Quarterly report pursuant to Section 13 or 15(d)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Cash Flows for Operating Activities:    
Net (Loss) for the period $ (5,676,436) $ (1,807,272)
Adjustments to reconcile net loss to net cash used by operating activities:    
Stock and warrants issued for services rendered 250,640 0
Warrants issued for Directors' Fees 13,385 21,441
Finance costs paid in stock and warrants 612,969 819,249
Amortization of deferred finance costs 0 8,570
Deferred finance costs 1,907,234 0
Amortization of bond discount 461,095 286,341
Amortization of intangibles 6,234 484
Depreciation expense 13,203 34,566
Fair value adjustment of Derivative Liability, 1,382,376 (379,315)
(Decrease) in deferred rent (19,110) (63,653)
Changes in assets and liabilities:    
(Increase) in prepaid expenses (78,627) (27,277)
(Increase) in miscellaneous receivable (118,468) 0
Decrease (Increase) in security deposits 122,917 (845)
Increase (Decrease) in accounts payable (136,139) 62,338
(Decrease) in deferred revenue (235,000) 0
(Decrease) in customer deposits (27,837) 0
Increase in accrued liabilities 113,383 97,373
Net Cash (Used) by Operating Activities (1,408,181) (948,002)
Cash Flows from Investing Activities:    
Capital expenditures 0 (3,500)
Net Cash (Used) by Investing Activities 0 (3,500)
Cash Flow from Financing Activities:    
Repayment of Loan Payable, related party (362) 0
Proceeds of loan payable, other 31,000 57,000
Payment of Deferred Finance Costs 0 (34,958)
Payments of other borrowings 0 (7,683)
Proceeds from issuance of convertible debentures 1,500,000 757,000
Proceeds from sale of common stock and exercise of warrants 85,000 50,000
Net Cash Provided by Financing Activities 1,615,638 821,359
Increase (Decrease) in Cash 207,457 (130,143)
Cash at Beginning of Period 47,147 225,696
Cash at End of Period 254,604 95,553
Cash paid during the period for:    
Interest 0 0
Income Taxes 0 0
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Issued Convertible Debentures 500,000 432,000
Discounts recorded on Issue of convertibe debentures. 377,088 332,000
Consideration for payment of Obligations to Issue Common Stock. 72,000 0
Obligation to Issue Common Stock to Accrued Liabilities 277,064 0
Convertible Debentures Issued 1,000,000 325,000
Discounts on Issue of convertibe debentures recorded. 1,000,000 500,000
Several three year 1% convertible notes in the aggregate principal amount 0 155,100
Loans Payable - Related Party was transferred to Loans Payable - Other $ 15,000 $ 0