Annual report pursuant to section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

v2.3.0.11
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended 55 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $ (3,470,113) $ (1,964,470) $ (6,394,680)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 9,300 3,854 17,312
Amortization of deferred financing costs 53,377 0 53,377
Common stock issued in exchange for intellectual property 0 295,500 383,250
Stock based compensation 435,651 139,882 686,713
Gain on extinguishment of debt 0 0 (7,908)
Changes in operating assets and liabilities:      
Prepaid expenses (79,117) (19,315) (102,430)
Accounts payable 377,453 294,132 695,198
Accrued interest 38,306 32,691 38,306
Accrued expenses (12,304) (34,789) 110,940
Deferred rent payable 9,909 19,174 29,083
Net cash used in operating activities (2,637,538) (1,233,341) (4,490,839)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of furniture and equipment (2,764) (34,279) (42,862)
Repayment of security deposit 3,156 0 0
Payment of restricted cash (90) (60,087) (60,177)
Net cash provided by (used in) investing activities 302 (94,366) (103,039)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from demand notes 0 50,000 480,000
Proceeds from notes payable 500,000 0 700,000
Proceeds from Convertible Debentures 1,501,000 0 1,501,000
Proceeds from the sale of capital stock 612,000 1,342,001 1,954,001
Net cash provided by financing activities 2,613,000 1,392,001 4,635,001
Net (decrease) increase in cash (24,236) 64,294 41,123
Cash, beginning of the period 65,359 1,065 0
Cash, end of period 41,123 65,359 41,123
Non cash investing and financing activities:      
Senior convertible notes exchanged for preferred shares 0 200,000 200,000
Capital contribution of accrued interest on convertible notes 0 0 23,725
Demand notes together with accrued interest converted into capital stock 0 549,078 549,078
Common stock issued for deferred financing costs $ 144,000 $ 0 $ 144,000