Nevada		87-0549700
(State of other jurisdiction of incorporation or organization)		(I.R.S. employer identification No.)

PART I.		Financial Information
Item 1.		Financial Statements:
		Statement Regarding Forward-Looking Disclosure		3
		Unaudited Condensed Consolidated Balance Sheets—as of June 30, 2002 and December 31, 2001		3
		Unaudited Condensed Consolidated Statements of Operations—for the Three Months Ended June 30, 2002 and June 30, 2001 and for the Six Months Ended June 30, 2002 and June 30, 2001		5
		Unaudited Condensed Consolidated Statements of Cash Flow—for the Six Months Ended June 30, 2002 and June 30, 2001		6
		Notes to Unaudited Condensed Consolidated Financial Statements		8
Item 2.		Management’s Discussion and Analysis of Results of Operation and Financial Condition		16
PART II.		Other Information
Item 1.		Legal Proceedings		21
Item 2.		Changes in Securities and Use of Proceeds		21
Item 4.		Submission of Matters to a Vote of Security Holders		28
Item 5.		Other Events		29
Item 6.		Exhibits and Reports on Form 8-K		30
		Signatures		31

		June 30, 2002			December 31, 2001
					(As restated, see Note 3)
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	231,102		$	223,738
Investment in securities available-for-sale			1,564			688
Trade receivables, net of allowance for doubtful accounts			52,546			68,002
Other receivables			19,218			19,502
Inventory			415,146			445,976
Prepaid expenses			187,631			69,526
Total current assets			907,207			827,432
Equipment, net of accumulated depreciation and impairments			270,219			369,453
Deferred debt placement fees			—			477,650
Other assets, net of accumulated amortization			13,131			12,337
Total assets		$	1,190,557		$	1,686,872

		June 30, 2002				December 31, 2001
						(As restated, see Note 3)
CURRENT LIABILITIES
Trade accounts payable		$	688,101				746,699
Accrued liabilities			399,317				281,578
Accrued interest			511,135				174,892
Notes payable			62,500				—
Notes payable—related party, net of discount			5,535,000				3,098,216
Deferred revenue			30,000				30,000
Obligation under capital leases—current portion			5,076				5,076
Total Current Liabilities			7,231,129				4,336,461
Long-term Obligation Under Capital Leases			1,600				4,009
Mandatorily Redeemable 8% Preferred Stock—$0.001 par value; 1,000 shares authorized; 0 shares issued and outstanding; liquidation preference of $0			—				—
STOCKHOLDERS’ DEFICIT
Common stock to be issued			2,136,000				—
Common stock—$0.001 par value; 225,000,000 and 50,000,000 shares authorized; issued and outstanding: 31,459,945 shares at June 30, 2002 and 31,447,087 shares at December 31, 2001			31,459				31,447
Additional paid-in capital			48,349,178				48,023,183
Accumulated other comprehensive loss			(6,534	)			(7,409	)
Accumulated deficit			(56,552,275	)			(50,700,819	)
Total Stockholders’ Deficit			(6,042,172	)			(2,653,598	)
Total Liabilities and Stockholders’ Deficit		$	1,190,557			$	1,686,872

		For the Three Months Ended June 30								For the Six Months Ended June 30
		2002				2001				2002				2001
REVENUES:
Services		$	15,000			$	62,218			$	15,000			$	81,218
Royalties			—				7,062				—				16,441
Product sales			225,713				273,089				428,835				503,201
Total Revenue			240,713				342,369				443,835				600,860
COST OF SALES:
Services			5,542				41,557				5,542				57,904
Products			82,531				121,200				166,830				235,324
Total Cost of Sales			88,073				162,757				172,372				293,228
Gross Profit			152,640				179,612				271,463				307,632
EXPENSES
Research and development expense			176,707				120,378				323,304				274,177
Selling, general and administrative expenses			1,077,997				1,956,208				2,210,799				3,525,570
Amortization of goodwill			—				42,858				—				85,716
Total Expenses			1,254,704				2,119,444				2,534,103				3,885,463
Loss From Operations			(1,102,064	)			(1,939,832	)			(2,262,640	)			(3,577,831	)
Other Income/(Expense):
Interest expense			(2,599,969	)			(118,102	)			(3,616,579	)			(119,554	)
Other income			802				5,633				27,763				29,678
Net Loss			(3,701,231	)			(2,052,301	)			(5,851,456	)			(3,667,707	)
Net Loss Applicable To Common Stockholders		$	(3,701,231	)		$	(2,052,301	)		$	(5,851,456	)		$	(3,667,707	)
Basic and Diluted Net Loss Per Common Share			(0.12	)			(0.07	)			(0.19	)			(0.12	)
Weighted Average Number of Common Shares Used in Per Share Calculations			31,459,945				31,284,859	*			31,453,516				31,279,107	*

		For the Six Months Ended June 30,
		2002				2001
CASH FLOW FROM OPERATING ACTIVITIES
Net Loss		$	(5,851,456	)		$	(3,667,707	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of goodwill			—				85,716
Depreciation			110,730				65,013
Compensation expense from stock options			—				(37,169	)
Loss on sale of securities			—				3,290
Amortization of debt discount			426,542				95,514
Amortization of debt placement fees			710,150				—
Debt extension charge—related party			2,136,000				—
Consulting services paid with stock			11,250				12,000
Provision for doubtful accounts receivable			(6,900	)			11,545
Changes in operating assets and liabilities:
Accounts receivable			22,640				34,850
Inventory			30,830				(64,276	)
Prepaid expenses/other assets			(118,898	)			(277,630	)
Deferred revenue			—				30,000
Accounts payable			(58,598	)			(91,086	)