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14. Restatement

12 Months Ended

Dec. 31, 2011

14. RESTATEMENT

Due to an accounting error, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2010 to reflect a correction to an understatement of deferred income that results from allocating the revenue received under extended warranty arrangements over the life of the warranty. In addition the Company is restating the December 31, 2010 consolidated financial statements due to the reclassification of common stock that was issued to a holder of a note payable. The Company had originally recorded the issuance of the stock as a payment in full for the note and related costs however after a further review of the legal documents it was determined that the debt was not satisfied but instead the ultimate resolution of the debt was contingent on events that were still unfolding. The Company’s summarized consolidated financial statement elements comparing the restated financial statement elements to those originally filed are as follows:

Consolidated Financial Statement Elements as of the year ended December 31, 2010

	Original			Restated			Change
Consolidated Balance Sheet:
Stock settlement payable		0			163,366			163,366
Deferred income		42,153			158,270			116,117
Current liabilities		1,351,275			1,630,758			279,483
Total liabilities		1,361,427			1,640,910			279,483
Stock settlement in process		0			163,366			163,366
Accumulated Deficit
Beginning of year		(22,324,434	)		(22,398,759	)		(74,325	)
End of year		(22,837,787	)		(22,953,904	)		(116,117	)
Total stockholders’ deficit		( 201,081	)		(480,564	)		(279,483	)

Consolidated Statement of Operations:
Revenue		768,026			726,234			(41,792	)
Gross profit		544,728			502,936			(41,792	)
Loss from operations		(485,081	)		(526,873	)		(41,792	)
Net loss		(513,353	)		(555,145	)		(41,792	)

Consolidated Statement of Cash Flows:
Net loss		(513,353	)		(555,145	)		(41,792	)
Change in deferred revenue		(87,400	)		(45,608	)		41,792