Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

v2.4.0.6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Cash Flows from Operating Activities:    
Net (loss) income $ (58,430) $ 1,112,428
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
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 206,928 132,642
Depreciation 16,081 21,549
Amortization 181,260 181,260
Provision for doubtful accounts (14,525) (68,321)
Increase / decrease in:    
Accounts receivable (600,489) 62,960
Inventories (447,736) (241,123)
Prepaid expenses (24,027) 25,330
Accounts payable 211,281 (797,061)
Accrued liabilities & expenses 84,040 204,741
Deferred revenue 116,006 (10,614)
Customer deposits 119,994 (80,556)
Deferred lease liability 13,290 26,060
Net Cash Used In Operating Activities (211,735) (243,285)
Cash Flows From Investing Activities:    
Purchase of property and equipment (38,114) 0
Proceeds from disposal of property and equipment 0 6,645
Proceeds from sale of product line 0 1,000,000
Deposit of restricted cash 0 (91,000)
Net Cash (Used In) Provided By Investing Activities (38,114) 915,645
Cash Flows From Financing Activities:    
Proceeds from issuance of note payable    700,000
Payments on note payable (49,035) (60,243)
Payments on note payable - related party    (25,114)
Proceeds from issuance of redeemable preferred stock    1,355,000
Gain on debt extinguishment 405,000   
Repayment of convertible debentures    (1,606,023)
Net Cash Provided by Financing Activities 355,965 363,620
Net increase in cash and cash equivalents 106,116 1,035,980
Cash and cash equivalents at the beginning of the period 961,091 136,030
Cash and cash equivalents at the end of the period 1,067,207 1,172,010
Supplemental Disclosures of Cash Flow Information:    
Cash paid during the period for interest expense 4,889 180,162
Non-cash transactions:    
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 519,578 316,908
Accretion of dividends on redeemable preferred stock 203,674 191,283
Retirement of derivative liability related to warrant obligation    (570,569)
Conversion of preferred stock to common stock    $ 375,000