|
3. Summary of Significant Accounting Policies (Tables)
|
3 Months Ended |
|
Mar. 31, 2013
|
| Notes to Financial Statements |
|
| Inventories Table |
The composition of inventory as of March 31, 2013 and December
31, 2012 is as follows:
| |
|
March 31, |
|
|
December 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Raw materials |
|
$ |
180,408 |
|
|
$ |
183,655 |
|
| Finished goods |
|
|
760,445 |
|
|
|
789,707 |
|
| Inventory reserve |
|
|
(50,000) |
|
|
|
(50,000) |
|
| Total |
|
$ |
890,853 |
|
|
$ |
923,362 |
|
|
| Customer Concentration |
The following table illustrates the level
of concentration as a percentage of total revenues during the three months ended March 31, 2013 and 2012:
| |
|
For the Three Months Ended |
|
| |
|
March 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Top Five Customers |
|
|
74 |
% |
|
|
81 |
% |
| Federal Agencies |
|
|
56 |
% |
|
|
48 |
% |
The following table illustrates the level
of concentration as a percentage of net accounts receivable balance as of March 31, 2013 and December 31, 2012:
| |
|
March 31, |
|
|
December 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Top Five Customers |
|
|
80 |
% |
|
|
34 |
% |
| Federal Agencies |
|
|
29 |
% |
|
|
32 |
% |
|
| Computation of Loss per Share |
The following table illustrates our computation of loss per
share for the three months ended March 31, 2013 and 2012:
| |
|
For the Three Months Ended |
|
| |
|
March 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Numerator: |
|
|
|
|
|
|
| Net loss |
|
$ |
(779,369) |
|
|
$ |
(1,062,907) |
|
| Accrued dividend for Preferred Stock |
|
|
(32,173) |
|
|
|
(24,414) |
|
| Deemed dividend on
Series J Convertible Preferred Stock |
|
|
(582,548) |
|
|
|
- |
|
| Net loss applicable to common shareholders |
|
$ |
(1,394,090) |
|
|
$ |
(1,087,321) |
|
| |
|
|
|
|
|
|
|
|
| Denominator for basic and diluted loss per share: |
|
|
|
|
|
|
|
|
| Weighted average common stock shares outstanding |
|
|
12,149,267 |
|
|
|
7,712,359 |
|
| |
|
|
|
|
|
|
|
|
| Loss per common share - basic and diluted |
|
$ |
(0.11) |
|
|
$ |
(0.14) |
|
|
| Stockholders' Equity Activity Series C Preferred Convertible Securities Exchange |
The Series C Convertible Preferred Stock,
Series D Convertible Preferred Stock, Series G Convertible Preferred Stock and Series J Convertible Preferred Stock are presented
below as if they were converted into common shares according to the conversion terms in Note 5.
| |
|
March 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Stock options |
|
|
1,605,750 |
|
|
|
1,555,500 |
|
| Convertible debt |
|
|
- |
|
|
|
50,000 |
|
| Common stock warrants |
|
|
11,337,099 |
|
|
|
5,310,388 |
|
| Preferred stock warrants |
|
|
- |
|
|
|
- |
|
| Convertible preferred stock: |
|
|
|
|
|
|
|
|
| Series C Convertible Preferred |
|
|
- |
|
|
|
880,980 |
|
| Series D Convertible Preferred |
|
|
750,000 |
|
|
|
461,539 |
|
| Series G Convertible Preferred |
|
|
1,453,200 |
|
|
|
- |
|
| Series J Convertible Preferred |
|
|
4,650,000 |
|
|
|
- |
|
| |
|
|
19,796,049 |
|
|
|
8,258,407 |
|
|
| Stock based compensation expense |
The following table summarizes the effect
of this stock-based compensation expense within each of the line items of our costs and expenses within our Consolidated Statements
of Operations:
| |
|
For the Three Months Ended March 31, |
|
| |
|
2013 |
|
|
2012 |
|
| Research and development |
|
$ |
4,836 |
|
|
$ |
2,618 |
|
| Selling and marketing |
|
|
3,668 |
|
|
|
3,113 |
|
| General and administrative |
|
|
10,536 |
|
|
|
3,137 |
|
| Total stock-based compensation expense |
|
$ |
19,040 |
|
|
$ |
8,868 |
|
|
| Liabilities measured at fair value on recurring basis |
The following tables set forth the Company’s
financial liabilities that were accounted for at fair value on a recurring basis as of March 31, 2013.
| |
|
|
|
|
Fair value measurements at March 31, 2013 using: |
|
| |
|
March 31, 2013 |
|
|
Quoted prices in
active markets
(Level 1)
|
|
|
Significant other observable inputs
(Level 2)
|
|
|
Significant
unobservable inputs
(Level 3)
|
|
| Series D Preferred Stock Purchase Warrants |
|
$ |
206,257 |
|
|
|
- |
|
|
|
- |
|
|
$ |
206,257 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
January 1, 2013 |
|
|
Change in Fair Value |
|
|
March 31, 2013 |
|
| Series D Preferred Stock Purchase Warrants |
|
$ |
160,812 |
|
|
$ |
45,445 |
|
|
$ |
206,257 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value assumptions |
The assumptions for the binomial pricing model are represented
in the table below for the warrants issued in the Series D private placement reflected on a per share Common Stock equivalent basis.
| Assumptions |
|
November 10, 2011 |
|
Warrants revalued at
December 31, 2012
|
|
Warrants revalued at
March 31, 2013
|
| Expected life (in months) |
|
60.0 |
|
46.0 |
|
43.0 |
| Expected volatility |
|
104.5% |
|
146.4% |
|
133.7% |
| Risk-free interest rate |
|
0.875% |
|
0.44% |
|
0.36% |
| Exercise price |
|
$0.81 |
|
$0.40 |
|
$0.40 |
| Fair value per warrant |
|
$0.54 |
|
$0.15 |
|
$0.20 |
|