Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED BALANCE SHEET

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CONSOLIDATED BALANCE SHEET (USD $)
Dec. 31, 2011
Dec. 31, 2010
CURRENT ASSETS:    
Cash $ 225,696 $ 15,603
Inventories 0 10,554
Deferred Finance Costs 13,722 0
Prepaid Expenses 10,412 10,855
Total Current Assets 249,830 37,012
PROPERTY AND EQUIPMENT, NET 83,546 170,259
OTHER ASSETS:    
Definite-life intangible Assets, net 7,201 8,168
Deposits 122,917 124,482
Total Other Assets 130,118 132,650
TOTAL ASSETS 463,494 339,921
CURRENT LIABILITIES:    
Accounts Payable 660,565 455,592
Loan Payable, Related Party 100 12,000
Current portion, long term debt 7,682 3,516
Customer deposits 27,837 25,194
Obligation to Issue Common Stock 307,664 50,000
Convertible Debentures Payable, less discount of $18,936 and $875 at December 31, 2010 and 2011 84,226 157,064
Derivative Liability 528,566 0
Deferred Rent 96,347 0
Deferred Revenue, current 0 15,000
Accrued Liabilities 75,349 62,177
Total Current Liabilities 1,788,336 780,543
LONG TERM LIABILITIES:    
Convertible Debenture Payable, net of Discount of $71,037 and $577,106 at December 31, 2010 and 2011 423,393 104,063
Deferred Revenue, non-current 235,000 235,000
Deferred rent expense 48,264 171,995
Total Long term Liabilities 706,657 511,058
TOTAL LIABILITIES 2,494,993 1,291,601
COMMITMENTS AND CONTINGENCIES      
STOCKHOLDERS DEFICIT:    
Common stock, $.001 par value, 150,000,000 shares authorized; 92,705,026 and 100,036,350 issued and outstanding at December 31, 2010 and 2011 100,036 92,705
Additional Paid-In Capital 27,130,276 25,485,816
Accumulated deficit (29,261,809) (26,530,198)
Total Stockholders Deficit (2,031,497) (951,680)
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT $ 463,494 $ 339,921