Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Statement of Cash Flows [Abstract]    
Net income (loss) $ (571,640) $ 1,103,093
Amortization of debt discounts and financing costs 0 191,357
Gain on sale of product line (15,408) (829,296)
Gain on derivative liability 0 (172,476)
Gain on disposal of property and equipment 0 (2,165)
Stock based compensation expense 174,669 96,488
Depreciation of property and equipment 13,236 9,506
Amortization of intangible assets 120,840 120,840
Provision for doubtful accounts 11,850 (56,620)
Accounts receivable (116,646) (389,250)
Inventories (350,612) (117,270)
Prepaid expenses 26,039 (67,910)
Accounts payable 173,548 (531,752)
Accrued liabilities & expenses 272,040 62,865
Deferred revenue 51,243 (22,958)
Customer deposits 55,691 (58,012)
Deferred lease liability 10,682 15,416
Net Cash Used In Operating Activities (144,468) (648,144)
Purchase of property and equipment (34,119) 0
Proceeds from disposal of property and equipment 0 6,645
Proceeds from sale of product line 0 1,000,000
Net Cash (Used In) Provided By Investing Activities (34,119) 1,006,645
Proceeds from issuance of note payable 0 700,000
Payments on note payable (36,878) (35,910)
Payments on note payable - related party 0 (25,114)
Proceeds from issuance of redeemable preferred stock 0 1,355,000
Repayment of convertible debentures 0 (1,606,023)
Net Cash (Used In) Provided by Financing Activities (36,878) 387,953
Net (decrease) increase in cash and cash equivalents (215,465) 746,454
Cash and cash equivalents at the beginning of the period 961,091 136,030
Cash and cash equivalents at the end of the period 745,626 882,484
Cash paid during the period for interest expense 3,395 177,639
Issuance of note payable in conjunction with warrant cancellation 0 50,000
Beneficial conversion feature of redeemable convertible preferred stock 0 427,895
Value of warrants issued with redeemable convertible preferred stock 0 427,895
Accretion of discount on redeemable preferred stock 279,582 193,797
Accretion of dividends on redeemable preferred stock 135,284 120,070
Retirement of derivative liability related to warrant obligation 0 (570,569)
Conversion of preferred stock to common stock $ 0 $ 25,000