Quarterly report pursuant to Section 13 or 15(d)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
 3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
REVENUES:        
Net Sales $ 0 $ 31,898 $ 0 $ 88,587
Licensing Fee 0 3,750 0 11,250
Total Revenues 0 35,648 0 99,837
COSTS AND EXPENSES:        
Cost of Sales 0 25,433 0 99,060
Selling 0 3,297 0 11,823
General and Administrative 317,728 150,179 735,666 333,021
Professional fees and Consulting expense 97,075 74,799 362,672 386,355
Research and Development 238,462 66,717 543,930 246,000
Total Costs and Expenses 653,265 320,425 1,642,268 1,076,259
LOSS FROM OPERATIONS (653,265) (284,777) (1,642,268) (976,422)
OTHER INCOME (EXPENSE):        
Fair Value Adjustment of Derivative Liability 330,323 0 709,638 0
Amortization of Bond Discount (195,905) (30,062) (482,247) (93,892)
Amortization of Deferred Finance Costs (60,669) (19,018) (72,154) (41,383)
Finance costs paid in cash 0 0 (22,950) 0
Finance costs paid in warrants, related party 0 (203,069) 0 (203,069)
Finance costs paid in stock and warrants 55,794 0 (749,185) 0
Interest expense - related party 0 (906) 0 (1,365)
Interest expense (36,340) (4,521) (108,169) (6,684)
Total Other Income (Expense) 93,203 (257,576) (725,067) (346,393)
NET LOSS $ (560,062) $ (542,353) $ (2,367,335) $ (1,322,815)
BASIC AND DILUTED LOSS PER SHARE $ (0.01) $ (0.01) $ (0.02) $ (0.01)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING 101,786,604 97,549,401 100,679,282 95,732,703