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 $)
 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 3,071,000 $ 287,000
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 21,000 12,000
Stock-based compensation 25,000 30,000
Changes in assets and liabilities:    
Accounts receivable (39,000) (59,000)
Inventories, net (1,527,000) (28,000)
Other current assets (1,105,000) 232,000
Other assets   (2,000)
Accounts payable 1,381,000 428,000
Income taxes payable 28,000 12,000
Accrued distributor commissions 21,000 215,000
Other accrued expenses 1,040,000 (279,000)
Deferred revenue 5,320,000 304,000
Other current liabilities 47,000 (134,000)
Net cash provided by operating activities 8,283,000 1,018,000
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property and equipment, net (63,000) (14,000)
Net cash used in investing activities (63,000) (14,000)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from exercise of warrants 598,000  
Repurchase of common stock (24,000) (12,000)
Net cash provided by (used in) financing activities 574,000 (12,000)
Effect of exchange rates on cash and cash equivalents (10,000) (26,000)
Net increase in cash and cash equivalents 8,784,000 966,000
CASH AND CASH EQUIVALENTS, beginning of period 14,550,000 4,207,000
CASH AND CASH EQUIVALENTS, end of period 23,334,000 5,173,000
NON-CASH FINANCING ACTIVITY:    
Conversion of preferred stock 18,000  
Cash dividends declared, but not yet paid $ 158,000