Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Statements of Cash Flows (Unaudited)

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
Cash flows from operating expenses:    
Net loss $ (518,214) $ (407,466)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 886 567
Amortization of debt issuance costs 22,415 22,415
Amortization of discount on convertible debentures 117,723 95,094
Interest income on short-term investment (8) (34)
Change in fair value of financial instruments 80,215 (219,495)
Stock-based compensation 30,695 113,485
Vesting of consultant stock 62,143   
Changes in operating assets and liabilities:    
Accounts receivable 7,888 (164,715)
Costs and estimated earnings in excess of billings on uncompleted contracts    (121,395)
Inventory 5,602 (33,530)
Prepaid expenses and other current assets 1,776 (2,088)
Accounts payable and accrued expenses (48,814) (15,910)
Accrued interest, related party 2,021 2,021
Accrued interest 41,440 30,240
Related party accounts payable and accrued expenses (108,243) (50,846)
Billings in excess of costs and estimated earnings -on uncompleted contracts (1,734) 73,335
Deferred revenue (202,759)   
Net cash used in operating activities (506,968) (678,322)
Cash flows used in investing activities    
Purchase of equipment (607) (2,086)
Net cash used in investing activities (607) (2,086)
Cash flows from financing activities:    
Expenditures on debt issuance costs (20,000) (28,000)
Proceeds from exercise of stock options 10,000   
Proceeds from issuance of convertible debentures and warrants   350,000
Net cash provided by (used in) financing activities (10,000) 322,000
Effect of exchange rate changes on cash    1,036
Net decrease in cash (517,575) (357,372)
Cash and cash equivalents - beginning of period 594,248 868,067
Cash and cash equivalents - end of period 76,673 510,695
Cash paid during the period for:    
Interest