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 $)
 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Cash flows from operating activities    
Net loss $ (2,205,519) $ (4,360,474)
Adjustments to reconcile net loss to net cash used in operating activities:    
Bad debt expense 16,667 49,803
Depreciation & Amortization 256,736 238,734
Amortization of financing costs 3,821 3,821
(Loss) on change in fair value of derivative liability (511,736) (455,918)
Stock and warrant based compensation    120,000
Non-cash interest expense 845,286 4,314,978
Changes in assets and liabilities:    
Account receivable-trade (670,944) (787,994)
Inventories 126,240 (551,567)
Prepaid expenses and other current assets (80,615) (416,748)
Accounts payable 1,116,460 (9,021)
Accrued expenses and other current liabilities 521,857 (183,295)
Net cash used in operating activities (581,747) (2,037,681)
Cash flows from investing activities    
Purchase of property and equipment (45,946) (277,876)
Net cash used in investing activities (45,946) (277,876)
Cash flows from financing activities    
Proceeds from convertible debt 50,000 3,750,000
Proceeds from sale of common stock 950,000 650,000
Payment of deferred financing costs    (25,000)
Repayment of debt (80,132) (126,564)
Repayment of borrowings from noteholders    (2,175,000)
Advance from (payment to) shareholder      
Net cash provided by financing activities 919,868 2,073,436
Net increase (decrease) in cash and cash equivalents 292,175 (242,121)
Cash and cash equivalents, beginning of period 62,296 416,333
Cash and cash equivalents, end of period 354,471 174,212
Supplemental disclosures of cash flow information:    
Interest paid 111,799 256,482
Debt discount from warrant liability    $ 2,755,274