Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Statement of Cash Flows [Abstract]    
Net loss $ (1,845,410) $ (1,572,599)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 40,421 57,168
Accretion of interest and amortization of debt issue costs 260,753 46,159
Stock-based compensation expense 28,017 20,090
Amortization of third party fees paid in restricted common stock 256,000 79,575
Change in fair value of warrant derivative liability 18,359 (135,300)
Changes in operating assets and liabilities:    
Accounts receivable (97,892) 27,511
Inventories 56,722 93,116
Accounts payable (116,597) 304,891
Accrued employee compensation 9,168 2,260
Deferred revenue (29,601)   
Other accrued expenses and liabilities 160,167 50,520
Prepaid expenses and other current assets (19,973) (157,639)
Net cash used in operating activities (1,316,584) (1,184,248)
Purchases of property and equipment (1,531)   
Net cash used in investing activities (1,531)   
CASH FLOWS FROM FINANCING ACTIVITIES:    
Repayment of related party debt (46,778)   
Net Proceeds from convertible debt 640,500   
Payments on convertible debt    (43,000)
Payment of dividends (60,000)   
Funds held for private placement    295,000
Net proceeds from the issuance of equity securities 896,595 730,389
Net cash provided by financing activities 1,430,317 982,389
Change in cash and cash equivalents 112,202 (201,859)
Cash and cash equivalents, beginning of period 1,461 222,775
Cash and cash equivalents, end of period 113,663 20,916
SUPPLEMENTAL INFORMATION - Non-investing and financing activities:    
Income taxes paid    1,900
Issuance of common stock dividends on preferred stock    161,557
Convertible debt exchanged for Series J preferred stock: 1,018,000   
Issuance of common stock for services 120,000 155,575
Convertible debt exchanged for common stock    387,547
Deemed dividend on Series J convertible preferred stock $ (651,182)