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, 2013
Dec. 31, 2012
Cash Flows from Operating Activities    
Net Income (Loss) $ (10,146,228) $ 322,840
Non-Cash Adjustments    
Depreciation and Amortization 377,840 468,817
Impairment of Patents and Trademarks 73,423 64,703
Stock-Based Compensation Expense 159,272 172,233
Loss on Sale of Assets 40,352 0
Interest Converted into Common Stock 222,032 0
Amortization of Term Debt Discount 25,302 777,550
Amortization and Write-off of Term Debt Discount 732,584 0
Amortization and Write-off of Debt Issuance Costs 257,692 0
Warrants Issued for Debt Extinguishment 97,913 0
Loss on Derivative Liability Valuation 3,575,278 0
Gain on Sale of Discontinued Operations 0 (5,817,807)
Forgiveness of Debt 0 46,037
Non Cash Compensation   74,073
(Increase) Decrease in Operating Assets    
Accounts Receivable (44,320) 607,885
Inventories (266,446) 717,499
Prepaid Expenses and Other Assets (37,993) 14,857
Increase (Decrease) in Operating Liabilities    
Accounts Payable (379,634) (912,122)
Accrued Expenses 34,592 99,832
Customer Deposits 107,698 (329,073)
Income Taxes Payable 54,365 1,386
Accrued Compensation 0 200,000
Accrued Interest 24,728 667,994
Net Cash Flows (Used in) Provided by From Operating Activities (5,091,550) (2,823,296)
Cash Flows from Investing Activities    
Proceeds from Sale of Assets, Net of Direct Costs 0 7,520,197
Purchases of Tooling and Equipment (145,929) (180,189)
Investments in Software (240,561) 0
Investments in Patents and Trademarks (72,704) (67,923)
Net Cash (Used in ) Provided by From in Investing Activities (459,194) 7,272,085
Cash Flows from Financing Activities    
Issuance of Common Stock in Public Offering 8,050,000 0
Direct Offering Associated Costs (1,204,779) (57,500)
Net Change in Lines of Credit (112,500) (539,581)
Repayment of Capital Leases (55,733) (92,739)
Repayment of Long-Term Debt and Short-Term Notes Payable (2,137,983) (4,474,879)
Issuance Costs of Senior Convertible Debt (183,809) 0
Proceeds from Exercise of Warrants 56,250 0
Proceeds from Senior Convertible Debt 1,000,000 0
Proceeds from Notes Payable 382,884 364,488
Net Cash Flows (Used in) Provided by Financing Activities 5,794,330 (4,800,211)
Net Increase (Decrease) in Cash and Cash Equivalents 243,586 (351,422)
Cash and Cash Equivalents — Beginning of Period 66,554 417,976
Cash and Cash Equivalents — End of Period 310,140 66,554
Supplemental Disclosures    
Interest Paid 230,112 170,512
Income Taxes Paid 32,533 19,012
Non-Cash Investing and Financings Activities    
Conversion of Accrued Compensation and Interest into Common Stock 1,642,569 0
Conversion of Term Debt and Accrued Interest into Common Stock 2,316,007 0
Warrant Derivative Liability of Common Stock Offering and Debt Conversions 8,236,786 0
Discount on senior convertible debenture attributed to warrants 732,584 0
Warrants granted to Senior Debt Holders for Early Debt Repayment 97,913 0
Warrants granted for senior convertible debenture issuance costs $ 66,603 $ 0