Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Current assets    
Cash and cash equivalents $ 202,539 $ 509,605
Accounts receivable 1,521,667 383,859
Inventory 2,360,616   
Prepaid expenses and other assets 53,041 63,132
Total current assets 4,137,863 956,596
Property and Equipment, net 136,658 173,072
License, net 67,647 70,589
Prepaid expenses and other assets 18,669 23,539
Debt issuance costs, net 569,966 700,011
Customer acquisition costs 1,087,755   
Total assets 6,018,558 1,923,807
Current liabilities    
Accounts payable and accrued expenses 749,317 275,145
Accrued legal and consulting fees 264,453 365,348
Accrued salaries and benefits 415,304 377,213
Accrued interest - related party 31,318 247,696
Deferred revenue 2,760,028   
Customer credits 970,500   
Advances payable - related party    4,167
Convertible note payable    50,000
Notes payable 600,000 300,000
Other Current liabilities 250,000 261,036
Total current liabilities 6,040,920 1,880,605
Convertible promissory notes payable 4,870,406 4,675,673
Accrued interest 425,657 273,877
Total liabilities 11,336,983 6,830,155
Stockholders' deficit    
Preferred stock, $.001 par value: 2,000,000 shares authorized      
Common stock; $.001 par value; 100,000,000 shares authorized; 39,694,067 shares issued and outstanding as of June 30, 2014, 35,299,429 shares issued and outstanding as of December 31, 2013 39,694 35,299
Additional paid-in capital 18,155,645 13,789,473
Accumulated deficit (23,513,764) (18,731,120)
Total stockholders' deficit (5,318,425) (4,906,348)
Total liabilities and stockholders' deficit $ 6,018,558 $ 1,923,807