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 $)
 6 Months Ended 61 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss $ (5,088,678) $ (869,466) $ (11,483,358)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 6,116 4,592 23,428
Amortization and write down of deferred financing costs 196,166 0 249,543
Non cash interest, consisting of common stock and warrants issued in connection with convertible debentures 426,152 0 426,152
Non-cash financing costs related to January and March 2012 financing 81,337 0 81,337
Stock based compensation 228,532 93,892 915,245
Loss in change in fair value of warrant liability 1,177,026   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 27,889 16,890 (74,541)
Accounts payable (208,260) 151,624 486,938
Accrued interest (35,195) 0 3,111
Accrued expenses 282,515 (19,985) 393,455
Deferred rent payable (1,027) 10,089 28,056
Net cash used in operating activities (2,907,427) (612,364) (7,398,266)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of furniture and fixtures (33,814) (2,764) (76,676)
Proceeds from security deposit 0 3,156 0
Interest earned on restricted cash (45) (45) (60,222)
Net cash (used in) provided by investing activities (33,859) 347 (136,898)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from demand notes 0 0 480,000
Proceeds from other notes payable 0 0 700,000
Proceeds, net of expenses of $74,000 from Convertible Debentures 0 0 1,501,000
Repayment of Convertible Debentures (150,000) 0 (150,000)
Proceeds, net of expenses of $304,870, from sale of units consisting of common stock and warrants 4,387,894 0 4,387,894
Proceeds from the sale of capital stock 0 568,000 1,954,001
Net cash provided by financing activities 4,237,894 568,000 8,872,895
Net (decrease) increase in cash 1,296,608 (44,017) 1,337,731
Cash, beginning of the period 41,123 65,359 0
Cash, end of period 1,337,731 21,342 1,337,731
Supplemental disclosures of cash flow information:      
Interest paid 35,195 0 0
Non cash investing and financing activities:      
Senior convertible notes exchanged for preferred shares 0 0 200,000
Capital contribution of accrued interest 0 0 23,725
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 0 500,000
Warrants Liability reclassified to Stockholders' Equity 3,938,946 0 3,938,946
Exchange of Convertible Debenture for Units consisting of common stock and warrants $ 1,925,000 $ 0 $ 1,925,000