Quarterly report pursuant to sections 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
 3 Months Ended 181 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Mar. 31, 2013
Cash flows from operating activities      
Net Loss $ 1,582,800 $ (5,470,350) $ (80,799,054)
Adjustments to reconcile net loss to net cash used in operating activities:      
Write off of intangible assets       505,000
Settlement of litigation and debt 67,294 (223,774) (1,510,735)
Settlement of debt due Morale/Matthews       927,903
Stock based compensation expense 428,897 564,992 8,675,440
Issuance of common stock for services 49,000 150,000 9,312,038
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 23,251 238,276 1,202,886
Increase in convertible notes related to default       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 19,754,169
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 220,614 1,139,477 2,115,507
Gain on extinguishment of derivative liability (3,441,752)    (5,886,847)
Amortization of deferred compensation       3,060,744
Loss on disposition of assets       14,426
Depreciation and amortization of leasehold improvements 4,371 9,079 535,347
Bad debt       1,300
Changes in operating assets and liabilities:      
Accounts receivable       (1,380)
Prepaid expenses and other (97,219) (9,331) (137,270)
Other assets       (10,330)
Accounts payable and accrued expenses (45,299) (50,671) 4,789,755
Accounts payable - license agreements 109,375 (53,125) (225,912)
Accounts payable and accrued expenses - related parties (49,311) (9,225) (422,029)
Net cash used in operating activities (1,147,979) (1,251,986) (33,867,681)
Cash flows from investing activities      
Purchase of equipment (537) (6,921) (615,541)
Proceeds from sale of equipment       17,478
Net cash used in investing activities (537) (6,921) (598,063)
Cash flows from financing activities      
Net proceeds under equity line of credit       1,262,386
(Decrease) increase in payables to related parties and stockholder       536,979
Advances from founding executive officer       517,208
Net proceeds from issuance of convertible notes and warrants    1,321,240 18,400,888
Repayment of convertible notes       (296,397)
Proceeds from sale of stock and exercise of warrants and options 4,029,277 351,850 18,527,232
Net cash provided by financing activities 4,029,277 1,673,090 38,948,296
Net increase in cash 2,880,761 414,183 4,482,552
Cash, beginning of period 1,601,791 617,797   
Cash, end of period 4,482,552 1,031,980 4,482,552
Supplemental disclosures of cash flow information      
Cash paid during the year for: Interest 260 201 179,280
Cash paid during the year for: Income taxes       8,282
Non-cash investing and financing activities      
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
Conversion of accounts payable and accrued expenses to common stock       860,105
Cancellation of stock       8,047
Conversion of accounts payable and accrued expenses to convertible debentures    33,740 689,846
Conversion of related party debt to convertible debentures       72,500
Conversion of convertible debentures to common stock    2,425,711 19,540,985
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       67,500
Fair value of warrants and beneficial conversion feature associated with issued convertible notes    1,354,980 15,800,944
Fair value of warrants issued to settle payables $ 129,622    $ 129,622