Quarterly report pursuant to Section 13 or 15(d)

Statements of Cash Flows (Unaudited)

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Statements of Cash Flows (Unaudited) (USD $)
 3 Months Ended 63 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
OPERATING ACTIVITIES      
Net loss $ (2,218,352) $ 350,737 $ (9,120,000)
Adjustments to reconcile net loss to net cash used by operating activities:      
Discontinued operations       (678,413)
Common stock issued for services       329,822
Fair value of warrants issued for services 167,966 58,572 1,351,479
Fair value of employee stock options 52,495 11,975 1,138,063
(Gain) loss on extinguishment of debt    (21,005) (89,594)
Gain on sale of asset       (70,500)
(Gain) loss on derivative liability 1,403,123 (826,902) 2,087,354
Depreciation 2,364 2,364 17,674
Amortization of patent costs 19,607 19,754 195,953
Changes in operating assets and liabilities      
Prepaid expenses and deposits 7,563 (41,292) (135,521)
Other receivables and other current assets    184,358 85,025
Accounts payable and accrued expenses (95,914) 37,267 12,710
Net Cash Used in Operating Activities (661,148) (224,172) (4,875,948)
INVESTING ACTIVITIES      
Proceeds from sale of asset       70,500
Purchase of equipment    (33,403) (58,421)
Purchase of patents and other intellectual property       (300,000)
Discontinued operations       418,000
Net Cash Provided by (Used in) Investing Activities    (33,403) 130,079
FINANCING ACTIVITIES      
Proceeds from the sale of preferred stock and warrants       1,005,000
Proceeds from the sale of common stock and warrants    1,050,000 2,150,000
Proceeds from warrants exercised for cash 111,891    4,019,451
Proceeds from related party payables       125,453
Repayments of related party payables       (125,453)
Proceeds from short-term notes payable       64,408
Repayments of short-term notes payable (14,562)    (131,671)
Repayment of convertible debentures       (490,000)
Net Cash Provided by Financing Activities 97,329 1,050,000 6,617,188
NET CHANGE IN CASH (563,819) 792,425 1,871,319
CASH AT BEGINNING OF PERIOD 2,632,413 469,786  
CASH AT END OF PERIOD 2,068,594 1,262,211 2,068,594
Interest 560    72,300
Income Taxes         
Reclassification of derivative liability to permanent equity       3,454,094
Financing of insurance premiums through issuance of short term notes       74,738
Conversion of preferred for common stock 14    14
Exercise of director options 9    9
Transfer of investment for dividends payable       186,000
Purchase of patents for debenture       500,000
Conversion of debenture       10,000
Options issued to settle accounts payable       3,991
Stock subscription receivable    $ 50,000