Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Balance Sheets (Unaudited)

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
CURRENT ASSETS    
Cash and cash equivalents $ 38,175 $ 473,948
Accounts receivable 349,958 272,022
Inventories, net of $50,000 reserve at June 30, 2015 and December 31, 2014 783,891 850,552
Prepaid income taxes 7,381 7,381
Prepaid expenses and other current assets 151,481 104,204
Total current assets 1,330,886 1,708,107
Property and equipment, net 30,500 36,025
TOTAL ASSETS 1,361,386 1,744,132
CURRENT LIABILITIES    
Accounts payable 979,479 1,035,781
Accrued employee compensation 153,269 157,347
Accrued professional fees and other 803,789 719,432
Deferred revenue 73,364 27,117
Convertible debt, net of debt discount of $1,176,668 and $328,681, respectively 1,083,353 1,004,513
Other debt 740,839 80,480
Warrant derivative liability 124,643 159,875
Conversion option liability 1,731,650 590,341
Total current liabilities $ 5,690,386 3,774,886
LONG TERM LIABILITIES    
Deferred revenue   28,977
TOTAL LIABILITIES $ 5,690,386 $ 3,803,863
COMMITMENTS AND CONTINGENCIES (Note 4)    
STOCKHOLDERS' DEFICIT    
Common stock, $.01 par value; 65,000,000 shares authorized; 19,939,131 and 18,673,390 shares issued and outstanding on June 30, 2015 and December 31, 2014, respectively $ 199,391 $ 186,734
Warrants to acquire common stock 5,347,054 5,253,566
Additional paid-in capital 25,037,861 24,617,564
Accumulated deficit (34,914,425) (32,118,714)
Total stockholders' deficit (4,329,000) (2,059,731)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 1,361,386 1,744,132
Series D Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value 3 3
Series G Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value 866 866
Series H Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value $ 100 $ 100
Series H2 Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value    
Series J Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value $ 36 $ 36
Series K Convertible Preferred Stock [Member]    
STOCKHOLDERS' DEFICIT    
Convertible Preferred Stock, value $ 114 $ 114