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, 2011
Jun. 30, 2010
Net income (loss) $ 1,103,093 $ (435,793)
Amortization of debt discounts and financing costs 191,357 254,120
Gain on sale of product line (829,296)  
Gain on derivative liability (172,476) (696,793)
(Gain) loss on disposal of property and equipment (2,165) 100,744
Stock based compensation expense 96,488 88,181
Depreciation 9,506 72,194
Amortization 120,840 120,840
Provision for doubtful accounts (56,620) 31,879
Accounts receivable, trade and other (389,250) (762,451)
Inventories (117,270) 219,051
Prepaid expenses (67,910) (187,713)
Other current liabilities (80,970) 42,212
Accounts payable, accrued liabilities & expenses, net (468,887) 1,019,019
Deferred lease liability 15,416 21,494
Net Cash Used In Operating Activities (648,144) (113,016)
Proceeds on disposal of property and equipment 6,645  
Proceeds from sale of product line 1,000,000  
Net Cash Provided by Investing Activities 1,006,645  
Repayment on line of credit   (288,417)
Proceeds from issuance of note payable 700,000  
Payments on note payable (35,910)  
Payments on note payable – related party (25,114)  
Proceeds from issuance of redeemable preferred stock 1,355,000  
Repayment of convertible debentures (1,606,023)  
Net Cash Provided By (Used In) Financing Activities 387,953 (288,417)
Net increase (decrease) in cash and cash equivalents 746,454 (401,433)
Cash and cash equivalents at the beginning of the period 136,030 503,870
Cash and cash equivalents at the end of the period 882,484 102,437
Cash paid during the period for interest expense 177,639 177,564
Issuance of common stock as consideration for accounts payable   62,957
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 193,797 35,802
Accretion of dividend on redeemable preferred stock 120,070 42,658
Retirement of derivative liability related to warrant obligation 1,729,299  
Conversion of preferred stock to common stock $ 25,000