Quarterly report pursuant to Section 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)
 3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Cash flows from operating activities    
Net loss $ (3,646,036) $ (13,295)
Adjustments to reconcile net loss to net cash used in operating activities:    
Bad debt expense 9,000 7,000
Depreciation & Amortization 114,716 76,433
Amortization of financing costs 1,910 6,750
(Loss) on change in fair value of derivative liability (418,192)   
Interest expense related to warrants 3,332,508   
Equity interest in subsidiary    6,595
Non-cash interest expense 27,397 1,849
Changes in assets and liabilities:    
Account receivable-trade (522,319) 6,634
Inventories 78,014 (430,441)
Prepaid expenses and other current assets (235,914) 2,714
Deferred taxes    7,060
Accounts payable (446,504) (270,618)
Accrued expenses and other current liabilities (230,162) 137,080
Net cash used in operating activities (1,935,582) (462,239)
Cash flows from investing activities    
Purchase of property and equipment (242,427) (24,902)
Net cash used in investing activities (242,427) (24,902)
Cash flows from financing activities    
Proceeds from convertible debt 3,300,000 2,250,000
Proceeds from sale of common stock 650,000   
Payment of deferred financing costs    (150,364)
Borrowings from noteholders    406,647
Repayment of borrowings from noteholders (2,111,441) (29,597)
Payment to shareholder    (1,355)
Net cash provided by financing activities 1,838,559 2,475,331
Net increase (decrease) in cash and cash equivalents (339,450) 1,988,190
Cash and cash equivalents, beginning of period 416,333 251,475
Cash and cash equivalents, end of period 76,883 2,239,665
Supplemental disclosures of cash flow information:    
Interest paid $ 223,885 $ 107,742