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 $)
 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 2,100,000 $ 1,821,000
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization of property and equipment 28,000 81,000
Amortization of intangibles   200,000
Stock-based compensation 60,000 57,000
Deferred income taxes   (1,000)
Changes in assets and liabilities:    
Accounts receivable (69,000) 12,000
Inventories, net (163,000) (362,000)
Other current assets 93,000 72,000
Other assets (4,000) 170,000
Accounts payable (416,000) (661,000)
Income taxes payable 68,000 (15,000)
Accrued distributor commissions 108,000 318,000
Other accrued expenses 51,000 (706,000)
Deferred revenue (205,000) 418,000
Other current liabilities (56,000) 33,000
Net cash provided by operating activities 1,595,000 1,437,000
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (88,000) (7,000)
Decrease (increase) in restricted cash 493,000 (72,000)
Net cash provided by (used in) investing activities 405,000 (79,000)
CASH FLOWS FROM FINANCING ACTIVITIES    
Advance from related party   233,000
Repayment to related party   (114,000)
Net cash provided by financing activities   119,000
Effect of exchange rates on cash and cash equivalents 34,000 (398,000)
Net increase in cash and cash equivalents 2,034,000 1,079,000
CASH AND CASH EQUIVALENTS, beginning of period 1,617,000 648,000
CASH AND CASH EQUIVALENTS, end of period $ 3,651,000 $ 1,727,000