Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,062,907) $ (833,365)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 29,323 40,587
Accretion of interest and amortization of debt issue costs 46,159 0
Stock-based compensation expense 8,868 68,966
Common stock issued to vendors 31,950 0
Change in fair value of warrant derivative liability 42,012 0
Changes in operating assets and liabilities:    
Accounts receivable 65,239 41,182
Inventories 47,718 (36,214)
Accounts payable 238,839 293,787
Accrued employee compensation 44,329 53,853
Deferred revenue and other accrued expenses (588) (84,682)
Prepaid expenses and other current assets (75,679) (52,166)
Net cash used in operating activities (584,737) (508,052)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment 0 (7,568)
Net cash used in investing activities 0 (7,568)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from stock option exercises 0 43,980
Net proceeds from the issuance of common stock 377,454 0
Net cash provided by financing activities 377,454 43,980
Change in cash and cash equivalents (207,283) (471,640)
Cash and cash equivalents, beginning of period 222,775 1,609,778
Cash and cash equivalents, end of period 15,492 1,138,138
SUPPLEMENTAL INFORMATION:    
Income taxes paid 1,900 1,900
Issuance of common stock dividend on preferred stock 0 76,017
Issuance of common stock for services 85,950 0
Convertible debt exchanged for common stock $ 387,547 $ 0