Quarterly report pursuant to Section 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)
 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 1,353,000 $ 188,000
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization of property and equipment 20,000 58,000
Amortization of intangibles   200,000
Stock-based compensation 40,000 35,000
Deferred income taxes   (1,000)
Changes in assets and liabilities:    
Accounts receivable (118,000) (19,000)
Inventories, net (170,000) (431,000)
Other current assets (97,000) (577,000)
Other assets (6,000) 84,000
Accounts payable 271,000 (502,000)
Income taxes payable 55,000 18,000
Accrued distributor commissions 347,000 (16,000)
Other accrued expenses 278,000 (107,000)
Deferred revenue 661,000 1,654,000
Other current liabilities (48,000) (1,000)
Net cash provided by operating activities 2,586,000 583,000
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (65,000) (9,000)
Decrease (increase) in restricted cash 494,000 (72,000)
Net cash provided by (used in) investing activities 429,000 (81,000)
CASH FLOWS FROM FINANCING ACTIVITIES    
Advance from related party   233,000
Net cash provided by financing activities   233,000
Effect of exchange rates on cash and cash equivalents 5,000 54,000
Net increase in cash and cash equivalents 3,020,000 789,000
CASH AND CASH EQUIVALENTS, beginning of period 1,617,000 648,000
CASH AND CASH EQUIVALENTS, end of period $ 4,637,000 $ 1,437,000