Nevada
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20-0754724
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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Large
accelerated filer o
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Accelerated
filer o
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Non-accelerated
filer o
(do
not check if smaller reporting company)
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Smaller
reporting company x
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Page
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Item
1.
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Financial
Statements
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3
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|
||
Condensed
Consolidated Balance Sheets as of December 31, 2008 (unaudited) and June
30, 2008
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3
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Condensed
Consolidated Statements of Operations for the three months and six months
ended December 31, 2008 and 2007
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4
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Consolidated
Statements of Cash Flows for the six
months ended December
31, 2008 and 2007.
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5
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Notes
to Consolidated Financial Statements
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6
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
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10
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Item
3.
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Quantitative
and Qualitative Disclosures about Market Risk
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16
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Item
4T.
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Controls
and Procedures
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17
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PART
II
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Item
1.
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Legal
Proceedings
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18
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Item
1A.
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Risk
Factors
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18
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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18
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Item
3.
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Defaults
Upon Senior Securities
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18
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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18
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Item
5.
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Other
Information
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18
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Item
6.
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Exhibits
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18
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SIGNATURES
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19
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December
31, 2008
(Unaudited)
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June
30, 2008
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|||||||
ASSETS
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||||||||
CURRENT
ASSETS
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||||||||
Cash
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$ | 115,193 | $ | 287,641 | ||||
Accounts
receivable
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600 | - | ||||||
Inventory
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245,152 | 322,793 | ||||||
Investments
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3,000 | 6,000 | ||||||
TOTAL
CURRENT ASSETS
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363,945 | 616,434 | ||||||
EQUIPMENT, net of
accumulated depreciation
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530,204 | 541,568 | ||||||
PREPAID
FINANCING COSTS
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143,156 | 125,464 | ||||||
INTANGIBLES, net of
accumulated amortization
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139,614 | 137,556 | ||||||
TOTAL
ASSETS
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$ | 1,176,919 | $ | 1,421,022 | ||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
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||||||||
CURRENT
LIABILITIES
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||||||||
Accounts
payable and accrued expenses
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$ | 327,168 | $ | 299,152 | ||||
Accrued
interest
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424,134 | 325,495 | ||||||
Unearned
revenue
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76,374 | - | ||||||
Loss
contingency payable
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592,312 | 592,312 | ||||||
Current
portion of long-term debt
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706,478 | 401,821 | ||||||
TOTAL
CURRENT LIABILITIES
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2,126,466 | 1,618,780 | ||||||
NOTES PAYABLE, net of
debt discount and current portion
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322,515 | 220,438 | ||||||
TOTAL
LIABILITIES
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2,448,981 | 1,839,218 | ||||||
STOCKHOLDERS’
DEFICIT
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||||||||
Preferred
stock, par value $0.001 per share
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||||||||
Authorized
– 4,000,000 shares
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||||||||
Issued
and outstanding – 0 shares
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- | - | ||||||
Common
stock, par value $0.001 per share
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||||||||
Authorized
– 100,000,000 shares
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||||||||
Issued
and outstanding – 24,915,372 and 24,446,353, respectively
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24,915 | 24,446 | ||||||
Additional
paid-in capital
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11,914,216 | 11,317,575 | ||||||
Less receivable
for stock
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(50,000 | ) | (50,000 | ) | ||||
Accumulated
deficit
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(13,161,193 | ) | (11,710,217 | ) | ||||
TOTAL
STOCKHOLDERS’ DEFICIT
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(1,272,062 | ) | (418,196 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$ | 1,176,919 | $ | 1,421,022 |
For
the Three Months Ended
December
31,
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For
the Six Months Ended
December
31,
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|||||||||||||||
2008
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2007
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2008
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2007
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|||||||||||||
REVENUES
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$ | 219,320 | $ | 218,071 | $ | 342,117 | $ | 422,282 | ||||||||
COST
OF REVENUES
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107,293 | 162,443 | 164,782 | 269,247 | ||||||||||||
GROSS
PROFIT
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112,027 | 55,628 | 177,335 | 153,035 | ||||||||||||
EXPENSES
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||||||||||||||||
General
and administrative
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662,994 | 731,988 | 1,167,727 | 1,752,426 | ||||||||||||
Research
and development
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41,376 | 43,110 | 82,847 | 81,997 | ||||||||||||
TOTAL
EXPENSES
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704,370 | 775,098 | 1,250,574 | 1,834,423 | ||||||||||||
(LOSS)
FROM OPERATIONS
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(592,343 | ) | (719,470 | ) | (1,073,239 | ) | (1,681,388 | ) | ||||||||
OTHER
INCOME (EXPENSE)
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||||||||||||||||
Unrealized
loss on securities
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- | - | (3,000 | ) | - | |||||||||||
Gain
on disposal of fixed asset
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5,725 | - | 5,725 | - | ||||||||||||
Interest
expense
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(209,575 | ) | (74,885 | ) | (380,462 | ) | (158,102 | ) | ||||||||
TOTAL
OTHER INCOME (EXPENSE)
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(203,850 | ) | (74,885 | ) | (377,737 | ) | (158,102 | ) | ||||||||
(LOSS)
BEFORE INCOME TAXES
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(796,193 | ) | (794,355 | ) | (1,450,976 | ) | (1,839,490 | ) | ||||||||
Income
tax expense
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- | - | - | - | ||||||||||||
NET
(LOSS)
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$ | (796,193 | ) | $ | (794,355 | ) | (1,450,976 | ) | (1,839,490 | ) | ||||||
NET
(LOSS) PER COMMON SHARE
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||||||||||||||||
Basic
and diluted
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$ | (0.03 | ) | $ | (0.04 | ) | (0.06 | ) | (0.09 | ) | ||||||
WEIGHTED
AVERAGE NUMBER OF
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||||||||||||||||
COMMON
SHARES OUTSTANDING
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||||||||||||||||
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24,573,894 | 21,364,312 | 24,510,123 | 21,364,312 |
2008
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2007
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|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
(loss)
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$ | (1,450,976 | ) | $ | (1,839,490 | ) | ||
Adjustments
to reconcile net (loss) to net cash
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||||||||
(used)
by operating activities:
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||||||||
Non-cash
compensation
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36,313 | 1,117,910 | ||||||
Stock
issued for services
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284,562 | - | ||||||
Depreciation
expense
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61,296 | 10,920 | ||||||
Amortization
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1,248 | 986 | ||||||
Gain
on disposal of fixed asset
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(5,725 | ) | - | |||||
Unrealized
loss on securities
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3,000 | - | ||||||
Amortization
of debt discount
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217,970 | 148,406 | ||||||
Changes
in operating assets and liabilities:
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||||||||
Accounts
receivable
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(600 | ) | 705 | |||||
Inventory
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77,641 | (192,923 | ) | |||||
Prepaid
financing costs
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50,558 | - | ||||||
Accounts
payable and accrued liabilities
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28,015 | (170,395 | ) | |||||
Accrued
interest
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98,639 | - | ||||||
Unearned
revenue
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76,374 | - | ||||||
NET
CASH (USED) BY OPERATING ACTIVITIES
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(521,685 | ) | (923,881 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Purchase
of equipment
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(44,207 | ) | (54,460 | ) | ||||
Patents
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(3,306 | ) | - | |||||
NET
CASH (USED) BY INVESTING ACTIVITES
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(47,513 | ) | (54,460 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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||||||||
Proceeds
from note payable, net of fees
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396,750 | 736,750 | ||||||
Prepayments
of notes payable
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- | (296,170 | ) | |||||
NET
CASH PROVIDED BY FINANCING ACTIVITES
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396,750 | 440,580 | ||||||
NET
(DECREASE) IN CASH
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||||||||
AND
CASH EQUIVALENTS
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(172,448 | ) | (537,761 | ) | ||||
CASH
AND CASH EQUIVALENTS
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||||||||
AT
THE BEGINNING OF
THE
PERIOD
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287,641 | 1,229,978 | ||||||
CASH
AND CASH EQUIVALENTS
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||||||||
AT
THE END OF THE PERIOD
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$ | 115,193 | $ | 692,217 | ||||
SUPPLEMENTAL
DISCLOSURE OF
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||||||||
CASH
FLOW INFORMATION
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||||||||
Interest
paid
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$ | 12,500 | $ | 40,946 | ||||
Taxes
paid
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$ | - | $ | - |
December
31, 2008
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||||
Raw
materials
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$ | 148,562 | ||
Work
in process
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96,590 | |||
Finished
goods
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- | |||
Total
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$ | 245,152 |
December
31, 2008
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||||
Furniture
and fixtures
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$ | 17,018 | ||
Computer
equipment
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30,579 | |||
Equipment
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166,602 | |||
Demo
units
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73,160 | |||
3DEO
Kiosks
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438,912 | |||
726,271 | ||||
Less
accumulated depreciation
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(196,067 | ) | ||
Total
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$ | 530,204 |
December
31, 2008
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||||
Patents
in process
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$ | 90,286 | ||
Patents
issued
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58,037 | |||
148,323 | ||||
Less
accumulated amortization
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(8,709 | ) | ||
Total
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$ | 139,614 |
December
31, 2008
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||||
Convertible
notes payable, annual interest rate of 10%, due dates range from May 2010
to December 2010 convertible into common stock at a rate of $0.75 to $1.50
per share.
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$ | 2,070,000 | ||
Convertible
note payable, annual interest rates range from 8% to 4%, due March 8,
2009, convertible into common stock at a rate of $1 per
share.
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750,000 | |||
Unamortized
debt discount
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(1,791,007 | ) | ||
1,028,993 | ||||
Less
current portion
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(706,478 | ) | ||
Notes
payable, net of current portion
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$ | 322,515 |
ITEM
2.
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
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·
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Our
ability to attract and retain management, and to integrate and maintain
technical information and management information
systems;
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·
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Our
ability to raise capital when needed and on acceptable terms and
conditions;
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·
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The
intensity of competition; and
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·
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General
economic conditions.
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ITEM
3.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
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ITEM
4T.
|
CONTROLS
AND PROCEDURES.
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ITEM
1.
|
LEGAL
PROCEEDINGS.
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ITEM
1A.
|
RISK
FACTORS.
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|
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES.
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS.
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ITEM
5.
|
OTHER
INFORMATION.
|
ITEM
6.
|
EXHIBITS.
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Exhibit
Number
|
Description
|
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31.1
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Certification
by Chief Executive Officer and Chief Financial Officer required by Rule
13a-14(a) or Rule 15d-14(a) of the Exchange Act.
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32.1
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Certification
by Chief Executive Officer and Chief Financial Officer, required by Rule
13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of
Chapter 63 of Title 18 of the United States
Code.
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PROVISION HOLDING, INC. | |||
February
23, 2009
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By:
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/s/ Curt Thornton | |
Curt Thornton | |||
Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer | |||
(Principal Financial Officer and Accounting Officer) and Director |