| Delaware                          | 95-4106894                           |
|-----------------------------------|--------------------------------------|
| (State or other jurisdiction      | (I.R.S. Employer Identification No.) |
| of incorporation or organization) |                                 |

| Large Accelerated Filer ¨ |   | Accelerated Filer ¨    |
|--------------------------------|--------|-----------------------------|
| Non-accelerated filer ¨   |   | Smaller Reporting Company x |

----

| Class                                     |   | Outstanding June 30, 2010 |
|-------------------------------------------|--------|---------------------------|
|                                      |   |                      |
| Common Stock, par value $0.0001 per share |   | 54,344,575 shares         |

----

|  Index |                          |                                                                                                                   |   | Page No. |
|-------------|-------------------------------|------------------------------------------------------------------------------------------------------------------------|--------|----------|
| PART I.     | FINANCIAL INFORMATION         |                                                                                                                   |   |     |
|        |                          |                                                                                                                   |   |     |
|        | ITEM 1.                       | Financial Statements (Un-audited)                                                                                      |   |     |
|        |                          |                                                                                                                   |   |     |
|        |                          | Statement Regarding Financial Information                                                                              |   | 4        |
|        |                          |                                                                                                                   |   |     |
|        |                          | Un-audited Condensed Consolidated Balance Sheets as of May 31, 2010 and February 28, 2010                              |   | 5        |
|        |                          |                                                                                                                   |   |     |
|        |                          | Un-audited Condensed Consolidated Statements of Operations for the Three  Months Ended May 31, 2010 and 2009 |   | 6        |
|        |                          |                                                                                                                   |   |     |
|        |                          | Un-audited Condensed Consolidated Statements of Cash Flows for the Three Months Ended May 31, 2010 and 2009            |   | 7        |
|        |                          |                                                                                                                   |   |     |
|        |                          | Notes to Un-audited Condensed Consolidated Financial Statements                                                        |   | 8        |
|        |                          |                                                                                                                   |   |     |
|        | ITEM 2.                       | Management's Discussion and Analysis of Financial Condition and Results of Operations                                  |   | 16       |
|        |                          |                                                                                                                   |   |     |
|        | ITEM 4T.                      | Controls and Procedures                                                                                                |   | 20       |
|        |                          |                                                                                                                   |   |     |
| PART II.    | OTHER INFORMATION             |                                                                                                                   |   |     |
|        |                          |                                                                                                                   |   |     |
|        | ITEM 2.                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                            |   | 20       |
|        |                          |                                                                                                                   |   |     |
|        | ITEM 6.                       | Exhibits                                                                                                               |   | 20       |
|        |                          |                                                                                                                   |   |     |
|        | SIGNATURES AND CERTIFICATIONS |                                                                                                                   | 21     |

----

----

|                                                                                                                                                                           |   | May 31, 2010 |         |   | February 28, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                         |   |         |         |   |              |   |
| Current assets:                                                                                                                                                                |   |         |         |   |              |   |
| Cash and cash equivalents                                                                                                                                                      |   | $            | 14,903       |   |              | $      | 45,294 |   |
| Accounts receivable, net of allowance for doubtful accounts of $50,000  at May 31 and February 28,2010, respectively                                                 |   |         | 423,324      |   |              |   | 313,671 |   |
| Inventory - current                                                                                                                                                            |   |         | 1,500,000    |   |              |   | 1,500,000 |   |
| Other current assets                                                                                                                                                           |   |         | 269,941      |   |              |   | 241,749 |   |
| Total current assets                                                                                                                                                           |   |         | 2,208,168    |   |              |   | 2,100,714 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
| Property, plant, and equipment, net                                                                                                                                            |   |         | 520,891      |   |              |   | 557,838 |   |
| Inventory, non-current, net of allowance for obsolete inventory of $2,467,459 and $2,212,626 at May 31 and February 28, 2010, respectively                                     |   |         | 2,138,521    |   |              |   | 2,140,194 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |
| Total assets                                                                                                                                                                   |   | $            | 4,867,580    |   |              | $      | 4,798,746 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIT                                                                                                                                          |   |         |         |   |              |
| Current liabilities:                                                                                                                                                           |   |         |         |   |              |   |   |   |
| Accounts payable                                                                                                                                                               |   | $            | 1,173,332    |   |              | $      | 1,130,276 |   |
| Notes payable                                                                                                                                                                  |   |         | 490,000      |   |              |   | 547,500 |   |
| Notes payable- related party, net of debt discount of $23,400 at May 31, 2010                                                                                                  |   |         | 6,536,600    |   |              |   | 5,150,000 |   |
| Accrued expenses                                                                                                                                                               |   |         | 2,566,805    |   |              |   | 2,221,759 |   |
| Customer advances                                                                                                                                                              |   |         | 334,477      |   |              |   | 411,616 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |
| Total current liabilities                                                                                                                                                      |   |         | 11,101,214   |   |              |   | 9,461,151 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
| Convertible note payable                                                                                                                                                       |   |         | 500,000      |   |              |   | 500,000 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |
| Total liabilities                                                                                                                                                              |   |         | 11,601,214   |   |              |   | 9,961,151 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
| Commitments                                                                                                                                                                    |   |         |         |   |              |   |   |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
|                                                                                                                                                                           |   |         |         |   |              |   |   |   |
| Stockholders'  deficit :                                                                                                                                             |   |         |         |   |              |   |   |   |
| Common stock, $0.0001par value; 75,000,000 shares authorized at May 31 and February 28, 2010; 54,344,575 and 52,689,061 issued and outstanding at May 31 and February 28, 2010 |   |         | 5,434        |   |              |   | 5,268 |   |
| Additional paid-in capital                                                                                                                                                     |   |         | 376,146,801  |   |              |   | 374,890,469 |   |
| Accumulated deficit                                                                                                                                                            |   |         | (382,885,869 | )      |              |   | (380,058,142 | ) |
|                                                                                                                                                                           |   |         |         |   |              |   |
| Total stockholders' deficit                                                                                                                                                    |   |         | (6,733,634   | )      |              |   | (5,162,405 | ) |
|                                                                                                                                                                           |   |         |         |   |              |   |
| Total liabilities and stockholders' deficit                                                                                                                                    |   | $            | 4,867,580    |   |              | $      | 4,798,746 |   |
|                                                                                                                                                                           |   |         |         |   |              |   |

----

|                                                                                     |   | May 31 |       |
|------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                                     |   |   |       |
|                                                                                     |   | 2010   |       |   | 2009 |   |
|                                                                                     |   |   |       |   |   |   |
| Net Revenues                                                                             |   | $      | 587,988    |   |   | $ | 632,695 |   |
|                                                                                     |   |   |       |   |   |   |   |   |
|        Cost of goods sold                             |   |   | 300,134    |   |   |   | 301,092 |   |
|                                                                                     |   |   |       |   |   |   |
| Gross Profit                                                                             |   |   | 287,854    |   |   |   | 331,603 |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Expenses                                                                                 |   |   |       |   |   |   |   |   |
|        Engineering, research and development expenses |   |   | 461,690    |   |   |   | 509,132 |   |
|        Selling, general and administrative            |   |   | 2,328,464  |   |   |   | 1,789,695 |   |
|        Stock Option expense                           |   |   | 43,565     |   |   |   | 83,506 |   |
|                                                                                     |   |   |       |   |   |   |
|        Total costs and expenses                       |   |   | 2,833,719  |   |   |   | 2,382,333 |   |
|                                                                                     |   |   |       |   |   |   |
| Loss from operations                                                                     |   |   | (2,545,865 | ) |   |   | (2,050,730 | ) |
|                                                                                     |   |   |       |   |   |   |   |   |
| Other (income) and expense                                                               |   |   |       |   |   |   |   |   |
|        Interest expense, net                          |   |   | 220,526    |   |   |   | 100,404 |   |
|       Loss on settlement of debt                           |   |   | 57,032     |   |   |   | 22,750 |   |
|        Other income, net                              |   |   | 4,303      |   |   |   | (2,775 | ) |
|        Total other (income) expense                   |   |   | 281,861    |   |   |   | 78,673 |   |
|                                                                                     |   |   |       |   |   |   |   |   |
| Net Loss                                                                                 |   | $      | (2,827,726 | ) |   | $ | (2,171,109 | ) |
|                                                                                     |   |   |       |   |   |   |
|       Total basic and diluted loss per share               |   |   | (0.05      | ) |   | $ | (0.05 | ) |
|                                                                                     |   |   |       |   |   |   |
| Weighted average shares used to compute basic and diluted loss per share                 |   |   | 53,312,554 |   |   |   | 46,641,265 |   |
|                                                                                     |   |   |       |   |   |   |
|                                                                                     |   |   |       |   |   |   |   |   |

----

|                                                                       |   | 2010   |       |   | 2009   |   |
|----------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flow from operating activities:                                       |   |   |       |   |   |   |
| Net Loss                                                                   |   | $      | (2,827,726 | )      |   | $      | (2,171,109 | ) |
| Adjustments to reconcile Net loss to net cash used in operating activities |   |   |       |   |   |   |   |   |
| Depreciation Expense                                                       |   |   | 46,545     |   |   |   | 24,465 |   |
| Loss on settlement of debt                                                 |   |   | 57,032     |   |   |   | 22,750 |   |
| Beneficial conversion                                                      |   |   | 48,600     |   |   |   | - |   |
| Stock issued for services                                                  |   |   | 488,000    |   |   |   | - |   |
| Amortization of debt discount                                              |   |   | -          |   |   |   | 18,956 |   |
| Stock options and warrants expense                                         |   |   | 43,565     |   |   |   | 83,506 |   |
| (Increase) decrease in:Accounts receivable                                 |   |   | (109,653   | )      |   |   | 42,450 |   |
| Inventory                                                                  |   |   | 1,673      |   |   |   | 61,090 |   |
| Other current assets and deposit                                           |   |   | (28,192    | )      |   |   | (63,406 | ) |
| Increase (decrease) in:                                                    |   |   |       |   |   |   |   |   |
| Accounts payable, customer deposit and accrued expenses                    |   |   | 328,439    |   |   |   | 371,758 |   |
| Net cash used in operations                                                |   |   | (1,951,717 | )      |   |   | (1,609,540 | ) |
|                                                                       |   |   |       |   |   |   |   |   |
| Investing activities:                                                      |   |   |       |   |   |   |   |   |
| Acquisition of plant and equipment                                         |   |   | (9,599     | )      |   |   | (108,685 | ) |
|                                                                       |   |   |       |   |   |   |
| Net cash used by investing activities                                      |   |   | (9,599     | )      |   |   | (108,685 | ) |
|                                                                       |   |   |       |   |   |   |   |   |
| Financing activities:                                                      |   |   |       |   |   |   |   |   |
| Issuance of common stock                                                   |   |   | 470,925    |   |   |   | 465,000 |   |
| Proceeds from notes payable, net                                           |   |   | 1,460,000  |   |   |   | 892,500 |   |
| Exercise of warrants                                                       |   |   | -          |   |   |   | 94,428 |   |
|                                                                       |   |   |       |   |   |   |
| Net cash provided by financing activities:                                 |   |   | 1,930,925  |   |   |   | 1,451,928 |   |
|                                                                       |   |   |       |   |   |   |
| Net increase (decrease) in cash & cash equivalents                     |   |   | (30,391    | )      |   |   | (266,297 | ) |
|                                                                       |   |   |       |   |   |   |   |   |
| Cash and cash equivalents at beginning of period                           |   |   | 45,294     |   |   |   | 317,256 |   |
|                                                                       |   |   |       |   |   |   |
| Cash and cash equivalents at end of period                                 |   | $      | 14,903     |   |   | $      | 50,959 |   |
|                                                                       |   |   |       |   |   |   |
| Supplemental disclosures of cash flow information                          |   |   |       |   |   |   |   |   |
| Cash paid during the period for:                                           |   |   |       |   |   |   |   |   |
| Interest                                                                   |   | $      | -          |   |   | $      | 8,761 |   |
| Income taxes                                                               |   | $      | -          |   |   | $      | - |   |

----

----

| Machinery and equipment | 5 to 10 years |
|-------------------------|---------------|
| Furniture and fixtures  | 7 years       |

----

----

----

|                                        |   | May 31, 2010 |       |   | February 28,2010 |   |
|---------------------------------------------|--------|--------------|------------|--------|------------------|--------|
|                                        |   |         |       |   |             |   |
| Raw materials                               |   | $            | 2,320,254  |   |             | $      | 2,626,206 |   |
| Finished goods                              |   |         | 3,485,726  |   |             |   | 3,226,614 |   |
| Reserved for potential product obsolescence |   |         | (2,030,959 | )      |             |   | (2,076,018 | ) |
|                                        |   |         |       |   |             |   |
|                                        |   |         | 3,775,021  |   |             |   | 3,776,802 |   |
| Non-current portion                         |   |         | (2,138,521 | )      |             |   | (2,140,194 | ) |
| Discount on long term inventory             |   |         | (136,500   | )      |             |   | (136,608 | ) |
|                                        |   |         |       |   |             |   |
| Current portion                             |   | $            | 1,500,000  |   |             | $      | 1,500,000 |   |
|                                        |   |         |       |   |             |   |

----

|                                           |   | May 31, 2010 |      |   | February 28, 2010 |   |
|------------------------------------------------|--------|--------------|-----------|--------|-------------------|--------|
|                                           |   |         |      |   |              |   |
| Machinery and equipment                        |   | $            | 1,060,519 |   |              | $      | 1,060,519 |   |
| Furniture and fixtures                         |   |         | 1,499,699 |   |              |   | 1,493,293 |   |
| Leasehold Improvements                         |   |         | 485,080   |   |              |   | 481,887 |   |
|                                           |   |         |      |   |              |   |
|                                           |   |         | 3,045,298 |   |              |   | 3,035,699 |   |
| Less accumulated depreciation and amortization |   |         | 2,524,407 |   |              |   | 2,477,861 |   |
|                                           |   |         |      |   |              |   |
| Property, plant and equipment, net             |   | $            | 520,891   |   |              | $      | 557,838 |   |
|                                           |   |         |      |   |              |   |

|                                 |   | May 31, 2010 |      |   | February 28, 2010 |   |
|--------------------------------------|--------|--------------|-----------|--------|-------------------|--------|
|                                 |   |         |      |   |              |   |
| Accrued payroll and related expenses |   | $            | 1,889,981 |   |              | $      | 1,716,279 |   |
| Accrued interest                     |   |         | 624,205   |   |              |   | 494,830 |   |
| Other                                |   |         | 29,219    |   |              |   | 10,650 |   |
|                                 |   |         |      |   |              |   |
| Total                                |   | $            | 2,543,405 |   |              | $      | 2,221,759 |   |
|                                 |   |         |      |   |              |   |

|                                |   | May 31, 2010 |    |   | February 28, 2010 |   |
|-------------------------------------|--------|--------------|---------|--------|-------------------|--------|
|                                |   |         |    |   |              |   |
| Demand notes payable  (a) |   | $            | 100,000 |   |              | $      | 90,000 |   |
| Convertible notes payable (b)       |   |         | 890,000 |   |              |   | 957,500 |   |
|                                |   |         | 990,000 |   |              |   | 1,047,500 |   |
|                                |   |         |    |   |              |   |   |   |
| Less: Current portion               |   |         | 490,000 |   |              |   | 547,500 |   |
|                                |   |         |    |   |              |   |   |   |
| Long-term portion                   |   | $            | 500,000 |   |              | $      | 500,000 |   |
|                                |   |         |    |   |              |   |   |   |

----

| Year Ending February 28, |   |   |                                   |
|--------------------------|--------|--------|----------------------------------------|
| 2011                     |   |   | $     490,000 |   |
| 2012                     |   |   | -                                      |   |
| 2013                     |   |   | 500,000                                |   |
| Total                    |   |   | $    990,000       |   |

----

|                           |   | 2006 Plan                       |
|--------------------------------|--------|---------------------------------|
|                           |   | Weighted-Average Exercise Price |   | Aggregate Intrinsic Value |   | Number of Options |
| Outstanding, February 28, 2010 |   | $1.50                           |   |   |   | 6,283,500 |
| Issued                         |   | $1.50                           |   |   |   | 224,000 |
| Cancelled                      |   | $1.50                           |   |   |   | (3,000) |
| Outstanding, May 31, 2010      |   | $1.50                           |   |   |   | 6,504,500 |

| Options Outstanding    |   | Exercisable Options |      |
|------------------------|--------|---------------------|-----------|
| Range of ExercisePrice |   | Number              |      | Weighted Average Remaining Life |   | Weighted Average Exercise Price |   | Weighted Average Remaining Life |   | Number |   | Weighted Average Exercise Price |   |
|   $1.50           |   |                | 6,504,500 |   |   | 3.98 years |   | $ | 1.50 |   |   | 3.95 years |   |   | 6,230,745 |   | $ | 1.50 |   |

|                           | Number of Shares | Exercise Prices |
|--------------------------------|------------------|-----------------|
| Outstanding, February 28, 2010 | 6,612,793        | $0.75-4.00      |
| Issued                         | 350,642          | $1.50           |
| Outstanding, May 31, 2010      | 6,963,435        | $0.75-4.00      |

| Range of Exercise Prices |   | Stock Warrants Outstanding |   | Stock Warrants Exercisable |   | Weighted-Average Remaining Contractual Life |   | Weighted-Average Exercise Price of Warrants Outstanding |   | Weighted-Average Exercise Price of Warrants Exercisable |   |  Intrinsic Value |
|--------------------------|--------|----------------------------|--------|----------------------------|--------|---------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|-----------------------|
| $1.50                    |   | 350,642                    |   | 350,642                    |   | 93 months                                   |   | $1.50                                                   |   | $1.50                                                   |   | $0.00                 |
| $0.75-1.25               |   | 1,354,710                  |   | 1,354,710                  |   | 50 months                                   |   | $1.25                                                   |   | $1.25                                                   |   | $0.00                 |
| $1.50                    |   | 1,900,000                  |   | 1,900,000                  |   | 49 months                                   |   | $1.50                                                   |   | $1.50                                                   |   | $0.00                 |
| $2.00-$3.00              |   | 1,934,991                  |   | 1,934,991                  |   | 9 months                                    |   | $2.44                                                   |   | $2.49                                                   |   | $0.00                 |
| $3.50                    |   | 805,589                    |   | 805,589                    |   | 19 months                                   |   | $3.50                                                   |   | $3.50                                                   |   | $0.00                 |
| $4.00                    |   | 617,503                    |   | 617,503                    |   | 8 months                                    |   | $4.00                                                   |   | $4.00                                                   |   | $0.00                 |
|                     |   | 6,963,435                  |   | 6,963,435                  |   |                                        |   |                                                    |   |                                                    |   |                  |

----

|          |   | 2010   |    |   | 2009   |   |
|---------------|--------|--------|---------|--------|--------|--------|
|          |   |   |    |   |   |   |
| United States |   | $      | 393,802 |   |   | $      | 612,291 |   |
| Canada        |   |   | 81,339  |   |   |   | 4,493 |   |
| Asia          |   |   | 99,000  |   |   |   | 0 |   |
| Europe        |   |   | 6,347   |   |   |   | 15,911 |   |
| Other         |   |   | 7,500   |   |   |   | - |   |
|          |   |   |    |   |   |   |
| Total         |   | $      | 587,988 |   |   | $      | 632,695 |   |
|          |   |   |    |   |   |   |

| ·   | Our ability to generate positive cash flow from operations; |
|--------------------|-------------------------------------------------------------|

| ·   | Our ability to obtain additional financing to fund our operations; |
|--------------------|--------------------------------------------------------------------|

| ·   | Our business development and  operating development; and |
|--------------------|--------------------------------------------------------------------|

| ·   | Our expectations of growth in demand for our products. |
|--------------------|--------------------------------------------------------|

----

| ·   |   |
|--------------------|--------|

----

----

----

----

| 10.1 | Convertible note payable dated March 12, 2010, by and between Melvin Gagerman and the Company. |
|------|------------------------------------------------------------------------------------------------|