Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)

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CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (USD $)
Mar. 31, 2013
Dec. 31, 2012
ASSETS    
Cash and cash equivalents $ 167,910 $ 1,461
Accounts receivable 278,020 216,265
Inventories, net of $50,000 reserve at March 31, 2013 and December 31, 2012 890,853 923,362
Prepaid income taxes 7,381 7,381
Prepaid expenses and other current assets 103,706 83,435
Total current assets 1,447,870 1,231,904
PROPERTY AND EQUIPMENT, NET 22,444 30,282
Deposits    6,472
Intangible assets, net 72,972 85,130
TOTAL ASSETS 1,543,286 1,353,788
LIABILITIES AND STOCKHOLDERS' DEFICIT    
Accounts payable 1,059,336 1,199,846
Accrued employee compensation 153,978 119,338
Accrued professional fees and other 376,901 267,936
Deferred revenue 29,809 46,466
Promissory note 75,000 75,000
Dividend liability    60,000
Related party debt 42,357 98,675
Convertible debt    863,004
Warrant derivative liability 206,257 160,812
Total current liabilities 1,943,638 2,891,077
LONG TERM LIABILITIES    
Deferred revenue 1,633 2,487
TOTAL LIABILITIES 1,945,271 2,893,564
STOCKHOLDERS' DEFICIT    
Series D convertible preferred stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on March 31, 2013 and on December 31, 2012 3 3
Series G convertible preferred stock, $.01 par value; 240,000 shares authorized; 145,320 shares issued and outstanding on March 31, 2013 and on December 31, 2012 1,453 1,453
Series J convertible preferred stock, $.01 par value; 6,250 shares authorized; 4,650 shares and 0 shares issued and outstanding on March 31, 2013 and on December 31, 2012, 47   
Series H convertible preferred stock, $.01 par value; 10,000 shares authorized; 0 shares issued and outstanding on March 31, 2013 and on December 31, 2012      
Common stock, $.01 par value; 50,000,000 shares authorized; 12,149,267 shares issued and outstanding on March 31, 2013 and on December 31, 2012 121,493 121,493
Warrants to acquire preferred stock and common stock 3,823,922 3,015,996
Additional paid-in capital 17,664,727 15,940,818
Accumulated deficit (22,013,628) (20,619,539)
Total stockholders' deficit (401,985) (1,539,776)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,543,286 $ 1,353,788