Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF OPERATIONS

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Sales of Products $ 1,856,806 $ 2,692,152
Sales of Engineering Services 532,247 536,076
Total Sales 2,389,053 3,228,228
Cost of Sales — Products 1,354,909 2,135,484
Cost of Sales — Engineering Services 227,186 205,542
Total Cost of Sales 1,582,095 2,341,026
Gross Profit 806,958 887,202
Operating Expenses:    
Research and Development 1,751,397 1,153,403
Selling and Marketing 1,091,514 1,225,154
General and Administrative 2,165,341 2,181,310
Depreciation and Amortization 377,840 468,817
Impairment of Patents and Trademarks 73,423 64,703
Total Operating Expenses 5,459,515 5,093,387
(Loss) from Continuing Operations (4,652,557) (4,206,185)
Other Income (Expense)    
Interest and Other (Expense) Income 0 232
Other Taxes (88,274) (20,398)
Foreign Exchange Gain (Loss) (13,692) (11,111)
(Loss) on Sale of Assets (40,352) 0
(Loss) on Debt Extinguishment (Note 19) (1,272,296) 0
Gain (Loss) on Derivative Valuation (Note 17) (3,575,278) 0
Interest Expense (503,779) (509,925)
Total Other Income (Expense) (5,493,671) (541,202)
(Loss) from Continuing Operations Before Provision for Income Taxes (10,146,228) (4,747,387)
Provision (Benefit) for Income Taxes (Note 21) 0 0
(Loss) from Continuing Operations (10,146,228) (4,747,387)
Income (Loss) from Discontinued Operations (Note 4) 0 (747,580)
Gain on Disposal of Discontinued Operations (Note 5), net of tax 0 5,817,807
Net Income (Loss) $ (10,146,228) $ 322,840
Earnings (Loss) per Share from Continuing Operations (Note 6)    
Basic $ (1.69) $ (1.34)
Diluted $ (1.69) [1],[2] $ (1.34) [1],[2]
Earnings (Loss) per Share    
Basic $ (1.69) $ 0.09
Diluted $ (1.69) [1] $ 0.09 [1]
Weighted-average Shares Outstanding    
Basic 5,988,595 3,536,865
Diluted 5,988,595 3,651,100
[1] Due to net loss for period, dilutive loss per share is the same as basic.
[2] Due to the antidilutive impact of the convertible debt under the if-converted method, the diluted earnings per share is the same as basic.