----

----

| x      | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     |
|--------|------------------------------------------------------------------------------------------|
|   | For the fiscal year ended December 31, 2009                                              |
|   |                                                                                     |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   | For the transition period from _______________________to _________________________       |

| Delaware                       | 22-3367588          |
|--------------------------------|---------------------|
| (State or jurisdiction of      | (I.R.S. Employer    |
| incorporation or organization) | Identification No.) |

----

| Large accelerated filer  ̈                                                              | Accelerated filer  ̈         |
|---------------------------------------------------------------------------------------------|----------------------------------|
| Non-accelerated filer    ̈ (Do not check if a smaller reporting company) | Smaller reporting company ý |

----

| Note Concerning Forward Looking Information | 4                                                                                                                        |
|---------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                     |   |
| PART I                                      |                                                                                                                     |
|                                        |                                                                                                                     |   |
| ITEM 1                                      | BUSINESS                                                                                                                 | 5 |
| ITEM 1A                                     | RISK FACTORS                                                                                                             | 11 |
| ITEM 1B                                     | UNRESOLVED STAFF COMMENTS                                                                                                | 11 |
| ITEM 2                                      | PROPERTIES                                                                                                               | 11 |
| ITEM 3                                      | LEGAL PROCEEDINGS                                                                                                        | 11 |
| ITEM 4                                      | REMOVED AND RESERVED                                                                                                     | 11 |
|                                        |                                                                                                                     |   |
| PART II                                     |                                                                                                                     |
|                                        |                                                                                                                     |   |
| ITEM 5                                      | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND  ISSUER PURCHASES OF EQUITY SECURITIES | 11 |
| ITEM 6                                      | SELECTED FINANCIAL DATA                                                                                                  | 12 |
| ITEM 7                                      | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                    | 12 |
| ITEM 7A                                     | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS                                                              | 16 |
| ITEM 8                                      | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                              | 16 |
| ITEM 9                                      | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                     | 16 |
| ITEM 9A(T)                                  | CONTROLS AND PROCEDURES                                                                                                  | 16 |
| ITEM 9B                                     | OTHER INFORMATION                                                                                                        | 19 |
|                                        |                                                                                                                     |   |
| PART III                                    |                                                                                                                     |
|                                        |                                                                                                                     |   |
| ITEM 10                                     | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                                   | 19 |
| ITEM 11                                     | EXECUTIVE COMPENSATION                                                                                                   | 22 |
| ITEM 12                                     | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                           | 26 |
| ITEM 13                                     | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE                                                 | 28 |
| ITEM 14                                     | PRINCIPAL ACOUNTING FEES AND SERVICES                                                                                    | 29 |
|                                        |                                                                                                                     |   |
| PART IV                                     |                                                                                                                     |
|                                        |                                                                                                                     |   |
| ITEM 15.                                    | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                                  | 30 |

----

|   | ● | The development of new products and the expansion of the market for our current products;             |
|--------|---------|-------------------------------------------------------------------------------------------------------|
|   | ● | Implementing aspects of our business plans;                                                           |
|   | ● | Financing goals and plans;                                                                            |
|   | ● | Our existing cash and whether and how long these funds will be sufficient to fund our operations; and |
|   | ● | Our raising of additional capital through future equity financings.                                   |

----

| ● | ENDUROX R4® Recovery Drink – Introduced in February 1999                                         |
|---------|-------------------------------------------------------------------------------------------------------------|
|    |                                                                                                        |
| ● | ACCELERADETM Sports Drink – Introduced in May 2001                                                    |
|    |                                                                                                        |
| ● | ACCELERADETM HYDROTM Sports Drink with 30% less calories and 55% less sugar – Introduced in June 2008 |

----

| ● | ACCEL GEL® – Introduced in February 2004                                                       |
|---------|-----------------------------------------------------------------------------------------------------------|
|    |                                                                                                      |
| ● | ENDUROX RESTORETM Recovery Drink for exercise lasting less than one hour – Introduced in April 2008 |
|    |                                                                                                      |
| ● | ENDUROX® EXCEL® – Introduced in March 1997                                                |
|    |                                                                                                      |
| ● | ENDUROX EXCEL Natural Workout Supplement to build endurance – Introduced in June 2008               |
|    |                                                                                                      |
| ● | ENDUROX EXCEL Electrolyte Replenisher to promote rehydration – Introduced in June 2008              |
|    |                                                                                                      |
| ● | ENDUROX EXCEL Antioxidant Regenerator to prevent muscle fatigue – Introduced in June 2008           |

----

----

----

----

----

| ITEM 1A. | RISK FACTORS |
|----------|--------------|

| ITEM 1B. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

| ITEM 2. | PROPERTIES |
|---------|------------|

| ITEM 3. | LEGAL PROCEEDINGS |
|---------|-------------------|

| ITEM 4. | REMOVED AND RESERVED |
|---------|----------------------|

| ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES. |
|---------|------------------------------------------------------------------------------------------------------------------|

| Year ended December 31, 2009 |   | High   |   |   | Low    |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
|                         |   |   |   |   |   |   |
| First Quarter                |   | $      | 0.23   |   |   | $      | 0.11 |   |
| Second Quarter               |   | $      | 0.44   |   |   | $      | 0.13 |   |
| Third Quarter                |   | $      | 0.41   |   |   | $      | 0.22 |   |
| Fourth Quarter               |   | $      | 0.28   |   |   | $      | 0.11 |   |

----

| Year ended December 31, 2008 |   | High   |   |   | Low    |   |
|------------------------------|--------|--------|--------|--------|--------|--------|
|                         |   |   |   |   |   |   |
| First Quarter                |   | $      | 0.68   |   |   | $      | 0.40 |   |
| Second Quarter               |   | $      | 0.53   |   |   | $      | 0.28 |   |
| Third Quarter                |   | $      | 0.30   |   |   | $      | 0.22 |   |
| Fourth Quarter               |   | $      | 0.30   |   |   | $      | 0.12 |   |

| 5(d) | Recent Sales of Unregistered Securities |
|------|-----------------------------------------|

| ITEM 6. | SELECTED FINANCIAL DATA |
|---------|-------------------------|

| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|---------|---------------------------------------------------------------------------------------|

----

----

| Accelerated vesting of stock options previously issued to the former CEO           |   | $      | 138,434 |   |
|------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Accrued severance and benefits to former employees whose positions were eliminated |   |   | 149,262 |   |
| Write-off of raw materials and packaging inventory primarily related to SATIATRIM  |   |   | 184,373 |   |
|                                                                               |   | $      | 472,069 |   |

----

----

| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------|

| ITEM 8. | FINANCIAL STATEMENTS |
|---------|----------------------|

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A(T) | CONTROLS AND PROCEDURES |
|------------|-------------------------|

----

----

|   | (i)    | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;                                                                                                                                                                                                      |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                  |
|   | (ii)   | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
|   |   |                                                                                                                                                                                                                                                                                                                                                  |
|   | (iii)  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.                                                                                                                                                    |

----

| ITEM 9B | OTHER INFORMATION |
|---------|-------------------|

| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
|----------|--------------------------------------------------------|

| Name                  | Position                                          |
|-----------------------|---------------------------------------------------|
|                  |                                              |
| Frederick Duffner 1   | President and Director                            |
| Stephen P. Kuchen     | Chief Financial Officer, Treasurer, and Secretary |
| Robert Portman, Ph.D. | Director                                          |
| David Portman         | Director                                          |
| Michael Cahr          | Director 2,3,4                                    |
| Adam Mizel            | Director 2,3                                      |
| Marc Particelli       | Director 3,4                                      |

----

----

----

| ITEM 11. | EXECUTIVE COMPENSATION |
|----------|------------------------|

| Name and Principal Position | Year   |   | Salary($) |    |   | Bonus($) |   |   | StockAwards($) |   |   | Option Awards($) |   |    | Non-Equity IncentivePlanCompen-sation($) |   |   | NonqualifiedDeferredCompensa-tion Earnings($) |   |   | All Other Compensa-tion ($) |   |   | Total ($) |   |
|-----------------------------|--------|--------|-----------|---------|--------|----------|--------|--------|----------------|--------|--------|------------------|--------|---------|------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-----------------------------|--------|--------|-----------|--------|
| (a)                         | (b)    |   | (c)       |    |   | (d)      |   |   | (e)            |   |   | (f) (2)          |   |    | (g)                                      |   |   | (h)                                           |   |   | (i)                         |   |   | (j)       |   |
| Jason Ash,                  | 2009   |   | $         | 295,000 | (1)    |     | ---    |   |           | ---    |   |             | $      | 84,725  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 40,000    | (1)    |   | $ | 419,725 |   |
| President, Chief            |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Executive Officer           | 2008   |   | $         | 295,000 | (1)    |     | ---    |   |           | ---    |   |             | $      | 79,352  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 55,000    | (1)    |   | $ | 429,352 |   |
| and a Director              |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
|                        |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Robert Portman,             | 2009   |   |      | ---     |   |     | ---    |   |           | ---    |   |             |   | ---     |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 172,081   | (4)    |   | $ | 172,081 |   |
| Chairman of the             |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Board, Chief                | 2008   |   | $         | 172,083 | (3)    |     | ---    |   |           | ---    |   |             | $      | 216,883 | (3)                                      |   | ---    |                                          |   | ---    |                        |   | $      | 129,740   | (4)    |   | $ | 518,706 |   |
| Executive Officer,          |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| President and Chief         |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Scientific Officer          |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
|                        |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Stephen P. Kuchen,          | 2009   |   | $         | 158,100 |   |     | ---    |   |           | ---    |   |             | $      | 17,152  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 175,252 |   |
| Chief Financial             |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Officer, Treasurer,         | 2008   |   | $         | 154,500 |   |     | ---    |   |           | ---    |   |             | $      | 32,439  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 186,939 |   |
| and Secretary               |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
|                        |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Frederick Duffner,          | 2009   |   | $         | 208,000 | (6)    |     | ---    |   |           | ---    |   |             | $      | 10,552  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 218,552 |   |
| Senior Vice                 |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| President, Sales            | 2008   |   | $         | 78,452  | (7)    |     | ---    |   |           | ---    |   |             | $      | 4,836   |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 83,288 |   |
|                        |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Matt Spolar, Vice           | 2009   |   | $         | 197,800 | (8)    |     | ---    |   |           | ---    |   |             | $      | 28,468  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 226,268 |   |
| President, Product          |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
| Development and             | 2008   |   | $         | 190,000 |   |     | ---    |   |           | ---    |   |             | $      | 28,468  |                                     |   | ---    |                                          |   | ---    |                        |   | $      | 0         | (5)    |   | $ | 218,468 |   |
| Supply Chain                |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |
|                        |   |   |      |    |   |     |   |   |           |   |   |             |   |    |                                     |   |   |                                          |   |   |                        |   |   |      |   |   |   |   |   |

----

----

|  Executive Officer | Number of Shares of CommonStock Underlying Options |  Exercise Price |  Grant Date |
|-------------------------|----------------------------------------------------|----------------------|------------------|
| Jason Ash               | 200,000                                            | $0.28                | June 24, 2009    |

----

|                  | Option Awards                                                | Stock Awards                                                    |
|-----------------------|--------------------------------------------------------------|-----------------------------------------------------------------|
| Name                  | NumberofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable | EquityIncentivePlan Awards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions(#) | OptionExercisePrice($) | OptionExpiration Date | Number ofShares orUnits ofStock ThatHave NotVested(#) | MarketValue ofShares orUnits ofStock ThatHave NotVested($) | EquityIncentive PlanAwards:Number ofUnearnedShares, Unitsor Other RightsThat Have NotVested(#) | EquityIncentive PlanAwards:Market orPayout Valueof UnearnedShares, Unitsor Other RightsThat Have NotVested($)   |
| (a)                   | (b)                                                          | (c)                                                             | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
|                  |                                                         |                                                            |   |   |   |   |   |   |   |
| Jason Ash,            | 150,000 (1)                                                  | 450,000 (1)                                                     | --- | $0.65 | 01/03/2013 | --- | --- | --- | --- |
| President, Chief      |                                                         |                                                            |   |   |   |   |   |   |   |
| Executive Officer and | (2)                                                          | 200,000 (2)                                                     | --- | $0.28 | 06/24/2014 | --- | --- | --- | --- |
| a Director            |                                                         |                                                            |   |   |   |   |   |   |   |
|                  |                                                         |                                                            |   |   |   |   |   |   |   |
|                  |                                                         |                                                            |   |   |   |   |   |   |   |
| Stephen P. Kuchen,    |   12,500 (3)                                       |   37,500 (3)                                               | --- | $0.23 | 09/17/2013 | --- | --- | --- | --- |
| Chief Financial       |                                                         |                                                            |   |   |   |   |   |   |   |
| Officer, Treasurer,   |   50,000 (4)                                            | ---                                                             | --- | $1.13 | 12/13/2011 | --- | --- | --- | --- |
| and Secretary         |                                                         |                                                            |   |   |   |   |   |   |   |
|                  | 100,000 (5)                                                  | ---                                                             | --- | $0.60 | 02/10/2011 | --- | --- | --- | --- |
|                  |                                                         |                                                            |   |   |   |   |   |   |   |

----

| Name             | Fees EarnedorPaid inCash($) | StockAwards($) | OptionAwards($) | Non-EquityIncentive PlanCompensation($) | NonqualifiedDeferredCompensationEarnings($)    | All OtherCompensation($) | Total($) |
|------------------|-----------------------------|----------------|-----------------|-----------------------------------------|---------------------------------------------------------------|--------------------------|----------|
| (a)              | (b)                         | (c)            | (d)             | (e)                                     | (f)                                                           | (g)                      | (h)      |
|             |                        |           |            |                                    |                                                          |                     |     |
| David I. Portman | __                          | $12,000        | __              | __                                      | __                                                            | __                       | $12,000  |
|             |                        |           |            |                                    |                                                          |                     |     |
|             |                        |           |            |                                    |                                                          |                     |     |
| Michael Cahr     | __                          | $24,000        | __              | __                                      | __                                                            | __                       | $24,000  |
|             |                        |           |            |                                    |                                                          |                     |     |
|             |                        |           |            |                                    |                                                          |                     |     |
| Adam Mizel       | __                          | $24,000        | __              | __                                      | __                                                            | __                       | $24,000  |
|             |                        |           |            |                                    |                                                          |                     |     |
|             |                        |           |            |                                    |                                                          |                     |     |
| Marc Particelli  | __                          | $24,000        | __              | __                                      | __                                                            | __                       | $24,000  |
|             |                        |           |            |                                    |                                                          |                     |     |
|             |                        |           |            |                                    |                                                          |                     |     |
| Robert Portman   | __                          | $18,000        | __              | __                                      | __                                                            | __                       | $18,000  |
|             |                        |           |            |                                    |                                                          |                     |     |

| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
|----------|------------------------------------------------------------------------------------------------|

----

| Name and Address (1)                                                                  | Common Stock (2)Amount Beneficially Owned | Common Stock (2)Percentage of Class |
|---------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------|
|                                                                                  |                                      |                                |
| Frederick Duffner (3)President and a Director                                         | 712,857                                   | 4.5%                                |
|                                                                                  |                                      |                                |
| Stephen P. Kuchen (4)Vice President, Chief Financial Officer, Secretary and Treasurer | 188,196                                   | 1.2%                                |
|                                                                                  |                                      |                                |
| Robert Portman (5)Chairman of the Board and a Director                                | 2,797,788                                 | 17.2%                               |
|                                                                                  |                                      |                                |
| David I. Portman (6)Secretary and a Director                                          | 651,980                                   | 4.1%                                |
|                                                                                  |                                      |                                |
| Michael Cahr (7)Director                                                              | 510,494                                   | 3.2%                                |
|                                                                                  |                                      |                                |
| Adam Mizel (8)Director                                                                | 720,774                                   | 4.6%                                |
|                                                                                  |                                      |                                |
| Marc Particelli (9)Director                                                           | 342,048                                   | 2.2%                                |
|                                                                                  |                                      |                                |
| Executive Officers and Directors as a group (7 persons)                               | 5,924,137                                 | 35.4%                               |
|                                                                                  |                                      |                                |
| Jason Ash (10)Former President, Chief Executive Officer and a Director                | 972,857                                   | 6.1%                                |

| (1)    | Except as otherwise indicated, the address of each person named in the above table is c/o PacificHealth Laboratories, Inc., 100 Matawan Road, Suite 420, Matawan,   NJ 07747.                                                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (2)    | Common Stock includes shares issuable upon the exercise of a stock option which is presently exercisable or which becomes exercisable within sixty days is considered outstanding for the purpose of computing the percentage ownership (x) of persons holding such options, and (y) of officers and directors as a group with respect to all options held by officers and directors.                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)    | Includes 50,000 shares issuable upon the exercise of options not under any Incentive Stock plan (“NON-ISO”).                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (4)    | Includes 150,000 shares issuable upon the exercise of options granted under our 1995 Plan and 12,500 shares issuable upon the exercise of options granted not covered under any Plan (“NON-ISO”).                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (5)    | Includes 575,000 shares issuable upon the exercise of options not under any Incentive Stock plan (“NON-ISO”). Does not include 200,000 shares of Common Stock owned by Jennifer Portman, Dr. Portman's wife, individually and as Trustee for his and her children, as to which Dr. Portman disclaims beneficial ownership.                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (6)    | Includes 70,000 shares issuable upon the exercise of options granted under our 1995 Plan and 20,000 shares issuable upon the exercise of options granted under our 2000 Plan.                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (7)    | Includes 40,000 shares issuable upon the exercise of options granted under our 1995 Plan and 20,000 shares issuable upon the exercise of options granted under our 2000 Plan.                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (8)    | Includes 447,780 shares that are owned by Aquifer Opportunity Fund, L.P., of which Mr. Mizel is the managing principal of the general partner and 40,000 shares issuable upon the exercise of options granted under our 2000 Plan.  Mr. Mizel disclaims beneficial ownership of the shares owned by Aquifer Opportunity Fund, L.P. except to the extent of his pecuniary interest therein. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (9)    | Includes 40,000 shares issuable upon the exercise of options granted under our 2000 Plan.                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                 |
| (10)   | Includes 325,000 shares issuable upon the exercise of options not under any Incentive Stock plan (“NON-ISO”).                                                                                                                                                                                                                                                                            |

----

| Plan Category                                              | Number of securities to beissued upon exercise ofoutstanding options,warrants and rights | Weighted-average exerciseprice of outstandingoptions, warrants and rights | Number of securitiesremaining available forfuture issuance underequity compensation plans(excluding securitiesreflected in column (a)) |
|------------------------------------------------------------|------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
|                                                       | (a)                                                                                      | (b)                                                                       | (c)                                                                                                                                    |
| Equity compensation plans approved by security holders     | 437,750                                                                                  | $0.95                                                                     | 1,500,000                                                                                                                              |
| Equity compensation plans not approved by security holders | 2,025,000                                                                                | $0.57                                                                     | N/A                                                                                                                                    |
| Total                                                      | 2,462,750                                                                                | $0.64                                                                     | 1,500,000                                                                                                                              |

| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |
|----------|--------------------------------------------------------------------------|

----

|   | (a)    | On October 23, 2008, our Board of Directors approved the sale of an aggregate of 500,000 shares of our common stock to Jason Ash, our Chief Executive Officer and other members of our management team for an aggregate purchase price of $150,000. The Board, including all independent directors, determined the purchase price of $0.30 per share represented fair market value. On the date the stock was purchased, the closing price was $0.27 per share.                                            |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (b)    | On June 24, 2009, our Board of Directors approved the sale of an aggregate of 535,714 shares of our common stock to Jason Ash, our then Chief Executive Officer and Frederick Duffner, current President and then Senior Vice President of Sales, for an aggregate purchase price of $150,000. The Board, including all independent directors, determined the purchase price of $0.28 per share represented fair market value. On the date the stock was purchased, the closing price was $0.28 per share. |

| Fee Category        |   | Fiscal 2009 |    |   | Fiscal 2008 |   |
|---------------------|--------|-------------|---------|--------|-------------|--------|
| Audit Fees1    |   | $           | 120,500 |   |        | $      | 95,875 |   |
| Audit-Related Fees2 |   | $           | 16,200  |   |        | $      | - 0 - |   |
| Tax Fees3           |   | $           | 1,450   |   |        | $      | 3,300 |   |
| All Other Fees4     |   | $           | - 0 -   |   |        | $      | - 0 - |   |
| TOTAL               |   | $           | 138,150 |   |        | $      | 99,175 |   |

----

| ITEM 15. | EXHIBITS |
|----------|----------|

----

| By:    | /s/Frederick Duffner         |   |
|--------|------------------------------|--------|
|   | Frederick Duffner, President |   |

| /s/Frederick Duffner |   | Director and President             | March 29, 2010 |
|----------------------|--------|------------------------------------|----------------|
| Frederick Duffner    |   | (Principal Executive Officer)      |           |
|                 |   |                               |           |
| /s/Stephen P. Kuchen |   | Chief Financial Officer (Principal | March 29, 2010 |
| Stephen P. Kuchen    |   | Financial and Accounting Officer)  |           |
| and Secretary        |   |                               |           |
|                 |   |                               |           |
| /s/Robert Portman    |   | Chairman of the Board and Director | March 29, 2010 |
| Robert Portman       |   |                               |           |
|                 |   |                               |           |
| /s/David I. Portman  |   | Director                           | March 29, 2010 |
| David I. Portman     |   |                               |           |
|                 |   |                               |           |
| /s/Michael Cahr      |   | Director                           | March 29, 2010 |
| Michael Cahr         |   |                               |           |
|                 |   |                               |           |
| /s/ Adam Mizel       |   | Director                           | March 29, 2010 |
| Adam Mizel           |   |                               |           |
|                 |   |                               |           |
| s/ Marc Particelli   |   | Director                           | March 29, 2010 |
| Marc Particelli      |   |                               |           |

----

|         |   |                                                                                                                                                                                                            |   | Incorporated |
|--------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|
| Exhibit No.  |   | Description                                                                                                                                                                                                     |   | by Reference |
| 3.1          | --     | Certificate of Incorporation of PacificHealth Laboratories, Inc. and all amendments thereto                                                                                                                     |   | A            |
|         |   |                                                                                                                                                                                                            |   |         |
| 3.2          | --     | Amended and Restated Bylaws of PacificHealth Laboratories, Inc.                                                                                                                                                 |   | C            |
|         |   |                                                                                                                                                                                                            |   |         |
| 3.3          | --     | Certificate of Amendment of Certificate of Incorporation of PacificHealth Laboratories, Inc.                                                                                                                    |   | H            |
|         |   |                                                                                                                                                                                                            |   |         |
| 3.4          |   | Certificate of Designations For Series A Preferred Stock                                                                                                                                                        |   | I            |
|         |   |                                                                                                                                                                                                            |   |         |
| 4.1          | --     | Specimen Common Stock Certificate                                                                                                                                                                               |   | C            |
|         |   |                                                                                                                                                                                                            |   |         |
| 4.2          | --     | Stock Purchase Agreement dated June 1, 2001 between Pacific Health Laboratories, Inc. and Glaxo Wellcome International B.V                                                                                 |   | E            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.1†  | --     | Incentive Stock Option Plan of 1995                                                                                                                                                                             |   | A            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.2         | --     | Strategic Alliance Agreement between the Company and the Institute of Nutrition and Food Hygiene                                                                                                                |   | A            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.3         | --     | Exclusive Licensing Agreement between the Company and the INFH                                                                                                                                                  |   | A            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.4         | --     | Shareholders Agreement                                                                                                                                                                                          |   | A            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.5†  | --     | 2000 Incentive Stock Option Plan                                                                                                                                                                                |   | D            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.6†  |   | Employment Extension Agreement between PacificHealth                                                                                                                                                            |   | J            |
|         |   | Laboratories, Inc. and Robert Portman effective September 1, 2004, executed February 28, 2006                                                                                                                   |   |         |
| 10.8         |   | Asset Purchase Agreement dated February 22, 2006 between PacificHealth Laboratories, Inc. and Mott’s LLP (redacted, subject to request for confidential treatment)                                        |   | L            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.9         |   | License Agreement dated February 22, 2006 between PacificHealth Laboratories, Inc. and Mott’s LLP (redacted, subject to request for confidential treatment)                                               |   | L            |
|         |   |                                                                                                                                                                                                            |   |         |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.10        |   | Consulting, License and Noncompetition Agreement dated February 22, 2006 among PacificHealth Laboratories, Inc., Mott’s LLP, and Robert Portman (redacted, subject to request for confidential treatment) |   | L            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.11† |   | Option Certificate for grant to Robert Portman                                                                                                                                                                  |   | M            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.12† |   | Option Certificate for grant to Stephen Kuchen under the PacificHealth Laboratories, Inc. 1995 Incentive Stock Option Plan.                                                                                     |   | M            |
|         |   |                                                                                                                                                                                                            |   |         |
| 10.13        |   | Form of Stock Purchase Agreement entered into among the Company, Aquifer Opportunity Fund, L.P. and Marc C. Particelli.                                                                                         |   | N            |

----

| 10.14† |   | Form of Grant Instrument under PacificHealth Laboratories, Inc. 2000 Incentive Stock Option Plan for Adam M. Mizel.                                      |   | N      |
|--------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|         |   |                                                                                                                                                     |   |   |
| 10.15        |   | Form of Grant Instrument under PacificHealth Laboratories, Inc. 2000 Incentive Stock Option Plan for Marc C. Particelli                                  |   | N      |
|         |   |                                                                                                                                                     |   |   |
| 10.16† |   | Employment Agreement, effective January 3, 2008, by and between PacificHealth Laboratories, Inc. and Jason Ash                                           |   | O      |
|         |   |                                                                                                                                                     |   |   |
| 10.17        |   | Business Loan Agreement, dated April 21, 2008, by and between PacificHealth Laboratories, Inc. and Grand Bank, N.A.                                      |   | P      |
|         |   |                                                                                                                                                     |   |   |
| 10.18        |   | Promissory Note, in the original principal amount of $675,000, issued on April 21, 2008 by PacificHealth Laboratories, Inc. in favor of Grand Bank, N.A. |   | P      |
|         |   |                                                                                                                                                     |   |   |
| 10.19        |   | Commercial Pledge Agreement, dated April 21, 2008, by and between PacificHealth Laboratories, Inc. and Grand Bank, N.A.                                  |   | P      |
|         |   |                                                                                                                                                     |   |   |
| 10.20        |   | Subordination Agreement, dated April 21, 2008, by and among PacificHealth Laboratories, Inc., Robert Portman, Stephen Kuchen and Grand Bank, N.A.        |   | P      |
|         |   |                                                                                                                                                     |   |   |
| 10.21        |   | Separation and Release Agreement, effective August 1, 2008, by and between PacificHealth Laboratories, Inc. and Robert Portman                           |   | Q      |
|         |   |                                                                                                                                                     |   |   |
| 10.22† |   | Amendment No. 1 to Employment Agreement, by And between PacificHealth Laboratories, Inc. and Jason Ash, effective August 1, 2008                         |   | Q      |
|         |   |                                                                                                                                                     |   |   |
| 10.23† |   | Amendment No. 2 to Employment Agreement, by And between PacificHealth Laboratories, Inc. and Jason Ash, effective June 24, 2009                          |   | R      |
|         |   |                                                                                                                                                     |   |   |
| 10.24        |   | Separation and Release Agreement, effective January 27, 2010, by and between PacificHealth Laboratories, Inc. and Jason Ash                              |   | S      |
|         |   |                                                                                                                                                     |   |   |
| 10.25† |   | Summary of Compensation for Executive Officers of PacificHealth Laboratories, Inc.                                                                       |   | *      |
|         |   |                                                                                                                                                     |   |   |
| 23.1         | --     | Consent of Weiser LLP                                                                                                                                    |   | *      |
|         |   |                                                                                                                                                     |   |   |
| 31.1         | --     | Rule 13a-14(a) Certification of Chief Executive Officer.                                                                                                 |   | *      |
|         |   |                                                                                                                                                     |   |   |
| 31.2         | --     | Rule 13a-14(a) Certification of Chief Financial Officer.                                                                                                 |   | *      |
|         |   |                                                                                                                                                     |   |   |
| 32           | --     | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                         |   | *      |

----

| *       | Filed herewith                                                                                                                   |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| † | Management contract or management compensatory plan or arrangement.                                                              |
|    |                                                                                                                             |
| A       | Filed with Registration Statement on Form SB-2 (Registration No. 333-36379) (the “1997 SB-2”) on September 25, 1997. |
|    |                                                                                                                             |
| B       | Filed with Amendment No. 1 to the 1997 SB-2 on October 23, 1997.                                                                 |
|    |                                                                                                                             |
| C       | Filed with Amendment No. 3 to the 1997 SB-2 on December 17, 1997.                                                                |
|    |                                                                                                                             |
| D       | Filed with Definitive Proxy Statement (Schedule 14A) for annual meeting held on August 16, 2000, filed on July 11, 2000.         |
|    |                                                                                                                             |
| E       | Filed with Current Report on Form 8-K dated June 1, 2001, filed on June 14, 2001.                                      |
|    |                                                                                                                             |
| F       | Filed with Annual Report on Form 10-KSB for the year ended December 31, 2001.                                                    |
|    |                                                                                                                             |
| G       | Filed with Amendment to Current Report on Form 8-K dated June 1, 2001, filed July 5, 2001.                             |
|    |                                                                                                                             |
| H       | Filed with Annual Report on Form 10-KSB for the year ended December 31, 2002.                                                    |
|    |                                                                                                                             |
| I       | Filed as Exhibit 3.1 to Current Report on Form 8-K, dated January 24, 2005, filed on January 28, 2005.                           |
|    |                                                                                                                             |
| J       | Filed as Exhibit 10.1 to Current Report on Form 8-K, dated and filed on September 9, 2004.                                       |
|    |                                                                                                                             |
| K       | Filed with Annual Report on Form 10-KSB for the year ended December 31, 2004.                                                    |
|    |                                                                                                                             |
| L       | Filed with Annual Report on Form 10-KSB for the year ended December 31, 2005.                                                    |
|    |                                                                                                                             |
| M       | Filed as Exhibit to Current Report on Form 8-K, dated December 13, 2006 and filed on December 19, 2006.                          |
|    |                                                                                                                             |
| N       | Filed as Exhibit to Current Report on Form 8-K, dated February 22, 2007 and filed February 27, 2007.                             |
|    |                                                                                                                             |
| O       | Filed as Exhibit to Current Report on Form 8-K, dated November 28, 2007 and filed December 3, 2007.                              |
|    |                                                                                                                             |
| P       | Filed as Exhibit to the Annual report on Form 8-K dated April 29, 2008 and filed on May 2, 2008.                                 |
|    |                                                                                                                             |
| Q       | Filed as Exhibit to the Annual report on Form 8-K dated August 8, 2008 and filed on August 11, 2008.                             |
|    |                                                                                                                             |
| R       | Filed as Exhibit to Current Report on Form 8-K dated June 24, 2009 and filed July 1, 2009.                                       |
|    |                                                                                                                             |
| S       | Filed as Exhibit to Current Report on Form 8-K, dated January 27, 2010 and filed January 29, 2010.                               |

----

----

|                                                                                         | Page   |
|----------------------------------------------------------------------------------------------|--------|
|                                                                                         |   |
| Financial Statements                                                                         |   |
|                                                                                         |   |
| Report of independent registered public accounting firm                                      | F-1    |
|                                                                                         |   |
| Balance sheets as of December 31, 2009 and 2008                                              | F-2    |
|                                                                                         |   |
| Statements of operations for the years ended December 31, 2009 and 2008                      | F-3    |
|                                                                                         |   |
| Statements of changes in stockholders' equity for the years ended December 31, 2009 and 2008 | F-4    |
|                                                                                         |   |
| Statements of cash flows for the years ended December 31, 2009 and 2008                      | F-5    |
|                                                                                         |   |
| Notes to financial statements                                                                | F-6    |

----

----

|                                                                                                                                      |   | December 31, |        |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                                                                      |   | 2009         |        |   | 2008 |   |
|                                                                                                                                      |   |         |        |   |   |   |
| ASSETS                                                                                                                                    |   |         |        |   |   |   |
| Current assets:                                                                                                                           |   |         |        |   |   |   |
| Cash and cash equivalents                                                                                                                 |   | $            | 281,159     |   |   | $ | 888,993 |   |
| Other short-term investments                                                                                                              |   |         | 175,000     |   |   |   | 300,000 |   |
| Accounts receivable, net of allowances of $34,000 and $24,000, respectively                                                               |   |         | 763,288     |   |   |   | 455,851 |   |
| Inventories (including consigned inventory of approximately $81,000 and                                                                   |   |         |        |   |   |   |   |   |
| $156,000, respectively)                                                                                                                   |   |         | 806,212     |   |   |   | 1,308,316 |   |
| Prepaid expenses                                                                                                                          |   |         | 92,702      |   |   |   | 159,200 |   |
| Tax loss receivable                                                                                                                       |   |         | 303,931     |   |   |   | - |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| Total current assets                                                                                                                      |   |         | 2,422,292   |   |   |   | 3,112,360 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| Property and equipment, net                                                                                                               |   |         | 110,904     |   |   |   | 236,721 |   |
| Deposits                                                                                                                                  |   |         | 10,895      |   |   |   | 22,895 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| TOTAL ASSETS                                                                                                                              |   | $            | 2,544,091   |   |   | $ | 3,371,976 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| LIABILITIES                                                                                                                               |   |         |        |   |   |   |   |   |
| Current liabilities:                                                                                                                      |   |         |        |   |   |   |   |   |
| Notes payable                                                                                                                             |   | $            | 12,182      |   |   | $ | 58,810 |   |
| Accounts payable and accrued expenses                                                                                                     |   |         | 1,042,051   |   |   |   | 555,354 |   |
| Deferred revenue                                                                                                                          |   |         | 306,239     |   |   |   | 347,945 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
|                                                                                                                                      |   |         | 1,360,472   |   |   |   | 962,109 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| Commitments                                                                                                                               |   |         |        |   |   |   |   |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                      |   |         |        |   |   |   |   |   |
| Preferred stock, $0.01 par value; 1,000,000 shares authorized,-0- shares issued and outstanding at December 31, 2009and December 31, 2008 |   |         | -           |   |   |   | - |   |
| Common stock, $0.0025 par value, authorized 50,000,000 shares;                                                                            |   |         |        |   |   |   |   |   |
| issued and outstanding 15,624,017 and 14,194,613 shares, respectively                                                                     |   |         | 39,060      |   |   |   | 35,486 |   |
| Additional paid-in capital                                                                                                                |   |         | 20,031,599  |   |   |   | 19,585,297 |   |
| Accumulated deficit                                                                                                                       |   |         | (18,887,040 | ) |   |   | (17,210,916 | ) |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
|                                                                                                                                      |   |         | 1,183,619   |   |   |   | 2,409,867 |   |
|                                                                                                                                      |   |         |        |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                          |   | $            | 2,544,091   |   |   | $ | 3,371,976 |   |

----

|                                                            |   | Years Ended  |       |
|-----------------------------------------------------------------|--------|--------------|------------|
|                                                            |   | December 31, |       |
|                                                            |   | 2009         |       |   | 2008 |   |
|                                                            |   |         |       |   |   |   |
| Revenue:                                                        |   |         |       |   |   |   |
| Net product sales                                               |   | $            | 7,995,194  |   |   | $ | 7,235,991 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Cost of goods sold:                                             |   |         |       |   |   |   |   |   |
| Product sales                                                   |   |         | 4,282,777  |   |   |   | 4,009,817 |   |
| Write-down of inventories                                       |   |         | 491,172    |   |   |   | 201,697 |   |
|                                                            |   |         |       |   |   |   |   |   |
|                                                            |   |         | 4,773,949  |   |   |   | 4,211,514 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Gross profit                                                    |   |         | 3,221,245  |   |   |   | 3,024,477 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Operating expenses:                                             |   |         |       |   |   |   |   |   |
| Sales and marketing                                             |   |         | 1,880,102  |   |   |   | 898,914 |   |
| General and administrative                                      |   |         | 3,200,680  |   |   |   | 3,542,483 |   |
| Research and development                                        |   |         | -          |   |   |   | 150,767 |   |
| Restructuring expense                                           |   |         | 81,050     |   |   |   | 472,069 |   |
|                                                            |   |         |       |   |   |   |   |   |
|                                                            |   |         | 5,161,832  |   |   |   | 5,064,233 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Loss before other income (expense) and benefit for income taxes |   |         | (1,940,587 | ) |   |   | (2,039,756 | ) |
|                                                            |   |         |       |   |   |   |   |   |
| Other income (expense):                                         |   |         |       |   |   |   |   |   |
| Interest income                                                 |   |         | 3,684      |   |   |   | 45,575 |   |
| Interest expense                                                |   |         | (5,320     | ) |   |   | (1,468 | ) |
| Other income                                                    |   |         | 4,248      |   |   |   | 1,296 |   |
|                                                            |   |         |       |   |   |   |   |   |
|                                                            |   |         | 2,612      |   |   |   | 45,403 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Loss before benefit from income taxes                           |   |         | (1,937,975 | ) |   |   | (1,994,353 | ) |
|                                                            |   |         |       |   |   |   |   |   |
| Benefit from income taxes                                       |   |         | 261,851    |   |   |   | - |   |
|                                                            |   |         |       |   |   |   |   |   |
| Net loss applicable to common stockholders                      |   | $            | (1,676,124 | ) |   | $ | (1,994,353 | ) |
|                                                            |   |         |       |   |   |   |   |   |
| Net loss per common share - basic                               |   | $            | (0.11      | ) |   | $ | (0.15 | ) |
|                                                            |   |         |       |   |   |   |   |   |
| Net loss per common share - diluted                             |   | $            | (0.11      | ) |   | $ | (0.15 | ) |
|                                                            |   |         |       |   |   |   |   |   |
| Weighted average shares outstanding - basic                     |   |         | 14,974,931 |   |   |   | 13,660,019 |   |
|                                                            |   |         |       |   |   |   |   |   |
| Weighted average shares outstanding – diluted             |   |         | 14,974,931 |   |   |   | 13,660,019 |   |

----

|                                       |   |            |   |   |         |   |   | Additional |   |   |        |   |   |    |   |
|--------------------------------------------|--------|-----------------|--------|--------|--------------|--------|--------|------------|--------|--------|-------------|--------|--------|---------|--------|
|                                       |   | Preferred Stock |   |   | Common Stock |   |   | Paid In    |   |   | Accumulated |   |   |    |   |
|                                       |   | Shares          |   |   | Amount       |   |   | Shares     |   |   | Amount      |   |   | Capital |   |   | Deficit |   |   | Total |   |
| Balance, January 1, 2008                   |   |            | -      |   |         | $      | -      |       |   |   | 13,501,426  |   |   | $       | 33,754 |   |   | $ | 18,874,609 |   |   | $ | (15,216,563 | ) |   | $ | 3,691,800 |   |
|                                       |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation                   |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   | 473,520 |   |   |   |   |   |   |   | 473,520 |   |
| Common stock issued                        |   |            |   |   |         |   |   |       |   |   | 500,000     |   |   |    | 1,250  |   |   |   | 148,750 |   |   |   |   |   |   |   | 150,000 |   |
| Common stock granted to directors          |   |            |   |   |         |   |   |       |   |   | 193,187     |   |   |    | 482    |   |   |   | 50,918 |   |   |   |   |   |   |   | 51,400 |   |
| Common stock issuable to directors         |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   | 37,500 |   |   |   |   |   |   |   | 37,500 |   |
| Net loss                                   |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   | (1,994,353 | ) |   |   | (1,994,353 | ) |
|                                       |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                 |   |            | -      |   |         |   | -      |       |   |   | 14,194,613  |   |   |    | 35,486 |   |   |   | 19,585,297 |   |   |   | (17,210,916 | ) |   |   | 2,409,867 |   |
|                                       |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation                   |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   | 171,975 |   |   |   |   |   |   |   | 171,975 |   |
| Common stock issued                        |   |            |   |   |         |   |   |       |   |   | 535,714     |   |   |    | 1,340  |   |   |   | 148,660 |   |   |   |   |   |   |   | 150,000 |   |
| Common stock granted to directors          |   |            |   |   |         |   |   |       |   |   | 801,593     |   |   |    | 2,004  |   |   |   | 99,996 |   |   |   |   |   |   |   | 102,000 |   |
| Common stock granted to certain sales reps |   |            |   |   |         |   |   | 92,097     |   |   |        | 230    |   |    |   | 25,671 |   |   |   |   |   |   |   | 25,900 |   |
| Net loss                                   |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   | (1,676,124 | ) |   |   | (1,676,124 | ) |
|                                       |   |            |   |   |         |   |   |       |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                 |   |            | -      |   |         | $      | -      |       |   |   | 15,624,017  |   |   | $       | 39,060 |   |   | $ | 20,031,599 |   |   | $ | (18,887,040 | ) |   | $ | 1,183,619 |   |

----

|                                                                        |   | Years Ended December 31, |       |
|-----------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                        |   | 2009                     |       |   | 2008 |   |
|                                                                        |   |                     |       |   |   |   |
| Cash flows from operating activities:                                       |   |                     |       |   |   |   |
| Net loss                                                                    |   | $                        | (1,676,124 | ) |   | $ | (1,994,353 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                     |       |   |   |   |   |   |
| Depreciation                                                                |   |                     | 198,089    |   |   |   | 159,997 |   |
| Bad debt expense                                                            |   |                     | 12,000     |   |   |   | 12,000 |   |
| Equity instrument-based expense                                             |   |                     | 299,875    |   |   |   | 423,986 |   |
| Reserve/write-off of inventories                                            |   |                     | 491,172    |   |   |   | 201,697 |   |
| Restructuring expense                                                       |   |                     | 81,050     |   |   |   | 344,143 |   |
| Changes in:                                                                 |   |                     |       |   |   |   |   |   |
| Accounts receivable                                                         |   |                     | (319,437   | ) |   |   | 241,772 |   |
| Inventories                                                                 |   |                     | 10,932     |   |   |   | 316,060 |   |
| Prepaid expenses                                                            |   |                     | 66,499     |   |   |   | (47,528 | ) |
| Tax loss receivable                                                         |   |                     | (303,931   | ) |   |   | - |   |
| Deposits                                                                    |   |                     | 12,000     |   |   |   | (12,000 | ) |
| Accounts payable and accrued expenses                                       |   |                     | 523,474    |   |   |   | 61,543 |   |
| Deferred revenue                                                            |   |                     | (41,706    | ) |   |   | (211,931 | ) |
|                                                                        |   |                     |       |   |   |   |   |   |
| Net cash used in operating activities                                       |   |                     | (646,107   | ) |   |   | (504,614 | ) |
|                                                                        |   |                     |       |   |   |   |   |   |
| Cash flows from investing activities:                                       |   |                     |       |   |   |   |   |   |
| Proceeds from sales of other short-term investments                         |   |                     | 125,000    |   |   |   | 1,200,000 |   |
| Purchase of property and equipment                                          |   |                     | (190,099   | ) |   |   | (211,711 | ) |
|                                                                        |   |                     |       |   |   |   |   |   |
| Net cash (used in) provided by investing activities                         |   |                     | (65,099    | ) |   |   | 988,289 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Cash flows from financing activities:                                       |   |                     |       |   |   |   |   |   |
| Proceeds from common stock issuance                                         |   |                     | 150,000    |   |   |   | 150,000 |   |
| Proceeds of note payable                                                    |   |                     | 59,751     |   |   |   | 101,116 |   |
| Repayment of note payable                                                   |   |                     | (106,379   | ) |   |   | (58,511 | ) |
|                                                                        |   |                     |       |   |   |   |   |   |
| Net cash provided by financing activities                                   |   |                     | 103,372    |   |   |   | 192,605 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents                        |   |                     | (607,834   | ) |   |   | 676,280 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                              |   |                     | 888,993    |   |   |   | 1,712,713 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Reclassification of other short-term investments                            |   |                     | -          |   |   |   | (1,500,000 | ) |
|                                                                        |   |                     |       |   |   |   |   |   |
| Cash and cash equivalents at end of year                                    |   | $                        | 281,159    |   |   | $ | 888,993 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                          |   |                     |       |   |   |   |   |   |
| Cash paid for interest                                                      |   | $                        | 5,320      |   |   | $ | 1,468 |   |
|                                                                        |   |                     |       |   |   |   |   |   |
| Supplemental disclosures of non-cash investing activity:                    |   |                     |       |   |   |   |   |   |
| Settlement of accounts payable in exchange for equipment                    |   | $                        | 36,776     |   |   | $ | - |   |

----

| [1]    | The Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | The Company was incorporated in April 1995 to discover, develop, and commercialize nutritional products. The Company focuses on the development, marketing, and selling of patented premium nutrition tools that enable consumers to enhance their health and improve their performance. The Company’s principal areas of focus are sports performance and recovery, including optimal weight management. The Company utilizes third-party contractors to manufacture all products. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | During the quarter ended September 30, 2008, the Company made the decision to restructure to be better able to sustain its base sports performance business. The Company eliminated a number of positions and chose to exit certain market sectors. As a result of these decisions, the Company recorded a restructuring charge in the amount of $472,069 in the quarter ended September 30, 2008. The components of the restructuring charge are as follows:                             |

| Accelerated vesting of stock options previously issued to the former CEO                |   | $      | 138,434 |   |
|-----------------------------------------------------------------------------------------|--------|--------|---------|--------|
| Accrued severance and benefits to former employees whose positions were eliminated      |   |   | 149,262 |   |
| Write-off of raw materials and packaging inventory primarily related to SATIATRIM® |   |   | 184,373 |   |
|                                                                                    |   | $      | 472,069 |   |

|   | During the fourth quarter of 2008, the Company paid $127,926 towards the $149,262 obligation due to former employees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | During the quarter ended December 31, 2009, the Company made the decision to forego marketing its FORZE GPSTM weight management product line as the Company was unable to generate enough sales in 2009 to make this product line viable in the foreseeable future. As a result of this decision, the Company recorded a restructuring charge in the amount of $81,050 in the fourth quarter of 2009 consisting of writing- off property and equipment specific to the marketing efforts of FORZE GPS less any realizable salvage values. The Company also recorded a $491,172 reserve for inventory associated with this decision as the value of this inventory may never be realized.                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| [2]    | Cash and cash equivalents:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| [3]    | Accounts receivable:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Accounts receivable consist of trade receivables recorded at original invoice amount, less an estimated allowance for uncollectible accounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest. Trade receivables are periodically evaluated for collectibility by considering a number of factors including the length of time an invoice is past due, the customers' credit worthiness and historical bad debt experience. Changes in the estimated collectibility of trade receivables are recorded in the results of operations for the period in which the estimate is revised. Trade receivables that are deemed uncollectible are offset against the allowance for uncollectible accounts. The Company generally does not require collateral for trade receivables. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| [4]    | Inventories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Inventories are recorded at the lower of cost or market using the first-in, first-out ("FIFO") method. The Company determines its reserve for obsolete inventory by considering a number of factors, including product shelf life, marketability, and obsolescence. The Company determines the need to write down inventories by analyzing product expiration, market conditions, and salability of its products.                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| [5]    | Property and equipment:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Property and equipment are stated at cost and is depreciated using the straight-line method over their estimated useful lives ranging from 2 to 5 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| [6]    | Loss per share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Basic loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the year. The dilutive effect of the outstanding stock warrants and options is computed using the treasury stock method.  For the year ended December 31, 2009, diluted loss per share did not include the effect of 2,462,750 options outstanding and 402,500 warrants outstanding, respectively, as their effect would be anti-dilutive. For the year ended December 31, 2008, diluted loss per share did not include the effect of 2,942,250 options outstanding and 27,500 warrants outstanding, respectively, as their effect would be anti-dilutive.                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| [7]    | Revenue recognition:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Sales are recognized when all of the following criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed and determinable; and, (4) collectibility is reasonably assured. Sales are recorded net of incentives paid and discounts offered to customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The Company has a purchasing agreement with a significant customer for certain products that are sold on a “pay on scan” basis. The Company recognizes revenue for these products when its major customer sells through these products to the consumer. As of December 31, 2009 and 2008, shipments to this customer amounting to $306,239 and $347,945, respectively, have been reflected as deferred revenue in the Company’s balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| [8]    | Research and development:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Costs of research and development activities are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| [9]    | Advertising costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Advertising costs are expensed as incurred.  During 2009 and 2008, the Company recorded advertising expense of $309,130 and $326,286, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| [10]   | Stock-based compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The Company accounts for equity instrument issuances (including common stock, options, and warrants) in accordance with ASC Topic 718-10-05. Such equity issuances encompass transactions in which an entity exchanges its equity instruments for goods or services including such transactions in which an entity obtains employee and/or director services in share-based payment transactions and issuances of stock options to employees. The Company recorded a charge of $299,875 in the year ended December 31, 2009, representing the effect on loss from operations, loss before income taxes, and net loss. The Company recorded a charge of $473,520 in the year ended December 31, 2008, representing the effect on loss from operations, loss before income taxes, and net loss. Of this amount, $138,434 related to the acceleration of stock options vesting to the former CEO as is included in restructuring expense. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The fair value of the options and warrants granted during the years ended December 31, 2009 and 2008 are determined using the Black-Scholes pricing model with the following assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

|                     |   | Year Ended   |   |
|--------------------------|--------|--------------|--------|
|                     |   | December 31, |   |
|                     |   | 2009         |   |   | 2008 |   |
| Risk-free interest rate  |   |         | 2.13   | % |   |   | 3 | % |
| Expected life (in years) |   |         | 5.0    |   |   |   | 5.0 |   |
| Expected volatility      |   |         | 104    | % |   |   | 99% - 104 | % |
| Dividend yield           |   |         | 0      | % |   |   | 0 | % |

|   | The weighted average fair values of options granted during the years ended December 31, 2009 and 2008 were $0.28 and $0.35, respectively. Also see Note N.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| [11]   | Segment information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company operates in one business segment:  the design, development and marketing of dietary and nutritional supplements that enhance health and well-being. Segment disclosures relate to sales data for geographic reasons only.                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| [12]   | Income taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined on the basis of the differences between the tax basis of assets and liabilities and their respective financial reporting amounts ("temporary differences") at enacted tax rates in effect for the years in which the differences are expected to reverse. Any resulting deferred tax asset is reduced, if necessary, by a valuation allowance for any tax benefits that are not expected to be realized. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | ASC Topic 740, “Income Taxes”, clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. It prescribes a threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition.                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Company has recorded a liability related to uncertain tax positions in the amount of approximately $40,000 for the year ended December 31, 2009 relating to certain states in which the Company is required to file state tax returns as they have effectively established nexus in these states. This amount has been recorded as a component of accounts payable and accrued expenses on the balance sheet and part of income taxes on the statement of operations. There was no liability related to uncertain tax positions recorded as of December 31, 2008.                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| [13]   | Impairment of long-lived assets:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Long-lived assets, to be held and used, are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable using expected future undiscounted cash flows.  When required, impairment losses on assets to be held and used are recognized based on the excess of the assets' carrying amount over their fair values as determined by selling prices for similar assets or application of other appropriate valuation techniques.  Long-lived assets to be disposed of are reported at the lower of their carrying amounts or fair values less disposal costs.                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| [14]   | Recent accounting pronouncements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | There were no recently issued but not yet effective accounting pronouncements that would have a material impact on the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

| [15]   | Use of estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period.  Actual results may differ from these estimates. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| [16]   | Shipping and handling fees and costs:                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |  Shipping and handling costs are included in cost of sales.                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

|                                          |   | 2009   |    |   | 2008   |   |
|-----------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                          |   |   |    |   |   |   |
| Raw materials (at contract manufacturer)      |   | $      | -       |   |   | $      | 207,286 |   |
| Work-in-process (at contract manufacturer)    |   |   | -       |   |   |   | - |   |
| Packaging supplies (at third party warehouse) |   |   | 80,611  |   |   |   | 42,861 |   |
| Finished goods (at third party warehouse)     |   |   | 645,095 |   |   |   | 902,132 |   |
| Finished goods (on consignment)               |   |   | 80,506  |   |   |   | 156,037 |   |
|                                          |   |   |    |   |   |   |   |   |
|                                          |   | $      | 806,212 |   |   | $      | 1,308,316 |   |

|                          |   | 2009   |      |   | 2008   |   |
|-------------------------------|--------|--------|-----------|--------|--------|--------|
|                          |   |   |      |   |   |   |
| Furniture and equipment       |   | $      | 815,724   |   |   | $      | 783,098 |   |
| Molds and dies                |   |   | 218,546   |   |   |   | 204,782 |   |
|                          |   |   |      |   |   |   |   |   |
|                          |   |   | 1,034,270 |   |   |   | 987,880 |   |
| Less accumulated depreciation |   |   | 923,366   |   |   |   | 751,159 |   |
|                          |   |   |      |   |   |   |   |   |
|                          |   | $      | 110,904   |   |   | $      | 236,721 |   |

|                |   | 2009   |      |   | 2008   |   |
|---------------------|--------|--------|-----------|--------|--------|--------|
|                |   |   |      |   |   |   |
| Trade payables      |   | $      | 826,236   |   |   | $      | 439,553 |   |
| Accrued expenses    |   |   | 180,086   |   |   |   | 115,801 |   |
| Commissions payable |   |   | 23,265    |   |   |   | - |   |
| Other               |   |   | 12,464    |   |   |   | - |   |
|                |   | $      | 1,042,051 |   |   | $      | 555,354 |   |

|                                                  |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Installment note payable to insurance finance company |   |   |   |   |   |   |
| due in monthly installments of $5,456, including      |   |   |   |   |   |   |
| interest at 5.00% through March 2009                  |   | $      | -      |   |   | $      | 16,231 |   |
|                                                  |   |   |   |   |   |   |   |   |
| Installment note payable to insurance finance company |   |   |   |   |   |   |   |   |
| due in monthly installments of $4,378, including      |   |   |   |   |   |   |   |   |
| interest at 6.10% through October 2009                |   |   | -      |   |   |   | 42,579 |   |
|                                                  |   |   |   |   |   |   |   |   |
| Installment note payable to insurance finance company |   |   |   |   |   |   |   |   |
| due in monthly installments of $6,135, including      |   |   |   |   |   |   |   |   |
| interest at 5.80% through February 2010               |   |   | 12,182 |   |   |   | - |   |
|                                                  |   |   |   |   |   |   |   |   |
|                                                  |   | $      | 12,182 |   |   | $      | 58,810 |   |

----

| [1]    | Employment agreements:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Company entered into an employment agreement on November 28, 2007 which became effective on January 3, 2008, with then new President and Chief Operating Officer of the Company, Jason Ash, with an initial term beginning January 3, 2008 and ending December 31, 2009.  Under the terms of the employment agreement, the agreement automatically extended for a one-year period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Under his employment agreement, Mr. Ash received an initial annual base salary of $295,000.  Mr. Ash was also entitled to receive annual bonus compensation, beginning with calendar year 2008, not to exceed 100% of Mr. Ash’s base salary, the eligibility for and amount of which shall be based upon the attainment of certain milestones agreed upon by Mr. Ash and the Compensation Committee of the Board of Directors. Mr. Ash was entitled to participate in all benefit plans offered from time to time to our senior executives.  In addition, we provided Mr. Ash with an all-inclusive relocation/travel/car stipend of $55,000 for his first year of employment and $40,000 for the second year of employment.  We also agreed to reimburse Mr. Ash for air travel to and from the UK for one trip per month during the first six months of his employment agreement up to a maximum of $2,500 per trip and to pay for all legal costs associated with obtaining a visa and green card for Mr. Ash and his spouse. On August 5, 2008, the Company amended this employment agreement by removing the title of Chief Operating Officer and adding the title of Chief Executive Officer. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | On November 28, 2007, the date Mr. Ash’s employment agreement was executed, and pursuant to Mr. Ash’s employment agreement, the Board of Directors approved the issuance of options to purchase 600,000 shares of the Company’s common stock (the “Options”) at an exercise price of $0.65 per share, the closing price on the day of the Board’s approval, which Options were to vest as follows: 150,000 shares on January 3, 2009, 150,000 shares on January 3, 2010, 150,000 shares on January 3, 2011 and 150,000 shares on January 3, 2012. To the extent not previously exercised, the Options would have terminated upon the earlier of (i) January 3, 2013 or (ii) 90 days following the termination of Mr. Ash’s employment with the Company.  The Options were not issued pursuant to any of the Company’s Stock Option Plans but were similar to those of the Company’s 2000 Incentive Stock Option Plan.                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Company entered into a Separation and Release Agreement (the “Separation Agreement”) with Mr. Ash on January 27, 2010.  Under the terms of the Separation Agreement, Mr. Ash has agreed to provide consulting services for a period of 90 days following the date of the Separation Agreement, and Mr. Ash is entitled to the sum of $5,673 per week for such consulting services. During the one-year period commencing on January 11, 2010, Mr. Ash is entitled to the sum of $295,000, less the sum of consulting fees paid during such period and less any income, wages and/or salary received by Mr. Ash during such period in respect of full-time or substantially full-time employment.  The Company also agreed to pay Mr. Ash up to $50,000 for relocation costs under certain circumstances, the cost of life insurance premiums during the period in which he provides consulting services, and the cost of health insurance coverage for a period of six months.                                                                                                                                                                                                                      |

----

|   | The Separation Agreement also provides that vesting of all options previously granted to Mr. Ash ceased as of January 11, 2010.  All unvested options are terminated and, with respect to options that had vested as of that date, such options are only exercisable during the 90-day period following the expiration of Mr. Ash’s consulting services.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company employed Dr. Portman under an employment agreement effective January 1, 2007. Under the employment agreement, Dr. Portman received a salary of $295,000 per year, as well as a car allowance in the amount of $975 per month.  In addition, Dr. Portman was entitled to an annual bonus not to exceed 100% of his base salary.  The term of Dr. Portman’s employment agreement would have terminated on December 31, 2008, unless terminated earlier by either Dr. Portman or by the Company.  On August 5, 2008, the Company entered into a Separation Agreement with Dr. Portman whereby the Company continued to pay the $295,000 salary for twelve months in exchange for a twelve-month non-compete provision. Also, all previously unvested options vested on August 5, 2008. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company entered into an employment agreement on January 3, 2008, with Matt Spolar, Vice President, Product Development and Supply Chain, that provides for minimum annual compensation of $190,000. Mr. Spolar was terminated without cause on January 15, 2010, and, under the terms of his employment agreement, the Company will pay him an amount equal to four months of his base salary.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| [2]    | Lease:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The Company has a lease agreement, as amended, for office space for the rental of 5,000 square feet expiring June 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | The future minimum lease payments due under the lease is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

| Years Ending |   |   |    |
|--------------|--------|--------|---------|
| December 31, |   |   |    |
|         |   |   |    |
| 2010         |   | $      | 115,000 |   |
| 2011         |   |   | 115,000 |   |
| 2012         |   |   | 125,000 |   |
| 2013         |   |   | 135,000 |   |
| 2014         |   |   | 135,000 |   |
| 2015         |   |   | 67,500  |   |
|         |   |   |    |   |
|         |   | $      | 692,500 |   |

|   | Rent expense amounted to $135,620 and $140,608 in 2009 and 2008, respectively. |
|--------|--------------------------------------------------------------------------------|

----

|                           |   |   |      |   |   |   |      |      |   |   | Weighted       |   |
|--------------------------------|--------|--------|-----------|--------|--------|--------|-----------|-----------|--------|--------|----------------|--------|
|                           |   |   |      |   |   |   |      | Exercise  |   |   | Average        |   |
|                           |   |   |      |   |   |   |      | Price Per |   |   | Exercise Price |   |
|                           |   | Option |      |   | Vested |   |      | Common    |   |   | Per Share      |   |
|                           |   | Shares |      |   | Shares |   |      | Share     |   |   | Outstanding    |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |
| Balance, January 1, 2008       |   |   | 2,338,500 |   |   |   | 1,074,168 |      |   | $      | 0.20 - $2.14   |   |   | $ | 0.77 |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| Granted/vested during the year |   |   | 657,500   |   |   |   | 601,333   |      |   | $      | 0.23 - $0.55   |   |   | $ | 0.35 |   |
| Exercised during the year      |   |   | -         |   |   |   | -         |      |   |   | -              |   |   |   | - |   |
| Expired during the year        |   |   | (119,000  | )      |   |   | (119,000  | )         |   | $      | 0.20 - $1.92   |   |   | $ | 0.97 |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| Balance, December 31, 2008     |   |   | 2,877,000 |   |   |   | 1,556,501 |      |   | $      | 0.20 - $2.14   |   |   | $ | 0.67 |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| Granted/vested during the year |   |   | 200,000   |   |   |   | 390,916   |      |   | $      | 0.28           |   |   | $ | 0.28 |   |
| Exercised during the year      |   |   | -         |   |   |   | -         |      |   |   | -              |   |   |   | - |   |
| Expired during the year        |   |   | (638,500  | )      |   |   | (638,500  | )         |   | $      | 0.20 - $0.72   |   |   | $ | 0.65 |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| Balance, December 31, 2009     |   |   | 2,438,500 |   |   |   | 1,308,917 |      |   | $      | 0.20 - $2.14   |   |   | $ | 0.64 |   |
|                           |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| Aggregate Intrinsic Value,     |   |   |      |   |   |   |      |      |   |   |           |   |   |   |   |   |
| December 31, 2009              |   | $      | -         |   |   | $      | -         |      |   |   |           |   |   |   |   |   |

|            |   |   |        |      |      | Weighted        |   |   |     |   |   |        |   |   |      |      |
|-----------------|--------|--------|-------------|-----------|-----------|-----------------|--------|--------|----------|--------|--------|-------------|--------|--------|-----------|-----------|
|            |   |   |        |      |      | Average         |   |   | Weighted |   |   |        |   |   | Weighted  |      |
|            |   |   |        |      |      | Remaining       |   |   | Average  |   |   |        |   |   | Average   |      |
| Range of        |   |   | Number      |      |      | Contractual     |   |   | Exercise |   |   | Number      |   |   | Exercise  |      |
| Exercise Prices |   |   | Outstanding |      |      | Life (in Years) |   |   | Price    |   |   | Exercisable |   |   | Price     |      |
|            |   |   |        |      |      |            |   |   |     |   |   |        |   |   |      |      |
| $0.20 - $2.00   |   |   |        | 2,412,500 |      |            | 2.72   |   |     | $      | 0.63   |        |   |   | 1,282,917 |      |   | $ | 0.77 |   |
| $2.01 - $2.14   |   |   |        | 26,000    |      |            | 2.19   |   |     | $      | 2.12   |        |   |   | 26,000    |      |   | $ | 2.12 |   |
|            |   |   |        |      |      |            |   |   |     |   |   |        |   |   |      |      |   |   |   |   |   |
|            |   |   |        |      | 2,438,500 |            |   | 2.72   |     |   | $      | 0.64        |   |   |      | 1,308,917 |   |   | $ | 0.80 |   |

----

|                       |   |   |      |   | Weighted       |   |
|----------------------------|--------|--------|-----------|--------|----------------|--------|
|                       |   |   |      |   | Average        |   |
|                       |   |   |      |   | Exercise Price |   |
|                       |   | Option |      |   | Per Share      |   |
|                       |   | Shares |      |   | Outstanding    |   |
|                       |   |   |      |   |           |   |
| Balance, January 1, 2008   |   |   | 1,264,332 |   |           | $      | 0.80 |   |
|                       |   |   |      |   |           |   |   |   |
| Granted during the year    |   |   | 657,500   |   |           | $      | 0.35 |   |
| Vested during the year     |   |   | (601,333  | )      |           | $      | 2.80 |   |
|                       |   |   |      |   |           |   |   |   |
| Balance, December 31, 2008 |   |   | 1,320,499 |   |           | $      | 0.52 |   |
|                       |   |   |      |   |           |   |   |   |
| Granted during the year    |   |   | 200,000   |   |           | $      | 0.28 |   |
| Vested during the year     |   |   | (390,916  | )      |           | $      | 0.56 |   |
|                       |   |   |      |   |           |   |   |   |
| Balance, December 31, 2009 |   |   | 1,129,583 |   |           | $      | 0.46 |   |

|                           |   |   |    |   |   |   |    |      |   |               | Weighted       |   |
|--------------------------------|--------|--------|---------|--------|--------|--------|---------|-----------|--------|--------------------|----------------|--------|
|                           |   |   |    |   |   |   |    | Exercise  |   |               | Average        |   |
|                           |   |   |    |   |   |   |    | Price Per |   |               | Exercise Price |   |
|                           |   | Option |    |   | Vested |   |    | Common    |   |               | Per Share      |   |
|                           |   | Shares |    |   | Shares |   |    | Share     |   |               | Outstanding    |   |
|                           |   |   |    |   |   |   |    |      |   |               |           |   |
| Balance, January 1, 2008       |   |   | 70,250  |   |   |   | 70,250  |      |   | $0.20 - $2.10 |           |   | $ | 0.39 |   |
|                           |   |   |    |   |   |   |    |      |   |               |           |   |   |   |   |   |
| Granted/vested during the year |   |   | -       |   |   |   | -       |      |   | -                  |           |   |   | - |   |
| Expired during the year        |   |   | (5,000  | )      |   |   | (5,000  | )         |   | $0.26 - $1.23 |           |   | $ | 0.75 |   |
|                           |   |   |    |   |   |   |    |      |   |               |           |   |   |   |   |   |
| Balance, December 31, 2008     |   |   | 65,250  |   |   |   | 65,250  |      |   | $0.20 - $2.10 |           |   | $ | 0.37 |   |
|                           |   |   |    |   |   |   |    |      |   |               |           |   |   |   |   |   |
| Granted/vested during the year |   |   | -       |   |   |   | -       |      |   | -                  |           |   |   | - |   |
| Expired during the year        |   |   | (41,000 | )      |   |   | (41,000 | )         |   | $0.20 - $0.83 |           |   | $ | 0.35 |   |
|                           |   |   |    |   |   |   |    |      |   |               |           |   |   |   |   |   |
| Balance, December 31, 2009     |   |   | 24,250  |   |   |   | 24,250  |      |   | $0.26 - $2.10 |           |   | $ | 0.38 |   |

----

|            |   |   |        |   |   | Weighted        |   |   |     |   |
|-----------------|--------|--------|-------------|--------|--------|-----------------|--------|--------|----------|--------|
|            |   |   | Number      |   |   | Average         |   |   | Weighted |   |
|            |   |   | Outstanding |   |   | Remaining       |   |   | Average  |   |
| Range of        |   |   | and         |   |   | Contractual     |   |   | Exercise |   |
| Exercise Prices |   |   | Exercisable |   |   | Life (in Years) |   |   | Price    |   |
|            |   |   |        |   |   |            |   |   |     |   |
| $0.20 - $2.09   |   |   |        | 23,250 |   |            | 0.59   |   |     | $      | 0.31 |   |
| $2.10           |   |   |        | 1,000  |   |            | 0.16   |   |     | $      | 2.10 |   |
|            |   |   |        |   |   |            |   |   |     |   |   |   |   |
|            |   |   |        |   | 24,250 |            |   | 0.58   |     |   | $ | 0.38 |   |

|                       |   |     |     |   | Exercise |   |         | Weighted       |   |
|----------------------------|--------|----------|----------|--------|----------|--------|--------------|----------------|--------|
|                       |   |     |     |   | Price    |   |         | Average        |   |
|                       |   |     |     |   | Per      |   |         | Exercise Price |   |
|                       |   |     |     |   | Common   |   |         | Per            |   |
|                       |   | Warrants |     |   | Share    |   |         | Common Share   |   |
|                       |   |     |     |   |     |   |         |           |   |
| Balance, January 1, 2008   |   |     | 938,930  |   |     | $      | 0.63 - $0.88 |           |   | $ | 0.64 |   |
| Expired during the year    |   |     | (911,430 | )      |     | $      | 0.63         |           |   | $ | 0.63 |   |
| Balance, December 31, 2008 |   |     | 27,500   |   |     | $      | 0.88         |           |   | $ | 0.88 |   |
| Granted during the year    |   |     | 402,500  |   |     | $      | 0.14         |           |   | $ | 0.14 |   |
| Expired during the year    |   |     | (27,500  | )      |     | $      | 0.88         |           |   | $ | 0.88 |   |
|                       |   |     |     |   |     |   |         |           |   |   |   |   |
| Balance, December 31, 2009 |   |     | 402,500  |   |     | $      | 0.14         |           |   | $ | 0.14 |   |

|                       |   |   |     |   | Weighted       |   |   |
|----------------------------|--------|--------|----------|--------|----------------|--------|--------|
|                       |   |   |     |   | Average        |   |   |
|                       |   |   |     |   | Exercise Price |   |   |
|                       |   | Option |     |   | Per Share      |   |   |
|                       |   | Shares |     |   | Outstanding    |   |   |
|                       |   |   |     |   |           |   |   |
| Balance, January 1, 2008   |   |   | -0-      |   |           |   | -      |   |   |
|                       |   |   |     |   |           |   |   |   |   |
| Granted during the year    |   |   | -0-      |   |           |   | -      |   |   |
| Vested during the year     |   |   | -0-      |   |           |   | -      |   |   |
|                       |   |   |     |   |           |   |   |   |   |
| Balance, December 31, 2008 |   |   | -0-      |   |           |   | -      |   |   |
|                       |   |   |     |   |           |   |   |   |   |
| Granted during the year    |   |   | 402,500  |   |           | $      | 0.14   |   |   |
| Vested during the year     |   |   | (113,157 | )      |           | $      | 0.14   |   |   |
|                       |   |   |     |   |           |   |   |   |   |
| Balance, December 31, 2009 |   |   | 289,343  |   |           | $      | 0.14   |   |   |

----

|                                   |   | 2009   |     |   | 2008    |   |
|----------------------------------------|--------|--------|----------|--------|---------|--------|
|                                   |   | Amount |     |   | Percent |   |   | Amount |   |   | Percent |   |
|                                   |   |   |     |   |    |   |   |   |   |   |   |   |
| U.S. federal income tax benefit        |   |   |     |   |    |   |   |   |   |   |   |   |
| at federal statutory rate              |   | $      | (692,290 | )      |    |   | 35 | % |   | $ | (698,020 | ) |   |   | 35 | % |
| Effect of state taxes, net of          |   |   |     |   |    |   |   |   |   |   |   |   |   |   |   |   |
| federal benefit                        |   |   | (118,680 | )      |    |   | 6 | % |   |   | (119,670 | ) |   |   | 6 | % |
| Reduction in state net operating       |   |   |     |   |    |   |   |   |   |   |   |   |   |   |   |   |
| losses in connection with sale of      |   |   |     |   |    |   |   |   |   |   |   |   |   |   |   |   |
| net operating losses                   |   |   | 125,500  |   |    |   | (6 | %) |   |   | - |   |   |   | 0 | % |
| Change in valuation allowance          |   |   | 318,700  |   |    |   | (16 | %) |   |   | 642,300 |   |   |   | (32 | %) |
| Stock compensation expense, (SFAS123R) |   |   | 66,100   |   |    |   | (3 | %) |   |   | 173,830 |   |   |   | (9 | %) |
| Other                                  |   |   | 38,819   |   |    |   | (2 | %) |   |   | 1,560 |   |   |   | (0 | %) |
|                                   |   |   |     |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | $      | (261,851 | )      |    |   | 14 | % |   | $ | 0 |   |   |   | 0 | % |

|                             |   | 2009   |       |   | 2008   |   |       |
|----------------------------------|--------|--------|------------|--------|--------|--------|------------|
|                             |   |   |       |   |   |   |       |
| Net operating loss carryforwards |   | $      | 5,812,000  |   |   | $      | 5,657,000  |   |   |
| Inventory reserve                |   |   | 159,000    |   |   |   | 17,000     |   |   |
| Other                            |   |   | 55,000     |   |   |   | 33,000     |   |   |
| Valuation allowance              |   |   | (6,026,000 | )      |   |   | (5,707,000 | ) |   |
|                             |   |   |       |   |   |   |       |   |   |
| Deferred tax asset               |   | $      | - 0 -      |   |   | $      | - 0 -      |   |   |

----

| [1]    | Concentrations of credit risk:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade accounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The Company has concentrated its credit risk for cash by maintaining substantially all of its depository accounts in two financial institutions. Amounts at one of the institutions are insured by the Federal Deposit Insurance Corporation up to $250,000 and amounts at the other institution are insured by the Securities Investor Protection Corporation up to $500,000. These financial institutions have a strong credit rating, and management believes that credit risk relating to these deposits is minimal.                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | The Company does not require collateral on its trade accounts receivable.  Historically, the Company has not suffered significant losses with respect to trade accounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| [2]    | Fair value of financial instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Cash, cash equivalents, accounts receivable, accounts payable and notes payable approximate their fair values due to the short-term maturity of these instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| [3]    | Major customers:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | For the years ended December 31, the Company had product sales from two customers that accounted for approximately 20% and 14% in 2009 and 18% and 15% in 2008, of net product sales.  Accounts receivable outstanding related to these customers at December 31, 2009 and 2008 were $407,125 and $200,590, respectively. Deferred revenue from one of these customers was $306,239 as of December 31, 2009 and $347,945 as of December 31, 2008. Such amounts are included in the accompanying balance sheet. The loss of these customers, a significant reduction in purchase volume by these customers, or the financial difficulty of such customers, for any reason, could significantly reduce our revenues. We have no agreement with or commitment from either of these customers with respect to future purchases. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| [4]    | Major vendors:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Two suppliers accounted for approximately 65% and 13%, respectively, of total inventory purchases for the year ended December 31, 2009 and two suppliers accounted for 62% and 16%, respectively, of total inventory purchases for the year ended December 31, 2008.  At December 31, 2009, amounts due to these two vendors represented approximately 42% and 2%, respectively, of accounts payable and accrued expenses.  At December 31, 2008, amounts due to two vendors represented approximately 23% and 0%, respectively, of accounts payable and accrued expenses.                                                                                                                                                                                                                                                       |

|          |   | 2009   |      |   | Pct.   |   |   | 2008   |   |   | Pct.      |   |
|---------------|--------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|
|          |   |   |      |   |   |   |   |   |   |   |      |   |
| United States |   | $      | 6,864,854 |   |   |   | 86     | %      |   | $      | 6,509,508 |   |   |   | 90 | % |
| Canada        |   |   | 339,234   |   |   |   | 4      | %      |   |   | 258,973   |   |   |   | 4 | % |
| Singapore     |   |   | 236,750   |   |   |   | 3      | %      |   |   | 95,957    |   |   |   | 1 | % |
| South America |   |   | 216,413   |   |   |   | 3      | %      |   |   | 199,647   |   |   |   | 3 | % |
| Other         |   |   | 337,943   |   |   |   | 4      | %      |   |   | 171,906   |   |   |   | 2 | % |
|          |   |   |      |   |   |   |   |   |   |   |      |   |   |   |   |   |
| Total         |   | $      | 7,995,194 |   |   |   | 100    | %      |   | $      | 7,235,991 |   |   |   | 100 | % |

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