Delaware
(State
or Other Jurisdiction of
Incorporation
or Organization)
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22-3337365
(I.R.S.
Employer Identification No.)
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|
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3960
Howard Hughes Pkwy, Ste 460 Las Vegas, NV 89169
(Address
of Principal Executive Offices)
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(702)
697-0377
(Issuer's
Telephone Number,
Including
Area Code)
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PART
I - FINANCIAL INFORMATION
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3
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ITEM
1. Financial Statements
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3
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Condensed
Balance Sheet as of September 30, 2007
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3
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Condensed
Statements of Operations for the three months ended September 30,
2007 and
2006 and nine
months
ended September 30, 2007 and 2006.
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4
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Condensed
Statements of Cash Flows for the nine months ended September 30,
2007 and
2006
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5
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Notes
to Condensed Financial Statements
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6
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ITEM
2. Management’s Discussion and Analysis or Plan of
Operation
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9
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ITEM
3. Controls and Procedures
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12
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PART
II — OTHER INFORMATION
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13
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ITEM
1. Legal Proceedings
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13
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ITEM
2. Changes in Securities and Use of Proceeds
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13
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ITEM
3. Defaults Upon Senior Securities
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13
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ITEM
4. Submission of Matters to a Vote of Security Holders
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13
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ITEM
5. Other Information
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14
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ITEM
6. Exhibits and Reports on Form 8-K
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14
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Signatures
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15
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Certification
of Chief Executive Officer as Adopted
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Certification
of Chief Financial Officer as Adopted
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September
30,
2007
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||||
ASSETS
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||||
CURRENT
ASSETS:
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||||
Cash
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$
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793,810
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||
Accounts
receivable, net
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108,784
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|||
Inventory,
net
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96,907
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|||
Prepaid
expenses and other current assets
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25,051
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|||
Total
Current Assets
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1,024,552
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|||
PROPERTY
AND EQUIPMENT, Net
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105,131
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|||
OTHER
ASSETS:
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||||
Patents,
net
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39,994
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|||
Deposits
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120,300
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|||
Goodwill
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1,929,963
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|||
Deferred
financing costs, net
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1,123
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|||
Total
Other Assets
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2,091,380
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|||
Total
Assets
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$
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3,221,063
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||
CURRENT
LIABILITIES:
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||||
Accounts
payable and accrued expenses
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$
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501,554
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Accrued
salaries and payroll taxes
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47,970
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|||
Total
Current Liabilities
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549,524
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|||
LONG
TERM LIABILITES
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||||
Notes
payable - 2008, net
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1,633,521
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|||
Total
Liabilities
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2,183,045
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|||
STOCKHOLDERS'
EQUITY:
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||||
Preferred
Stock, $.001 par value, 10,000,000 shares authorized,
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||||
none
issued or outstanding
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-
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|||
Common
stock, $.001 par value, 140,000,000 shares
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||||
authorized,
39,010,936 issued and outstanding
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39,011
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|||
Additional
paid-in capital
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26,660,060
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|||
Accumulated
deficit
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(25,661,053
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)
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Total
Stockholders' Equity
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1,038,018
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|||
Total
Liabilities and Stockholders' Equity
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$
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3,221,063
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For
the three months ended
September
30,
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For
the nine months ended
September
30,
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||||||||||||
2007
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2006
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2007
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2006
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||||||||||
REVENUES
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$
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120,742
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$
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79,554
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$
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387,552
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$
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148,288
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|||||
COST
OF SALES
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64,123
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47,762
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252,467
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111,857
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|||||||||
GROSS
MARGIN
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56,619
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31,792
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135,085
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36,431
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|||||||||
COSTS
AND EXPENSES:
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|||||||||||||
Research
and development
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322,117
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117,356
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554,920
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337,982
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|||||||||
Selling,
general and administrative
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562,149
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842,351
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1,858,130
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2,488,291
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|||||||||
Depreciation
and amortization
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12,548
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4,011
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33,134
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18,355
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|||||||||
Total
Costs and Expenses
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896,814
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963,718
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2,446,184
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2,844,628
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|||||||||
LOSS
FROM OPERATIONS
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(840,195
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)
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(931,926
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)
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(2,311,099
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)
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(2,808,197
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)
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|||||
OTHER
INCOME (EXPENSE):
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|||||||||||||
Interest
income
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14,002
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453
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39,122
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4,791
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|||||||||
Interest
expense
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(157,517
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)
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(206,941
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)
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(471,108
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)
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(1,157,320
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)
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|||||
Total
Other Expenses, net
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(143,515
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)
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(206,488
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)
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(431,986
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)
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(1,152,529
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)
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NET
LOSS
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$
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(983,710
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)
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$
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(1,138,414
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)
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$
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(2,743,085
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)
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$
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(3,960,726
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)
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BASIC
AND FULLY DILUTED LOSS
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|||||||||||||
PER
COMMON SHARE
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$
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(0.03
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)
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$
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(0.05
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)
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$
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(0.07
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)
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$
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(0.17
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)
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WEIGHTED
AVERAGE COMMON
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|||||||||||||
SHARES
OUTSTANDING, BASIC
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38,559,934
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23,921,098
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37,953,824
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23,757,833
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For
the nine months ended September 30,
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|||||||
2007
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2006
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||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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|||||||
Net
loss
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$
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(2,743,085
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)
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$
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(3,960,726
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)
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Adjustments
to reconcile net loss to net cash used for operating
activities:
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|||||||
Depreciation
and amortization
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33,134
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18,355
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|||||
Loss
on disposal of property and equipment
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-
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586
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|||||
Amortization
of deferred financing costs
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10,105
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54,935
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|||||
Bad
debt expense
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-
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13,414
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|||||
Debt
discount related to issuance of debt securities
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236,618
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931,929
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|||||
Warrants
and options issued in connection with the issuance
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|||||||
of
debt securities, and to employees and consultants
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544,195
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889,717
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|||||
Common
stock issued for consulting services
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-
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90,000
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|||||
Changes
in assets and liabilities:
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|||||||
Accounts
receivable, net
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(76,592
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)
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(18,021
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)
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Inventory
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59,945
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379
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|||||
Prepaid
expenses and other assets
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45,417
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(30,830
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)
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||||
Deposits
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(86,425
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)
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-
|
||||
Accounts
payable and accrued expenses
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(35,580
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)
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53,362
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||||
Accrued
salaries and payroll taxes
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-
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4,681
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|||||
Net
Cash Used for Operating Activities
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(2,012,268
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)
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(1,952,219
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)
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CASH
FLOWS FROM INVESTING ACTIVITIES:
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|||||||
Costs
related to patents
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(6,926
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)
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-
|
||||
Purchase
of property and equipment
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(61,465
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)
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(88,303
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)
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Net
Cash Used for Investing Activities
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(68,391
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)
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(88,303
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)
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CASH
FLOWS FROM FINANCING ACTIVITIES:
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|||||||
Proceeds
from issuance of equity securities
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1,024,796
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-
|
|||||
Proceeds
from exercise of warrants
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167,200
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-
|
|||||
Payments
on notes payable
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(11,111
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)
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(25,000
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)
|
|||
Proceeds
from line of credit - related party
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-
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1,100,000
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|||||
Payments
to former officers
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-
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(25,112
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)
|
||||
Net
Cash Provided by Financing Activities
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1,180,885
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1,049,888
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|||||
Decrease
in cash
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(899,774
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)
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(990,634
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)
|
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Cash
at beginning of period
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1,693,584
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1,009,120
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|||||
Cash
at end of period
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$
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793,810
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$
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18,486
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Number
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Description
of Document
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10.1
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Manufacturing
Services Agreement, dated September 6, 2007 by and among the Company
and
Sanima-Sci Corporation; incorporated by reference to Exhibit 10.1
to the
Company’s Form 8-K filed on September 12, 2007. *
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31.1
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Certification
by the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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31.2
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Certification
by the Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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32.1
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Certification
by the Chief Executive Officer pursuant to Section 1350 of Chapter
63 of
Title 18 of the United States Code (18 U.S.C. 1350, as adopted pursuant
to
Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
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32.2
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Certification
by the Chief Financial Officer pursuant to Section 1350 of Chapter
63 of
Title 18 of the United States Code (18 U.S.C. 1350, as adopted pursuant
to
Section 906 of the Sarbanes-Oxley Act of 2002, filed
herewith.
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POWER
EFFICIENCY CORPORATION
|
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Date: November
14, 2007
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By:
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/s/
Steven Strasser
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Chief
Executive Officer
|
|||
Date: November
14, 2007
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By:
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/s/
John Lackland
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Chief
Financial Officer (Principal
Financial and
Accounting Officer)
|