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 51 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
OPERATING ACTIVITIES      
Net income (loss) $ 350,737 $ (448,770) $ (5,096,027)
Adjustments to reconcile net Income (loss) to net cash used by operating activities:      
Discontinued operations       (678,413)
Common stock issued for services    10,000 20,500
Fair value of warrants issued for services 58,572    609,996
Fair value of employee stock options 11,975 11,975 691,276
Gain (loss) on extinguishment of debt (21,005)    (153,557)
Gain on sale of asset       (70,500)
(Gain) loss on warrant derivative liability (826,902) 97,710 1,669,553
Depreciation 2,364 1,250 8,218
Amortization of patent costs 19,754 19,593 117,827
Changes in operating assets and liabilities      
Prepaid expenses and deposits (41,292) 16,101 (78,483)
Other receivables and other current assets 184,358 150,147 85,025
Accounts payable and accrued expenses 37,267 (21,104) 125,479
Net Cash (Used in) Operating Activities (224,172) (163,098) (2,685,143)
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 preferred stock and warrants       1,005,000
Proceeds from the sale of common stock and warrants 1,050,000 595,000 2,100,000
Proceeds of warrants exercised for cash       1,005,000
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    (10,645) (64,408)
Repayment of convertible debentures    (51,115) (490,000)
Net Cash Provided by Financing Activities 1,050,000 533,240 3,620,000
NET INCREASE IN CASH 792,425 370,142 1,064,936
CASH AT BEGINNING OF PERIOD 469,786 422,414 197,275
CASH AT END OF PERIOD 1,262,211 792,556 1,262,211
CASH PAID FOR:      
Interest    2,180 69,923
Income Taxes         
NON CASH FINANCING ACTIVITIES:      
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    $ 50,000