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, 2013
Jun. 30, 2012
Cash Flows from Operating Activities:    
Net (loss) income $ (1,033,356) $ (571,640)
Adjustments to reconcile net loss from operations to cash provided by (used in) operating activities:    
Gain on sale of product line (41,902) (15,408)
Stock based compensation expense 85,519 174,669
Depreciation 8,007 13,236
Amortization 120,840 120,840
Provision for doubtful accounts 64,543 11,850
Changes in assets and liabilities:    
Accounts receivable 560,471 (116,646)
Inventories (258,874) (350,612)
Prepaid expenses 77,057 26,039
Accounts payable (12,692) 173,548
Accrued liabilities & expenses (286,880) 272,040
Deferred revenue 321,100 51,243
Customer deposits 406,981 55,691
Deferred lease liability (547) 10,682
Net Cash Provided By (Used In) Operating Activities 10,267 (144,468)
Cash Flows From Investing Activities:    
Purchase of property and equipment (18,633) (34,119)
Deposit of restricted cash (382,000)   
Net Cash Used In Investing Activities (400,633) (34,119)
Cash Flows From Financing Activities:    
Payments on note payable (58,276) (36,878)
Net Cash Used In Financing Activities (58,276) (36,878)
Net decrease in cash and cash equivalents (448,642) (215,465)
Cash and cash equivalents at the beginning of the period 1,163,758 961,091
Cash and cash equivalents at the end of the period 715,116 745,626
Supplemental Disclosures of Cash Flow Information:    
Cash paid during the period for interest expense 9,194 3,395
Non-cash transactions:    
Accretion of discount on redeemable preferred stock 216,264 279,582
Accretion of dividends on redeemable preferred stock 84,622 135,284
Conversion of preferred stock to common stock $ 50,000