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 $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash Flows for Operating Activities:    
Net Loss $ (927,104) $ (1,058,721)
Adjustments to reconcile net loss to net cash used by operating activities:    
Stock and warrants issued for services rendered 6,037 10,722
Finance costs paid in stock and warrants 0 298,382
Amortization of deferred finance costs 28,152 4,284
Amortization of bond discount 174,558 110,628
Amortization of intangibles 6,234 242
Depreciation expense 13,203 17,933
Fair value adjustment of Derivative Liability 138,749 113,555
(Decrease) in deferred rent (19,110) (42,684)
Changes in assets and liabilities:    
(Increase) in prepaid expenses (27,959) (28,440)
(Increase) in security deposits 0 (845)
(Decrease) in accounts payable (23,591) (5,187)
Increase in accrued liabilities 74,540 45,922
Net Cash (Used) by Operating Activities (556,291) (534,209)
Net Cash (Used) by Investing Activities 0 0
Cash Flow from Financing Activities:    
Proceeds of loan payable, other 35,000 57,000
Payments of other borrowings 0 (7,682)
Payment of deferred finance costs 0 (40,358)
Proceeds from issuance of convertible debentures 500,000 432,000
Net Cash Provided by Financing Activities 535,000 440,961
(Decrease) in Cash (21,291) (93,249)
Cash at Beginning of Period 47,147 225,696
Cash at End of Period 25,856 132,447
Supplemental Disclosures of Cash Flow Information:    
Interest 0 0
Income Taxes 0 0
Supplemental Disclosure of Non-Cash Investing and Financing Activities:    
Issued Convertible Debentures 500,000 432,000
Discount on Debentures $ 377,088 $ 332,000