Quarterly report pursuant to sections 13 or 15(d)

3. Accrued Liabilities (Tables)

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3. Accrued Liabilities (Tables)
 3 Months Ended
Mar. 31, 2013
Notes to Financial Statements  
Other accrued liabilities

Other accrued liabilities totaling $349,420 and $496,662 as of March 31, 2013 and December 31, 2102 are as follows:

 

    3/31/2013     12/31/2012  
Allowance for Sales Returns   $ 43,000     $ 53,000  
Distribution Arrangements Payable     184,351       217,858  
Deferred Revenue     63,102       110,177  
Royalties Payable     33,395       59,033  
Other Accrued Expenses     25,572       56,594  
Total Accrued Expenses   $ 349,420     $ 496,662  
Derivative liability activity

Derivative liability activity for the three months ending March 31, 2013 was as follows:

 

    March 31, 2013     December 31, 2012     (Gain) Loss on Derivative, 3 Months Ending
March 31, 2013 		 
Conversion feature of the June 27, 2012 Securities Purchase Agreement (see note 4)   $ 50,570     $ 15,743     $ 34,827  
5,000,000 Warrants     103,377       49,491       53,886  
380,952 Warrants     7,877       3,728       4,149  
Total   $ 161,824     $ 68,962     $ 92,862  
Fair market values of the Company's derivatives

Fair market values of the Company's derivatives as of March 31, 2013 were based on the Black Scholes valuation using the following assumptions:

 

    Conversion Feature     Warrants  
Risk-free interest rate     0.14%       0.77%  
Expected life in years     1.24       4.24  
Dividend yield     0       0  
Expected volatility     79.38%       68.41%