Quarterly report pursuant to sections 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended		171 Months Ended
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Cash flows from operating activities
Net Loss	$ (5,470,350)	$ (862,791)	$ (74,759,817)
Write off of intangible assets			505,000
Settlement of litigation and debt	(223,774)	(65,363)	(1,562,028)
Settlement of debt due Morale/Matthews			927,903
Stock based compensation expense	564,992	254,326	6,741,109
Issuance of common stock for services	150,000		8,184,788
Issuance of options for legal settlement			31,500
Issuance of warrants for legal settlement			4,957
Issuance of warrants for financing fees			153,501
Issuance of warrants for consulting fees	238,276		776,164
Increase in convertible notes related to default		948	299,274
Interest on related party loans			22,305
Patent acquisition cost			1,610,066
Amortization of issuance costs and original issue debt discounts including beneficial conversion feature-part of interest expense	2,462,666	582,799	18,596,743
Fair value of common stock and warrants issued to induce conversion of notes			469,043
Costs of private placement convertible notes			1,640,715
Change in fair value of derivative liability	1,139,477	(1,217,597)	(988,724)
Amortization of deferred compensation			3,060,744
Loss on disposition of assets			14,426
Depreciation and amortization of leasehold improvements	9,079	8,074	503,978
Bad debt			1,300
Changes in operating assets and liabilities:
Accounts receivable			(1,380)
Prepaid expenses and other	(9,331)	(12,785)	(87,157)
Other assets		(5,830)	(10,330)
Accounts payable and accrued expenses	(50,671)	124,436	4,977,179
Accounts payable – license agreements	(53,125)	(656,422)	(526,137)
Accounts payable – related parties	(9,225)	(167,610)	(39,225)
Net cash used in operating activities	(1,251,986)	(2,017,815)	(29,454,103)
Purchase of equipment	(6,921)		(605,783)
Proceeds from sale of equipment			17,478
Net cash used in investing activities	(6,921)		(588,305)
Net proceeds under equity line of credit			1,262,386
(Decrease) increase in payables to related parties and stockholder		(23,943)	536,979
Advances from founding executive officer			517,208
Net proceeds from issuance of convertible notes and warrants	1,321,240	2,251,831	17,886,288
Repayment of convertible notes			(296,397)
Proceeds from sale of stock and exercise of warrants and options	351,850	13,500	11,167,924
Net cash provided by financing activities	1,673,090	2,241,388	31,074,388
Net (decrease) increase in cash	414,183	223,573	1,031,980
Cash, beginning of period	617,797	101,645
Cash, end of period	1,031,980	325,218	1,031,980
Cash paid during the year for:
Interest	201	6,607	171,581
Income taxes			7,482
Acquisition of intangible asset through advance from related party and issuance of common stock			505,000
Deferred compensation for stock options issued for services			3,202,931
Purchase of property and equipment financed by advance from related party			3,550
Conversion of related party debt to equity			515,000
Issuance of common stock in settlement of payable			247,584
Cancellation of stock			8,047
Conversion of accounts payable and accrued expenses to common stock			612,521
Conversion of accounts payable and accrued expenses to convertible debentures	33,740	101,280	671,215
Conversion of related party debt to convertible debentures			72,500
Conversion of convertible debentures to common stock	2,425,711	402,481	18,177,062
Issuance of shares for settlement of loans and other payable to Morale/Matthews			2,783,711
Write off of deferred compensation			142,187
Fair value of derivative liability recorded as note discount			2,130,625
Proceeds of exercise of options applied to accounts payable		7,500	67,500
Fair value of warrants and beneficial conversion feature associated with issued convertible notes	$ 1,354,980	$ 2,353,111	$ 15,267,713