Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 2,630,000 $ 2,425,000
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization of property and equipment 45,000 98,000
Amortization of intangibles   200,000
Stock-based compensation 94,000 79,000
Loss on disposal of property and equipment   47,000
Gain on liquidation of MyLexxus Europe   (65,000)
Deferred income taxes (56,000) (30,000)
Changes in assets and liabilities:    
Accounts receivable (24,000) 10,000
Inventories, net 236,000 (345,000)
Other current assets (95,000) 107,000
Other assets (5,000) 169,000
Accounts payable (826,000) (908,000)
Income taxes payable (1,000) (332,000)
Accrued distributor commissions 117,000 462,000
Other accrued expenses 203,000 (319,000)
Deferred revenue (140,000) (67,000)
Other current liabilities 36,000 (68,000)
Net cash provided by operating activities 2,214,000 1,463,000
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (96,000) (7,000)
Decrease (increase) in restricted cash 493,000 (72,000)
Net cash reduction from liquidation of MyLexxus Europe   (57,000)
Net cash provided by (used in) investing activities 397,000 (136,000)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Advance from related party   233,000
Repayment to related party   (237,000)
Repurchase of common stock (3,000)  
Net cash used in financing activities (3,000) (4,000)
Effect of exchange rates on cash and cash equivalents (18,000) (354,000)
Net increase in cash and cash equivalents 2,590,000 969,000
CASH AND CASH EQUIVALENTS, beginning of period 1,617,000 648,000
CASH AND CASH EQUIVALENTS, end of period $ 4,207,000 $ 1,617,000