 | (52,251 | ) | 213,274 | 265,525 | 52,251 | |||||||||||||||||
Total Operating Expense
|
4,299,948 | 4,280,519 | (19,429 | ) | 5,273,674 | 5,567,271 | 293,597 | |||||||||||||||||
Income (Loss) from Operations
|
326,464 | 345,893 | 19,429 | (490,032 | ) | (824,427 | ) | (334,395 | ) | |||||||||||||||
Other Income (Expense)
|
||||||||||||||||||||||||
Interest expense, net
|
(201,660 | ) | (237,402 | ) | (35,742 | ) | (471,452 | ) | (498,545 | ) | (27,093 | ) | ||||||||||||
Total Other Income (Expense)
|
802,278 | 766,535 | (35,743 | ) | (1,880,625 | ) | (1,907,718 | ) | (27,093 | ) | ||||||||||||||
Income (Loss) Before Provision for Income Taxes
|
1,128,742 | 1,112,428 | (16,314 | ) | (2,370,657 | ) | (2,732,145 | ) | (361,488 | ) | ||||||||||||||
Net Income (Loss)
|
1,128,742 | 1,112,428 | (16,314 | ) | (2,370,657 | ) | (2,732,145 | ) | (361,488 | ) | ||||||||||||||
Net income (loss) attributable to common stockholders
|
$ | 620,551 | $ | 604,237 | $ | (16,314 | ) | $ | (2,529,402 | ) | $ | (2,890,890 | ) | $ | (361,488 | ) | ||||||||
Net income (loss) per common share:
|
||||||||||||||||||||||||
Net income (loss) per common share – basic
|
$ | 0.01 | $ | 0.01 | $ | - | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.01 | ) | |||||||||
Net income (loss) per common share – diluted
|
$ | 0.01 | $ | 0.01 | $ | - | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.01 | ) | |||||||||
Weighted Average Common Shares Outstanding – basic
|
101,914,800 | 102,033,143 | 118,343 | 97,387,490 | 97,387,490 | - | ||||||||||||||||||
|