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, 2011
Dec. 31, 2010
IncomeStatementAbstract    
NET SALES $ 88,891 $ 77,725
LICENSING FEES 15,000 5,000
TOTAL REVENUE 103,891 82,725
COSTS AND EXPENSES:    
Cost of sales 138,252 51,807
Selling 13,729 96,790
General and Administrative 603,104 1,235,975
Professional fees and Consulting Expense 909,221 2,363,625
Research and Development 377,893 395,573
Total Operating Expenses 2,042,199 4,143,770
LOSS FROM OPERATIONS (1,938,308) (4,061,045)
OTHER INCOME (EXPENSE):    
Fair Value Adjustment of Derivative Liability 24,422 (2,223,991)
Vendor Settlements 0 4,116
Amortization of Bond Discount (142,412) (162,371)
Amortization of Deferred Finance Costs (43,984) 0
Finance costs paid in stocks and warrants (584,215) (665,218)
Interest Expense (47,113) (13,964)
Total Other Income (Expense) (793,303) (3,061,428)
NET LOSS $ (2,731,610) $ (7,122,473)
BASIC AND DILUTED LOSS PER SHARE $ (0.03) $ (0.08)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING 96,581,501 87,161,757