Three Months Ended

September 30,

Nine Months Ended

September 30,

2014

2013

2014

2013

REVENUES

Equipment sales

$

16,624

$

118,728

$

101,069

$

233,928

Service revenue

35,997

-

79,872

-

Other revenue

-

7,182

4,860

8,462

     Total revenues

52,621

125,910

185,801

242,390

COST OF GOODS SOLD

25,289

80,450

104,621

154,100

GROSS PROFIT

27,332

45,460

81,180

88,290

EXPENSES:

Selling, general and administrative

677,398

762,321

2,194,809

2,164,492

Impairment of goodwill

-

-

390,659

-

Research and development

11,729

55,465

179,993

190,451

Total expenses

689,127

817,786

2,765,461

2,354,943

LOSS FROM OPERATIONS

(661,795)

(772,326)

(2,684,281)

(2,266,653)

OTHER INCOME AND EXPENSE:

Interest income

1

989

75

2,023

Interest expense

(130,135)

(50,462)

(303,167)

(100,105)

     Total other income and expense

(130,134)

(49,473)

(303,092)

(98,082)

LOSS BEFORE INCOME TAXES

(791,929)

(821,799)

(2,987,373)

(2,364,735)

Income taxes

(25)

-

(75)

-

     NET LOSS

$

(791,954)

$

(821,799)

$

(2,987,448)

$

(2,364,735)

Preferred stock cumulative dividend

53,054

213,760

112,208

238,596

Deemed dividend

26,832

-

26,832

-

Net loss attributable to common stockholders

$

(871,840)

$

(1,035,559)

$

(3,126,488)

$

(2,603,331)

Net loss per common share basic and diluted

$

(0.10)

$

(0.13)

$  (0.37)

$  (0.65)

Weighted average shares outstanding used in

calculating net loss per common share

8,433,752

7,837,262

8,366,014

4,011,974