Annual report pursuant to Section 13 and 15(d)

CONDENSED STATEMENTS OF CASH FLOWS

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CONDENSED STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (5,836,369) $ (2,272,612)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 14,088 15,794
Loss on disposal of property and equipment 1,322   
Change in accounts receivable reserve 79,534 35,465
Warrants issued with common stock 135,400 28,000
Stock issued for interest expense    12,500
Preferred Stock issued for compensation 200,000 1,156,708
Common Stock issued for services    233,502
Impairment of goodwill 4,799,965   
Changes in operating assets and liabilities:    
Accounts receivable (74,629) (33,700)
Inventory 258,300 (300,354)
Prepaid inventory (37,212) (14,776)
Notes receivable    (15,189)
Deposits 5,000   
Accounts payable 207,176 126,849
Due to officers (500)   
Net cash used in operations (247,925) (1,027,813)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Proceeds from sale of property and equipment 6,293   
Purchase of property and equipment (534) (30,969)
Cash assumed in reverse merger 35   
Net cash used in investing activities 5,794 (30,969)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of notes payable 264,306 250,000
Proceeds from issuance of notes payable to related parties 44,190 150,000
Payments on notes payable (150,000) (100,000)
Payments on notes payable to related parties (89,192) (10,000)
Proceeds from issuance of common stock and warrants 180,000 715,750
Net cash provided by financing activities 249,304 1,005,750
NET CHANGE IN CASH AND CASH EQUIVALENTS 7,173 (53,032)
CASH AND CASH EQUIVALENTS, beginning of period 9,139 62,171
CASH AND CASH EQUIVALENTS, end of period 16,312 9,139
Cash paid for interest      
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES    
Common stock issued for interest    12,500
Warrant expense $ 135,400 $ 28,000