Annual report pursuant to Section 13 and 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended 48 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Cash flows from operating activities      
Net loss $ (3,878,049) $ (9,497,116) $ (13,877,480)
Adjustments to reconcile net loss to net cash used in operating activities:      
Stock based compensation 358,734 3,423,800 3,846,134
Stock issued for services 135,000 763,023 898,023
Amortization of license fees 5,882 5,883 23,529
Depreciation and amortization expense 411,853 16,743 428,641
Loss on disposal of fixed assets 19,504    19,504
Impaiment of fixed assets 800,000    800,000
Impairment of goodwill    3,555,304 3,555,304
Gain on forgiveness of liabilities (280,000)    (280,000)
Gain on forgiveness of liabilities of discontinued operations (104,024)    (104,024)
Change in assets and liabilities      
Increase in accounts receivable (67,919) (206,545) (274,464)
Increase in inventory (7,371) (30,622) (37,993)
Increase in prepaid expenses and other assets (28,626) (74,377) (103,003)
Increase (decrease) in accounts payable and accrued liabilities 88,214 730,994 944,208
Decrease in accounts payable attributable to discontinued operations (13,465) (147,301) (160,766)
Net cash used in operating activities (2,560,267) (1,460,214) (4,322,387)
Cash flows used in investing activities      
Purchase of license       (100,000)
Cash assumed in reverse merger    11,150 11,150
Purchase of equipment (8,244) (1,404,567) (1,414,602)
Net cash used in investing activities (8,244) (1,393,417) (1,503,452)
Cash flows from financing activities      
Payment of deferred financing fees (125,534)    (125,534)
Net proceeds from related party advances    548,645 951,034
Proceeds from note payable    150,000 150,000
Proceeds from the issuance of preferred stock, net    483,500 483,500
Proceeds from issuance of convertible promissory notes 2,570,199    2,570,199
Proceeds from the issuance of common stock, net 213,500 1,763,889 1,986,007
Net cash provided by financing activities 2,658,165 2,946,034 6,015,206
Net increase in cash and cash equivalents 89,654 92,403 189,367
Cash and cash equivalents - beginning of period 99,713 7,310   
Cash and cash equivalents - end of period 189,367 99,713 189,367
SUPPLEMENTAL CASH FLOW INFORMATION:      
Cash paid during the period for - Interest 9,150 2,687 9,150
Cash paid during the period for - Taxes         
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS      
Equipment purchases included in accounts payable 112,000 169,421 112,000