Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash Flows from Operating Activities:    
Net loss $ (559,123) $ (1,033,356)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Gain on sale of product line 0 (41,902)
Stock-based compensation expense 6,641 85,519
Depreciation 15,346 8,007
Amortization 120,840 120,840
Provision for doubtful accounts 5,787 64,543
Deferred income taxes 102,624 0
Changes in assets and liabilities:    
Accounts receivable 159,821 560,471
Inventories 68,573 (258,874)
Prepaid expenses 57,339 77,057
Accounts payable 151,228 (12,692)
Accrued liabilities and expenses (329,824) (286,880)
Deferred revenue 177,197 321,100
Customer deposits 464,463 406,981
Deferred lease liability 17,197 (547)
Net Cash Provided By Operating Activities 458,109 10,267
Cash Flows From Investing Activities:    
Purchase of property and equipment (120,667) (18,633)
Change in restricted cash 319,000 (382,000)
Net Cash Provided By (Used In) Investing Activities 198,333 (400,633)
Cash Flows From Financing Activities:    
Payments on note payable (131,255) (58,276)
Net Cash Used In Financing Activities (131,255) (58,276)
Net increase (decrease) in cash and cash equivalents 525,187 (448,642)
Cash and cash equivalents at the beginning of the period 572,672 1,163,758
Cash and cash equivalents at the end of the period 1,097,859 715,116
Supplemental Disclosures of Cash Flow Information:    
Cash paid during the period for interest expense 19,297 9,194
Non-cash transactions:    
Accretion of discount on redeemable preferred stock 49,056 216,264
Accretion of dividends on redeemable preferred stock 47,628 84,622
Conversion of preferred stock to common stock $ 0 $ 50,000