U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number 0-24053

CPC of America, Inc.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction

of incorporation or organization)

11-3320709

(IRS Employer

Identification No.)

5348 Vegas Drive, #89, Las Vegas, Nevada 89108

(Address of principal executive offices)

(702) 952-9650

(Registrant’s telephone number)

(Not applicable)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ___

Accelerated filer ___

Non-accelerated filer ___

Smaller reporting company X

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ___ No X

As of August 19, 2011, the registrant had 10,149,838 shares of its $.0005 par value common stock issued and outstanding.

CPC OF AMERICA, INC.

Quarterly Report on Form 10-Q

For the Period Ended June 30, 2011

PART I - FINANCIAL INFORMATION

	Page No.
Item 1. Financial Statements.

Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010 (audited)	F-2
Unaudited Condensed Consolidated Statements of Operations for the three month and six month periods ended June 30, 2011 and 2010 and for the period from inception (April 11, 1996) to June 30, 2011	F-3
Unaudited Condensed Consolidated Statements of Shareholders’ Equity (Deficit) from inception (April 11, 1996) to June 30, 2011	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2011 and 2010 and for the period from inception (April 11, 1996) to June 30, 2011	F-8
Notes to Unaudited Condensed Consolidated Financial Statements	F-10

F-1

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Balance Sheets

(Unaudited)

				December 31,
	June 30,			2010
	2011			(Audited)
ASSETS

Current assets
Cash and equivalents	$	2,151		$	57,755
Prepaid expenses		42,416			51,703

Total current assets		44,567			109,458

Patents, net of accumulated amortization		162,367			185,127
Trademarks, net of accumulated amortization		64			273

TOTAL ASSETS	$	206,998		$	294,858

LIABILITIES & SHAREHOLDERS' DEFICIT

Current liabilities
Current portion of convertible notes, net of discount and premium	$	438,259		$	-
Accounts payable		313,997			276,352
Accrued payroll and related taxes		732,206			582,569
Accrued directors' compensation		25,000			25,000
Accrued interest		200,547			103,296
Accrued dividends payable		4,104,542			3,789,350

Total current liabilities		5,814,551			4,776,567

Long term debt - convertible notes, net of discount and premium		326,518			677,447

Total liabilities		6,141,069			5,454,014

Shareholders' deficit
Convertible preferred stock, 5,000,000 shares authorized, $.001 par value,
Series C - 271,721 shares issued and outstanding at June 30, 2011 and December 31, 2010 (Aggregate liquidation preference of $2,418,317 at June 30, 2011 and December 31, 2010)		272			272
Series D - 594,342 shares issued and outstanding at June 30, 2011 and December 31, 2010 (Aggregate liquidation preference of $5,438,229 at June 30, 2011 and December 31, 2010)		594			594
Series E - 399,037 shares issued and outstanding at June 30, 2011 and December 31, 2010 (Aggregate liquidation preference of $2,394,222 at June 30, 2011 and December 31, 2010)		399			399
Common stock, 20,000,000 shares authorized, $.0005 par value, 10,149,838 shares issued and outstanding at June 30, 2011 and December 31, 2010		5,076			5,076
Additional paid in capital - preferred		14,493,392			14,808,584
Additional paid in capital - common		32,126,708			32,077,877
Deficit accumulated during the development stage		(52,560,512	)		(52,051,958	)

Total shareholders' deficit		(5,934,071	)		(5,159,156	)

TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT	$	206,998		$	294,858

The accompanying notes are an integral part of these condensed financial statements.

F-2

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Operations

(Unaudited)

													Cumulative
													from inception
	Three Months Ended						Six Months Ended						(April 11, 1996)
	June 30,						June 30,						to June 30,
	2011			2010			2011			2010			2011

Costs and expenses
Research and development - related party	$	-		$	-		$	-		$	-		$	10,016,111
Research and development - other		44,150			35,180			79,710			70,915			13,567,379
		44,150			35,180			79,710			70,915			23,583,490
General and administrative - related party		-			-			-			-			1,781,577
General and administrative - other		150,669			177,227			316,330			393,333			18,671,172
		150,669			177,227			316,330			393,333			20,452,749

Operating Loss		(194,819	)		(212,407	)		(396,040	)		(464,248	)		(44,036,239	)

Other income (expense)
Interest expense		(58,327	)		(30,232	)		(112,514	)		(36,702	)		(235,538	)
Interest income		-			-			-			-			332,588
Loss on extinguishment of debt		-			-			-			-			(157,413	)
Increase in cash surrender value of insurance		-			-			-			-			790,910
		(58,327	)		(30,232	)		(112,514	)		(36,702	)		730,547

Net Loss	$	(253,146	)	$	(242,639	)	$	(508,554	)	$	(500,950	)	$	(43,305,692	)

Loss Per share calculation:
Net Loss	$	(253,146	)	$	(242,639	)	$	(508,554	)	$	(500,950	)
Beneficial conversion feature		-			(66,083	)		-			(66,083	)
Preferred dividend		(157,596	)		(162,345	)		(315,192	)		(349,786	)
Net loss applicable to common shares - Numerator	$	(410,742	)	$	(471,067	)	$	(823,746	)	$	(916,819	)

Basic and diluted net loss per share	$	(0.04	)	$	(0.05	)	$	(0.08	)	$	(0.09	)

Basic and diluted weighted average number of common shares outstanding - denominator		10,149,838			9,873,186			10,149,838			9,706,047

Maximum number of common shares (not included in denominator of diluted loss per share calculation due to their anti-dilutive nature) attributable to exercise/conversion of:
Outstanding options								1,853,907			1,853,907
Preferred stock								2,340,771			2,340,771
Convertible notes								1,943,727			663,424

The accompanying notes are an integral part of these condensed financial statements.

F-3

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Shareholders' Equity (Deficit) (continued)

From inception (April 11, 1996) to June 30, 2011

	Preferred Stock																				Common Stock													Deficit
	Series A				Series B				Series C				Series D				Series E												Additional		Additional			Accumulated
	Number				Number				Number				Number				Number				Number						Stock		Paid-in		Paid-in			During the			Total
	of				of				of				of				of				of						Option		Capital-		Capital-			Development			Shareholders'
	Shares		Total		Shares		Total		Shares		Total		Shares		Total		Shares		Total		Shares			Total			Costs		Common		Preferred			Stage			Equity(Deficit)
Initial capitalization		-	$	-		-	$	-		-	$	-		-	$	-		-	$	-		2,400,000		$	1,200		$	-	$	-	$	-		$	-		$	1,200
Issuance of common stock for a note		-		-		-		-		-		-		-		-		-		-		300,000			150			-		-		-			-			150
Issuance of common stock for cash		-		-		-		-		-		-		-		-		-		-		100,000			50			-		4,950		-			-			5,000
Issuance of common stock for services		-		-		-		-		-		-		-		-		-		-		764,000			382			-		37,818		-			-			38,200
Net loss for 1996		-		-		-		-		-		-		-		-		-		-		-			-			-		-		-			(59,079	)		(59,079	)
Balance, December 31, 1996		-		-		-		-		-		-		-		-		-		-		3,564,000			1,782			-		42,768		-			(59,079	)		(14,529	)
Exercise of options		-		-		-		-		-		-		-		-		-		-		26,666			13			-		29,987		-			-			30,000
Issuance of common stock for cash and conversion of note payable ($77,000)		-		-		-		-		-		-		-		-		-		-		640,000			320			-		927,680		-			-			928,000
Net loss for 1997		-		-		-		-		-		-		-		-		-		-		-			-			-		-		-			(457,829	)		(457,829	)
Balance, December 31, 1997		-		-		-		-		-		-		-		-		-		-		4,230,666			2,115			-		1,000,435		-			(516,908	)		485,642
Exercise of options		-		-		-		-		-		-		-		-		-		-		57,000			29			-		114,971		-			-			115,000
Issuance of common stock for cash		-		-		-		-		-		-		-		-		-		-		40,000			20			-		57,980		-			-			58,000
Issuance of preferred stock for cash		8,824		9		-		-		-		-		-		-		-		-		-			-			-		-		74,991			-			75,000
Valuation of beneficial conversion feature on Series A Preferred		-		-		-		-		-		-		-		-		-		-		-			-			-		-		25,000			(25,000	)		0
Contribution of officer's salary		-		-		-		-		-		-		-		-		-		-		-			-			-		80,000		-			-			80,000
Net loss for 1998		-		-		-		-		-		-		-		-		-		-		-			-			-		-		-			(640,580	)		(640,580	)
Balance, December 31, 1998		8,824		9		-		-		-		-		-		-		-		-		4,327,666			2,164			-		1,253,386		99,991			(1,182,488	)		173,062
Exercise of warrants		-		-		-		-		-		-		-		-		-		-		209,490			105			-		366,503		-			-			366,608
Exercise of options		-		-		-		-		-		-		-		-		-		-		146,904			73			-		177,289		-			-			177,362
Issuance of preferred stock for cash		70,469		70		-		-		-		-		-		-		-		-		-			-			-		-		598,930			-			599,000
Preferred stock dividend		-		-		-		-		-		-		-		-		-		-		-			-			-		-		(25,725	)		-			(25,725	)
Valuation of beneficial conversion feature on Series A Preferred		-		-		-		-		-		-		-		-		-		-		-			-			-		-		199,486			(199,486	)		0
Repurchase of common shares		-		-		-		-		-		-		-		-		-		-		(560,000	)		(280	)		-		-		-						(280	)
Net loss for 1999		-		-		-		-		-		-		-		-		-		-		-			-			-		-		-			(1,329,328	)		(1,329,328	)
Balance, December 31, 1999		79,293	$	79		-	$	-		-	$	-		-	$	-		-		-		4,124,060		$	2,062		$	-	$	1,797,178	$	872,682		$	(2,711,302	)	$	(39,301	)

F-4

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Shareholders' Equity (Deficit) (continued)

From inception (April 11, 1996) to June 30, 2011

	Preferred Stock																										Common Stock															Deficit
	Series A						Series B						Series C						Series D				Series E													Additional			Additional			Accumulated			Total
	Number						Number						Number						Number				Number				Number						Stock			Paid-in			Paid-in			During the			Shareholders'
	of						of						of						of				of				of						Option			Capital-			Capital-			Development			Equity
	Shares			Total			Shares			Total			Shares			Total			Shares		Total		shares		Total		Shares			Total			Costs			Common			Preferred			Stage			(Deficit)

Balance, December 31, 1999		79,293		$	79			-		$	0			-		$	0			-	$	0		-	$	0		4,124,060		$	2,062		$	0		$	1,797,178		$	872,682		$	(2,711,302	)	$	(39,301	)
Exercise of warrants		-			-			-			-			-			-			-		-						365,500			183			-			639,442			-			-			639,625
Exercise of options		-			-			-			-			-			-			-		-						223,832			113			-			258,528			-			-			258,641
Issuance of preferred stock for cash		-			-			71,429			71			-			-			-		-						-			-			-			-			624,929			-			625,000
Valuation of beneficial conversion feature on Series B Preferred		-			-			-			-			-			-			-		-						-			-			-			-			208,125			(208,125	)		-
Conversion of Series A Preferred into common shares		(70,469	)		(70	)		-			-			-			-			-		-						131,996			66			-			624,659			(598,930	)		-			25,725
Beneficial conversion feature on Series A Preferred shares		-			-			-			-			-			-			-		-						-			-			-			199,486			(199,486	)		-			-
Settlement of lawsuit		-			-			-			-			-			-			-		-		-		-		33,333			17			-			199,983			-			-			200,000
Purchase of patent		-			-			-			-			-			-			-		-		-		-		47,042			24			-			235,184			-			-			235,208
Stock option costs		-			-			-			-			-			-			-		-		-		-		-			-			(280,000	)		280,000			-			-			-
Amortization of stock option costs		-			-			-			-			-			-			-		-		-		-		-			-			105,000			-			-			-			105,000
Cancellation of common shares		-			-			-			-			-			-			-		-		-		-		(89,000	)		(45	)		-			-			-			-			(45	)
Net loss for 2000		-			-			-			-			-			-			-		-		-		-		-			-			-			-			-			(1,749,444	)		(1,749,444	)

Balance, December 31, 2000		8,824		$	9			71,429		$	71			-		$	0			-	$	0		-	$	0		4,836,763		$	2,420		$	(175,000	)	$	4,234,460		$	907,320		$	(4,668,871	)	$	300,409
Exercise of options		-			-			-			-			-			-			-		-		-		-		360,394			180			-			413,483			-			-			413,663
Issuance of common stock for services		-			-			-			-			-			-			-		-		-		-		100,000			50			-			255,450			-			-			255,500
Issuance of preferred stock for cash		-			-			113,715			114			95,123		$	95			-		-		-		-		-			-			-			-			1,841,392			-			1,841,601
Valuation of beneficial conversion feature on Series B Preferred		-			-			-			-			-			-			-		-		-		-		-			-			-			-			331,636			(331,636	)		-
Valuation of beneficial conversion feature on Series C Preferred		-			-			-			-			-			-			-		-		-		-		-			-			-			-			282,233			(282,233	)		-
Conversion of preferred stock and accrued dividends into common shares		(8,824	)		(9	)		(113,715	)		(114	)		-			-			-		-		-		-		330,327			165			-			1,081,316			(1,069,887	)		-			11,471
Preferred stock dividend		-			-			-			-			-			-			-		-		-		-		-			-			-			-			(63,397	)		-			(63,397	)
Issuance of common stock options for services		-			-			-			-			-			-			-		-		-		-		-			-			-			20,000			-			-			20,000
Amortization of stock option costs		-			-			-			-			-			-			-		-		-		-		-			-			140,000			-			-			-			140,000
Net loss for 2001		-			-			-			-			-			-			-		-		-		-		-			-			-			-			-			(1,968,471	)		(1,968,471	)

Balance, December 31, 2001		-			-			71,429			71			95,123			95			-		-		-		-		5,627,484			2,815			(35,000	)		6,004,709			2,229,297			(7,251,211	)		950,776
Exercise of options		-			-			-			-			-			-			-		-		-		-		282,480			140			-			317,650			-			-			317,790
Conversion of preferred stock and accrued dividends into common shares		-			-			(71,429	)		(71	)		(18,576	)		(19	)		-		-		-		-		241,627			120			-			790,205			(783,495	)		-			6,740
Valuation of beneficial conversion feature on Series C & D Preferred		-			-			-			-			-			-			-		-		-		-		-			-			-			-			1,122,521			(1,122,521	)		-
Cancellations of shares		-			-			-			-									-		-		-		-		(535,933	)		(268	)		-			(199,732	)		-			-			(200,000	)
Issuance of preferred stock for cash		-			-			-			-			264,657			265			110,627		111		-		-		-			-			-						3,367,233			-			3,367,609
Amortization of stock option costs		-			-			-			-			-			-			-		-		-		-		-			-			35,000			-			-			-			35,000
Preferred stock dividend		-			-			-			-			-			-			-		-		-		-		-			-			-			-			(122,861	)		-			(122,861	)
Purchase of Med Enclosure Stock		-			-			-			-			-			-			-		-		-		-		10,000			5			-			53,495			-			-			53,500
Net loss for 2002		-			-			-			-			-			-			-		-		-		-		-			-			-			-			-			(3,460,574	)		(3,460,574	)
Balance December 31, 2002		-		$	0			-		$	0			341,204		$	341			110,627	$	111		-	$	0		5,625,658		$	2,812		$	0		$	6,966,327		$	5,812,695		$	(11,834,306	)	$	947,980

F-5

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Shareholders' Equity (Deficit) (continued)

From inception (April 11, 1996) to June 30, 2011

	Preferred Stock																								Common Stock											Deficit
	Series A				Series B				Series C						Series D						Series E										Additional		Additional			Accumulated			Total
	Number				Number				Number						Number						Number				Number				Stock		Paid-in		Paid-in			During the			Shareholders'
	of				of				of						of						of				of				Option		Capital-		Capital-			Development			Equity
	Shares		Total		Shares		Total		of Shares			Total			Shares			Total			Shares		Total		Shares		Total		Costs		Common		Preferred			Stage			(Deficit)


Balance, December 31, 2002		-	$	0		-	$	0		341,204		$	341			110,627		$	111			-	$	0		5,625,658	$	2,812	$	0	$	6,966,327	$	5,812,695		$	(11,834,306	)	$	947,980
Exercise of options		-		-		-		-		-			-			-			-			-		-		775,117		388		-		1,351,807		-			-			1,352,195
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(26,786	)		(27	)		-			-			-		-		73,800		37		-		263,034		(244,973	)		-			18,071
Valuation of beneficial conversion feature on Series D Preferred		-		-		-		-		-			-			-			-			-		-		-		-		-		-		2,161,694			(2,161,694	)		-
Issuance of preferred stock for cash		-		-		-		-		-			-			708,824			709			-		-		-		-		-		-		6,484,373			-			6,485,082
Preferred stock dividend		-		-		-		-		-			-			-			-			-		-		-		-		-		-		(390,289	)					(390,289	)
Net loss for 2003		-		-		-		-		-			-			-			-			-		-		-		-		-		-		-			(2,759,466	)		(2,759,466	)
Balance, December 31, 2003		-		-		-		-		314,418			314			819,451			820			-		-		6,474,575		3,237		-		8,581,168		13,823,500			(16,755,466	)		5,653,573
Exercise of options		-		-		-		-		-			-			-			-			-		-		460,775		230		-		1,082,034		-			-			1,082,264
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(11,236	)		(11	)		(27,873	)		(28	)		-		-		70,918		36		-		383,428		(354,961	)		-			28,464
Preferred stock dividend		-		-		-		-		-			-			-			-			-		-		-		-		-		-		(478,594	)					(478,594	)
Stock option costs		-		-		-		-		-			-			-			-			-		-		-		-		-		4,527,784		-			-			4,527,784
Net loss for 2004		-		-		-		-		-			-			-			-			-		-		-		-		-		-		-			(8,314,255	)		(8,314,255	)
Balance, December 31, 2004		-		-		-		-		303,182			303			791,578			792			-		-		7,006,268		3,503		-		14,574,414		12,989,945			(25,069,721	)		2,499,236
Exercise of options		-		-		-		-		-			-			-			-			-		-		470,393		235		-		777,724		-			-			777,959
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(6,180	)		(6	)		(106,922	)		(107	)		-		-		176,405		88		-		1,150,457		(1,033,109	)		-			117,323
Preferred stock dividend		-		-		-		-		-			-			-			-			-		-		-		-		-		-		(501,921	)					(501,921	)
Issuance of common stock for patent		-		-		-		-		-			-			-			-			-		-		4,000		2		-		153,998		-			-			154,000
Net loss for 2005		-		-		-		-		-			-			-			-			-		-		-		-		-		-		-			(1,625,516	)		(1,625,516	)
Balance, December 31, 2005		-		-		-		-		297,002			297			684,656			685			-		-		7,657,066		3,828		-		16,656,593		11,454,915			(26,695,237	)		1,421,081
Exercise of options		-		-		-		-		-			-			-			-			-		-		732,699		367		-		1,187,471		-			-			1,187,838
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(5,618	)		(6	)		(28,418	)		(28	)		-		-		60,219		30		-		358,881		(309,966	)		-			48,911
Preferred stock dividend		-		-		-		-		-			-			-			-			-		-		-		-		-		-		(430,176	)		-			(430,176	)
Stock option costs		-		-		-		-		-			-			-			-			-		-		-		-		-		264,297		-			-			264,297
Expenses paid by officer/shareholder		-		-		-		-		-			-			-			-			-		-		-		-		-		61,252		-			-			61,252
Net loss for 2006		-		-		-		-		-			-			-			-			-		-		-		-		-		-		-			(2,811,855	)		(2,811,855	)
Balance, December 31, 2006		-		-		-		-		291,384			291			656,238			657			-		-		8,449,984		4,225		-		18,528,494		10,714,773			(29,507,092	)		(258,652	)
Exercise of options		-		-		-		-		-			-			-			-			-		-		621,551		311		-		1,553,566		-			-			1,553,877
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(2,809	)		(3	)		(27,014	)		(28	)		-		-		52,964		26		-		333,659		(272,117	)		-			61,537
Preferred stock dividend		-		-		-		-		-			-			-			-			-		-		-		-		-		-		(434,044	)		-			(434,044	)
Stock option costs		-		-		-		-		-			-			-			-			-		-		-		-		-		23,063		-			-			23,063
Net loss for 2007		-		-		-		-		-			-			-			-			-		-		-		-		-		-		-			(2,435,774	)		(2,435,774	)
Balance, December 31, 2007		-	$	-		-	$	-		288,575		$	288			629,224		$	629			-	$	-		9,124,499	$	4,562	$	-	$	20,438,782	$	10,008,612		$	(31,942,866	)	$	(1,489,993	)

F-6

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Shareholders' Equity (Deficit) (continued)

From inception (April 11, 1996) to June 30, 2011

	Preferred Stock																										Common Stock											Deficit
	Series A				Series B				Series C						Series D						Series E												Additional		Additional			Accumulated			Total
	Number				Number				Number						Number						Number						Number				Stock		Paid-in		Paid-in			During the			Shareholders'
	of				of				of						of						of						of				Option		Capital-		Capital-			Development			Equity
	Shares		Total		Shares		Total		Shares			Total			Shares			Total			Shares			Total			Shares		Total		Costs		Common		Preferred			Stage			(Deficit)

Balance, December 31, 2007		-	$	0		-	$	0		288,575		$	288			629,224		$	629			-		$	0			9,124,499	$	4,562	$	0	$	20,438,782	$	10,008,612		$	(31,942,866	)	$	(1,489,993	)
Exercise of options		-		-		-		-		-			-			-			-			-			-			154,150		77		-		592,502		-			-			592,579
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		-			-			(4,826	)		(5	)		-			-			8,045		4		-		55,159		(44,145	)		-			11,013
Valuation of beneficial conversion feature on Series E Preferred		-		-		-		-		-			-			-			-			-			-			-		-		-		-		2,459,959			(2,459,959	)		-
Issuance of preferred stock		-		-		-		-		-			-			-			-			551,703			552			-		-		-		-		3,309,668			-			3,310,220
Preferred stock dividend		-		-		-		-		-			-			-			-			-			-			-		-		-		-		(637,465	)					(637,465	)
Stock option costs		-		-		-		-		-			-			-			-			-			-			-		-		-		7,712,616		-			-			7,712,616
Contribution of officer's salary		-		-		-		-		-			-			-			-			-			-			-		-		-		344,966		-			-			344,966
Net loss		-		-		-		-		-			-			-			-			-			-			-		-		-		-		-			(11,131,691	)		(11,131,691	)
Balance, December 31, 2008		-		-		-		-		288,575			288			624,398			624			551,703			552			9,286,694		4,643		-		29,144,025		15,096,629			(45,534,516	)		(1,287,755	)
Exercise of options		-		-		-		-		-			-			-			-			-			-			29,404		15		-		232,276		-			-			232,291
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		(16,854	)		(16	)		(30,056	)		(30	)		-			-			109,048		55		-		560,900		(424,954	)		-			135,955
Issuance of preferred stock		-		-		-		-		-			-			-			-			38,834			38			-		-		-		-		232,961			-			232,999
Issuance of common stock		-		-		-		-		-			-			-			-			-			-			111,905		56		-		288,944		-			-			289,000
Valuation of beneficial conversion feature on Series E Preferred		-		-		-		-		-			-			-			-			-			-			-		-		-		-		2,464,166			(2,464,166	)		-
Preferred stock dividend		-		-		-		-		-			-			-			-			-			-			-		-		-		-		(746,449	)		-			(746,449	)
Contribution of officer's salary		-		-		-		-		-			-			-			-			-			-			-		-		-		352,462		-			-			352,462
Net loss		-		-		-		-		-			-			-			-			-			-			-		-		-		-		-			(2,887,231	)		(2,887,231	)
Balance, December 31, 2009		-		-		-		-		271,721			272			594,342			594			590,537			590			9,537,051		4,769		-		30,578,607		16,622,353			(50,885,913	)		(3,678,728	)
Conversion of preferred stock and accrued dividends into common shares		-		-		-		-		-			-			-			-			(191,500	)		(191	)		491,165		246		-		1,350,443		(1,148,809	)		-			201,689
Valuation of beneficial conversion feature on convertible debt		-		-		-		-		-			-			-			-			-			-			-		-		-		57,378		-			-			57,378
Preferred stock dividend		-		-		-		-		-			-			-			-			-			-			-		-		-		-		(664,960	)		-			(664,960	)
Shares issued for commitment fee		-		-		-		-		-			-			-			-			-			-			121,622		61		-		47,372		-			-			47,433
Amortization of convertible note premium		-		-		-		-		-			-			-			-			-			-			-		-		-		44,077		-			-			44,077
Net loss		-		-		-		-		-			-			-			-			-			-			-		-		-		-		-			(1,166,045	)		(1,166,045	)
Balance, December 31, 2010		-		-		-		-		271,721			272			594,342			594			399,037			399			10,149,838		5,076		-		32,077,877		14,808,584			(52,051,958	)		(5,159,156	)
Preferred stock dividend		-		-		-		-		-			-			-			-			-			-			-		-		-		-		(315,192	)		-			(315,192	)
Amortization of convertible note premium		-		-		-		-		-			-			-			-			-			-			-		-		-		48,831		-			-			48,831
Net loss six months ended June 30, 2011		-		-		-		-		-			-			-			-			-			-			-		-		-		-		-			(508,554	)		(508,554	)
Balance, June 30, 2011 (unaudited)		-	$	-		-	$	-		271,721		$	272			594,342		$	594			399,037		$	399			10,149,838	$	5,076		-	$	32,126,708	$	14,493,392		$	(52,560,512	)	$	(5,934,071	)

F-7

CPC OF AMERICA, INC. AND SUBSIDIARIES

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

							Cumulative
							from inception
	Six Months Ended						(April 11, 1996)
	June 30,						to June 30,
	2011			2010			2011
Cash flows from operating activities
Net loss	$	(508,554	)	$	(500,950	)	$	(43,305,692	)
Adjustments to reconcile net income to net cash used by operating activities:
Depreciation and amortization		22,969			22,968			433,954
Amortization of loan discount		15,199			8,349			25,973
Loss on extinguishment of debt		-			-			157,413
Contribution of officer's salary/expenses paid by officer		-			-			838,680
Issuance of common stock and options for services		-			-			17,396,008
Issuance of preferred stock for services		-			-			145,999
Issuance of debt for services		20,962			114,500			173,962
Changes in operating assets and liabilities
Increase (decrease) in other assets		9,287			44,320			11,357
Increase (decrease) in accounts and other payable		37,645			(39,154	)		315,173
Increase (decrease) in accrued expenses		246,888			194,313			1,145,478
Net cash used in operating activities		(155,604	)		(155,654	)		(22,661,695	)

Cash flows from investing activities
Purchase of patent		-			-			(114,795	)
Capital expenditures		-			-			(148,016	)
Redemption of cash surrender value of life insurance		-			-			790,910
Increase in cash surrender value of life insurance		-			-			(790,910	)
Net cash used in investing activities		-			-			(262,811	)

Cash flows from financing activities
Proceeds from shareholder notes		-			-			564,917
Proceeds from convertible debt		100,000			205,000			510,000
Payments on note payable to shareholder		-			-			(102,017	)
Exercise of options and warrants		-			-			4,853,421
Issuance of preferred stock		-			-			16,390,512
Issuance of common stock		-			-			915,200
Dividends		-			-			(5,051	)
Cancellation of common stock		-			-			(200,325	)
Net cash provided by financing activities		100,000			205,000			22,926,657

Net increase in cash		(55,604	)		49,346

CPC OF AMERICA INC 10-Q