Quarterly report pursuant to sections 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 3 Months Ended 70 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $ (2,001,203) $ (2,014,988) $ (17,845,483)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 4,138 2,354 35,779
Amortization and write off of deferred financing costs 0 196,166 249,543
Non cash interest, consisting of beneficial conversion feature in connection with convertible debentures 0 426,152 710,000
Non cash interest, consisting of common stock and warrants issued in connection with convertible debentures 0 81,337 426,152
Non-cash financing costs related to January and March 2012 financing 0 0 81,337
Warrants issued for services rendered 10,435 0 10,435
Stock based compensation 392,323 0 1,944,194
Change in fair value of warrant liability 0 (47,023) 1,177,026
Common stock issued in exchange for intellectual property 0 0 383,250
Gain on extinguishment of debt 0 0 (7,908)
Changes in operating assets and liabilities:      
Prepaid expenses 156,968 38,383 (67,691)
Accounts payable 44,259 (512,790) 870,096
Accrued interest (3,155) (35,195) 3,111
Accrued expenses 35,993 88,503 440,058
Deferred rent payable (1,387) (513) 24,769
Net cash used in operating activities (1,361,629) (1,777,614) (11,565,332)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of furniture and fixtures 0 0 (78,535)
Payment of restricted cash and interest earned on restricted cash (22) (22) (60,289)
Net cash used in investing activities (22) (22) (138,824)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from demand notes 0 0 480,000
Proceeds from other notes payable 0 0 1,020,000
Proceeds, net of expenses of $24,000 from Convertible Debentures 0 0 1,891,000
Repayment of Convertible Debentures 0 (150,000) (150,000)
Proceeds, net of expenses of $374,870, from sale of units consisting of common stock and warrants 0 4,387,895 6,932,894
Proceeds from the sale of capital stock 0 0 1,954,001
Net cash provided by financing activities 0 4,237,895 12,127,895
Net (decrease) increase in cash (1,361,651) 2,460,259 423,739
Cash, beginning of the period 1,785,390 41,123 0
Cash, end of period 423,739 2,501,382 423,739
Supplemental disclosures of cash flow information:      
Interest paid 3,155 35,195 38,350
Non cash investing and financing activities:      
Senior convertible notes exchanged for preferred shares 0 0 200,000
Capital contribution of accrued interest 0 0 26,836
Demand notes together with accrued interest converted into capital stock 0 0 549,078
Common stock issued for deferred financing costs 0 0 144,000
Exchange of Notes Payable for Convertible Debenture 0 0 820,000
Warrants Liability reclassified to Stockholders' Equity 0 0 3,938,946
Exchange of Convertible Debenture for Units consisting of common stock and warrants $ 0 $ 0 $ 2,635,000