x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
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Minnesota
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41-1301878
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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1407
South Kings Highway, Texarkana, TX
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75501
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(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer o
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Accelerated
filer o
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Non-Accelerated
filer o
(Do not check if a smaller reporting company)
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Smaller
reporting company x
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Item
1.
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Financial
Statements
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I-1
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Item
2.
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Management's
Discussion and Analysis of Financial Condition and Results of
Operations
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I-9
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk
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I-12
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Item
4.
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Controls
and Procedures
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I-12
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Item
1.
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Legal
Proceedings
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II-1
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Item
1A.
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Risk
Factors
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II-1
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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II-1
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Item
3.
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Defaults
Upon Senior Securities
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II-1
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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II-1
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Item
5.
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Other
Information
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II-1
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Item
6.
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Exhibits
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II-2
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Signature
Page
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II-3
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September
30,
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December
31,
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||||
ASSETS
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2008
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2007
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|||
(Unaudited)
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|||||||
CURRENT
ASSETS:
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|||||||
Cash
and cash equivalents
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$
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410,107
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$
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832,925
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|||
Royalty
receivable
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14,022
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100,431
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|||||
Prepaid
expenses and other
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131,041
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62,877
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|||||
Total
current assets
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555,170
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996,233
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|||||
OTHER
ASSETS:
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|||||||
Office
equipment
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6,633
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-
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|||||
Patent
costs
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49,607
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42,918
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|||||
Prepaid
insurance - director and officer
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30,419
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60,838
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|||||
86,659
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103,756
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||||||
TOTAL
ASSETS
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$
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641,829
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$
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1,099,989
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|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
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|||||||
CURRENT
LIABILITIES:
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|||||||
Accounts
payable
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$
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24,947
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$
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13,407
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|||
Accrued
expenses
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52,903
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57,767
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|||||
Discontinued
operations
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130,000
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130,000
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|||||
Total
current liabilities
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207,850
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201,174
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COMMITMENTS
AND CONTINGENCIES
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|||||||
SHAREHOLDERS’
EQUITY:
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|||||||
Common
stock, $.01 par value; 15,000,000 shares
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|||||||
authorized;
4,290,026 and 4,176,048 shares
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|||||||
issued
and outstanding at September 30, 2008
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|||||||
and
December 31, 2007, respectively
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42,900
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41,760
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Additional
contributed capital
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12,652,219
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12,198,278
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Accumulated
deficit
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(12,261,140
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)
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(11,341,223
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)
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433,979
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898,815
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||||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
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$
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641,829
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$
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1,099,989
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Three
Months Ended
September
30,
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Nine
Months Ended
September
30,
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||||||||||||
2008
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2007
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2008
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2007
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REVENUE
- ROYALTY AND LICENSING FEES
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$
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14,022
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$
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-
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$
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40,125
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$
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-
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OPERATING
EXPENSES
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599,869
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469,283
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974,197
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770,043
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Loss
from operations
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(585,847
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)
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(469,283
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)
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(934,072
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)
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(770,043
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)
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Interest
income
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3,008
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12,288
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14,155
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40,631
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NET
LOSS
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$
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(582,839
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)
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$
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(456,995
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)
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$
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(919,917
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)
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$
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(729,412
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)
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WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING:
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|||||||||||||
Basic
and diluted
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4,290,026
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4,175,371
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4,269,227
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4,162,245
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LOSS
PER COMMON SHARE:
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Basic
and diluted
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$
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(0.14
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)
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$
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(
0.11
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)
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$
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(0.22
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)
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$
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(0.18
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)
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Nine
Months Ended September 30,
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|||||||
2008
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2007
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Cash
flows from operating activities:
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Net
loss
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$
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(919,917
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)
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$
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(729,412
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)
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Adjustments
to reconcile net loss to net cash used in operating
activities:
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|||||||
Compensation
expense related to stock options
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455,080
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332,925
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Amortization
of patent costs
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16,591
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17,210
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Changes
in operating assets and liabilities:
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|||||||
Royalty
receivable
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86,409
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-
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Prepaid
expenses and other
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(37,745
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)
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26,617
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Accounts
payable
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11,540
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14,677
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Accrued
expenses
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(4,863
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)
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(18,491
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)
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Net
cash used in operating activities
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(392,905
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)
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(356,474
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)
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Cash
flows from financing activities:
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Proceeds
from the exercise of stock options
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-
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18,087
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Net
cash provided by financing activities
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-
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18,087
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Cash
flows from investing activities:
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Purchase
of office equipment
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(6,633
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Investment
in patents
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(23,280
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)
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-
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Net
cash used in investing activities
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(29,913
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-
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Net
decrease in cash and cash equivalents
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(422,818
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)
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(338,387
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Cash
and cash equivalents - beginning of period
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832,925
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1,281,785
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Cash
and cash equivalents - end of period
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$
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410,107
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$
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943,398
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None.
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Exhibit
No.
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Description
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3.01
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Articles
of Incorporation of LecTec Corporation, as amended (Incorporated
herein by
reference to the Company’s Form S-1 Registration Statement (file number
33-9774C) filed on October 31, 1986 and amended on December 12,
1986).
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3.02
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Bylaws
of LecTec Corporation (Incorporated herein by reference to the Company’s
Form S-1 Registration Statement (file number 33-9774C) filed on October
31, 1986 and amended on December 12, 1986).
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31.01
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Certification
of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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31.02
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Certification
of Principle Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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32.01
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Certification
Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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99.01
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Cautionary
Statements (Incorporated herein by reference to Exhibit 99.01 to
the
Company’s Report on Form 10-QSB for the quarter ended March 31,
2008).
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LECTEC CORPORATION | |||
Date:
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November
19, 2008
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By
/s/ Judd A. Berlin
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Judd
A. Berlin
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Chief
Executive Officer, Chief Financial Officer, &
Director
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(principal
financial officer and duly authorized officer)
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Exhibit
No.
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Description
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3.01
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Articles
of Incorporation of LecTec Corporation, as amended (Incorporated
herein by
reference to the Company’s Form S-1 Registration Statement (file number
33-9774C) filed on October 31, 1986 and amended on December 12,
1986).
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3.02
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Bylaws
of LecTec Corporation (Incorporated herein by reference to the Company’s
Form S-1 Registration Statement (file number 33-9774C) filed on October
31, 1986 and amended on December 12, 1986).
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31.01
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Certification
of Principal Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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31.02
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Certification
of Principle Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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32.01
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Certification
Pursuant to 18 U.S.C. §1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith.
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99.01
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Cautionary
Statements (Incorporated herein by reference to Exhibit 99.01 to
the
Company’s Report on Form 10-QSB for the quarter ended March 31,
2008).
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