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Management's Liquidity Plans
6 Months Ended
Jun. 30, 2011
Management's Liquidity Plans
2. Management’s Liquidity Plans

Since inception, the Company has financed its operations primarily through product sales to customers and debt and equity financing agreements. As of June 30, 2011, the Company had $111,887 in cash and a working capital deficiency of $337,218 which represents decreases of $1,285,696 and $1,396,202 from December 31, 2010, respectively.  During the six months ended June 30, 2011, the Company generated revenue of $4,804,273 and a net loss of $2,171,373.  For the six months ended June 30, 2011, cash flows included net cash used in operating activities of $1,006,680 and net cash used in investing activities of $279,016.

Management believes that the Company has taken certain steps to improve its operations and cash flows, including improved inventory management and an increase in the number of suppliers. The acquisition of Hocks.com (see note 11) is also expected to improve the operating productivity and efficiency of the Company’s expenditures for selling, general and administrative activities. Further the Company has taken additional steps to increase the profitability derived from the acquisition of Hocks.com including significantly increasing the gross margin while decreasing the amounts spent on rent and payroll related expenses. Management believes that this plan will be successful, but there can be no such assurance.


Subsequent to June 30, 2011, the Company raised approximately $1,500,000 from the sale of 428,572 shares of common stock. Considering its financial resources and current operating projections, the Company believes that its financial resources will be sufficient to fund its operation through at least the next twelve months. Management believes that if the Company needs to raise additional capital in order to meet operations and execute its business plan, it will be successful. However, there is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.