Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
 9 Months Ended 45 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Cash flows from operating activities      
Net loss $ (3,104,966) $ (5,236,963) $ (13,104,397)
Adjustments to reconcile net loss to net cash used in operating activities:      
Stock based compensation 314,367    3,801,767
Stock issued for services    233,630 763,023
Amortization of license fees 4,412 4,413 22,059
Depreciation expense 319,383 11,556 336,171
Impaiment of fixed assets 400,000    400,000
Loss on disposal of fixed assets 19,504   19,504
Impairment of goodwill    3,555,304 3,555,304
Change in assets and liabilities      
Decrease in accounts receivable 92,094 (286,999) (114,451)
Decrease in inventory 30,622      
(Increase) decrease in prepaid expenses and other assets (109,683) (140,892) (184,060)
Increase (decrease) in accounts payable and accrued liabilities 348,169 842,064 1,272,490
Increase (decrease) in accounts payable attributable to discontinued operations 2,435 (44,360) (213,193)
Net cash used in operating activities (1,683,663) (1,062,247) (3,445,783)
Cash flows used in investing activities      
Purchase of license       (100,000)
Cash assumed in reverse merger    11,150 11,150
Purchase of equipment    (1,154,772) (1,406,358)
Net cash used in investing activities    (1,143,622) (1,495,208)
Cash flows from financing activities      
Net proceeds from related party advances    926,655 951,034
Proceeds from note payable    150,000 150,000
Proceeds from issuance of common stock converted to Series B preferred stock    150,000 483,500
Proceeds from issuance of convertible promissory notes 1,378,459    1,378,459
Proceeds from the issuance of common stock, net 213,500 979,362 1,986,007
Net cash provided by financing activities 1,591,959 2,206,017 4,949,000
Net (decrease) increase in cash and cash equivalents (91,704) 148 8,009
Cash and cash equivalents - beginning of period 99,713 7,310   
Cash and cash equivalents - end of period 8,009 7,458 8,009
SUPPLEMENTAL CASH FLOW INFORMATION:      
Cash paid during the period for - Interest 6,850    9,537
Cash paid during the period for - Taxes $ 5,773    $ 5,773
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS      
Equipment purchases included in accounts payable 169,421 180,793 169,421