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, 2014
Dec. 31, 2013
ASSETS    
Cash and cash equivalents $ 428,537 $ 31,417
Accounts receivable 178,362 147,635
Inventories, net of $50,000 reserve at March 31, 2013 and December 31, 2012 786,752 736,676
Prepaid income taxes 7,381 7,381
Prepaid expenses and other current assets 228,972 85,573
Total current assets 1,630,004 1,008,682
PROPERTY AND EQUIPMENT, NET 55,714 58,102
Intangible assets, net 24,340 36,498
TOTAL ASSETS 1,710,058 1,103,282
LIABILITIES AND STOCKHOLDERS' DEFICIT    
Accounts payable 1,012,785 1,102,772
Accrued employee compensation 131,351 149,333
Accrued professional fees and other 569,270 615,244
Deferred revenue 23,774 28,189
Promissory note    75,000
Related party debt 5,249 25,182
Convertible debt, net of debt discount of $201,275 at March 31, 2014 and $331,806 at December 31, 2013 171,727 281,796
Other debt 55,294 89,989
Warrant derivative liability 585,281 344,570
Conversion option liability 393,519 356,197
Total current liabilities 2,948,250 3,068,272
LONG TERM LIABILITIES    
Deferred revenue 2,785 2,785
TOTAL LIABILITIES 2,951,035 3,071,057
STOCKHOLDERS' DEFICIT    
Series D convertible preferred stock, $.01 par value; 850 shares authorized; 300 shares issued and outstanding on March 31, 2014 and on December 31, 2013 3 3
Series G convertible preferred stock, $.01 par value; 240,000 shares authorized; 145,320 shares issued and outstanding on March 31, 2014 and on December 31, 2013 1,453 1,453
Series H convertible preferred stock, $.01 par value; 10,000 shares authorized; 10,000 shares issued and outstanding on March 31, 2014 and on December 31, 2013 100 100
Series J convertible preferred stock, $.01 par value; 6,250 shares authorized; 5,088 shares issued and outstanding on March 31, 2014 and on December 31, 2013 51 51
Series K convertible preferred stock, $0.01 par value, 15,000 shares authorized, 10,729 shares issued and outstanding at March 31, 2014 and 4,000 shares issued and outstanding 107 40
Common stock, $.01 par value; 50,000,000 shares authorized; 12,624,267 shares issued and outstanding on March 31, 2014 and 12,024,267 on December 31, 2013 126,243 120,243
Warrants to acquire preferred stock and common stock 4,856,876 4,267,402
Additional paid-in capital 22,725,887 19,509,921
Accumulated deficit (28,951,697) (25,866,988)
Total stockholders' deficit (1,240,977) (1,967,775)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,710,058 $ 1,103,282