Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (3,700,000) $ (2,995,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization of intangible assets 23,000 31,000
Stock compensation expense for options and warrants issued to employees and non-employees 30,700 149,000
Issuance of shares for services 2,373,000 746,000
Amortization of debt discounts 284,000 441,000
Change in value of warrant and derivative liabilities (854,000) 15,000
Changes in operating assets and liabilities:    
Inventory (12,000) (76,000)
Other assets 83,000   
Accounts payable and accrued expenses 533,000 154,000
Net cash used in operating activities (963,000) (1,535,000)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from sale of preferred stock    250,000
Proceeds from the exercise of options and warrants 24,000 46,000
Proceeds from notes payable 977,000   
Repayment of notes payable      
Net cash provided by financing activities 1,001,000 296,000
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 38,000 (1,239,000)
CASH AND CASH EQUIVALENTS - Beginning of period 54,000 1,293,000
CASH AND CASH EQUIVALENTS - End of period $ 92,000 $ 54,000