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 $)
 6 Months Ended 184 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Cash flows from operating activities      
Net Loss $ (338,150) $ (6,867,948) $ (82,720,004)
Adjustments to reconcile net loss to net cash used in operating activities:      
Write off of intangible assets 0 0 505,000
Settlement of litigation and debt 67,294 (223,774) (1,510,735)
Settlement of debt due Morale/Matthews 0 0 927,903
Stock based compensation expense 870,369 1,245,736 9,116,912
Issuance of common stock for services 49,000 520,000 9,312,038
Issuance of warrants and options for legal settlement 0 0 36,457
Issuance of warrants for financing fees 0 0 153,501
Issuance of warrants for consulting fees 52,361 207,926 1,231,996
Increase in convertible notes related to default 0 0 299,274
Interest on related party loans 0 0 22,305
Patent acquisition cost 0 0 1,610,066
Amortization of issuance costs and original issue debt discounts including beneficial conversion feature-part of interest expense 0 2,813,959 19,754,169
Fair value of common stock and warrants issued to induce conversion of notes 0 0 469,043
Costs of private placement convertible notes 0 0 1,640,715
Change in fair value of derivative liability 220,614 167,575 2,115,507
Gain on extinguishment of derivative liability (3,441,752) (85,576) (5,886,847)
Amortization of deferred compensation 0 0 3,060,744
Gain on disposition of assets (46,968) 0 (32,542)
Depreciation and amortization 8,040 18,329 539,016
Bad debt 0 0 1,300
Changes in operating assets and liabilities:      
Accounts receivable 0 0 (1,380)
Prepaid expenses and other (66,685) 40,557 (106,736)
Other assets 0 0 (10,330)
Accounts payable and accrued expenses (164,776) 35,137 4,670,278
Accounts payable - license agreements 77,083 68,975 (258,204)
Accounts payable and accrued expenses - related parties (97,551) (276,218) (470,269)
Net cash used in operating activities (2,811,121) (2,335,322) (35,530,823)
Cash flows from investing activities      
Purchase of equipment (7,573) (12,773) (622,577)
Proceeds from sale of equipment 21,500 0 38,978
Net cash used in investing activities 13,927 (12,773) (583,599)
Cash flows from financing activities      
Net proceeds under equity line of credit 0 0 1,262,386
(Decrease) increase in payables to related parties and stockholder 0 0 536,979
Advances from founding executive officer 0 0 517,208
Net proceeds from issuance of convertible notes and warrants 0 1,326,740 18,400,888
Repayment of convertible notes 0 0 (296,397)
Net proceeds from sale of stock and exercise of warrants and options 5,701,139 463,450 20,199,094
Net cash provided by financing activities 5,701,139 1,790,190 40,620,158
Net increase in cash 2,903,945 (557,905) 4,505,736
Cash, beginning of period 1,601,791 617,797  
Cash, end of period 4,505,736 59,892 4,505,736
Supplemental disclosures of cash flow information      
Cash paid during the year for: Interest 260 0 179,280
Cash paid during the year for: Income taxes 800 0 9,082
Non-cash investing and financing activities      
Acquisition of intangible asset through advance from related party and issuance of common stock 0 0 505,000
Deferred compensation for stock options issued for services 0 0 3,202,931
Purchase of property and equipment financed by advance from related party 0 0 3,550
Conversion of related party debt to equity 0 0 515,000
Conversion of accounts payable and accrued expenses to common stock 0 0 860,105
Cancellation of stock 0 0 8,047
Conversion of accounts payable and accrued expenses to convertible debentures 0 33,740 689,846
Conversion of related party debt to convertible debentures 0 0 72,500
Conversion of convertible debentures to common stock 0 2,732,501 19,540,985
Issuance of shares for settlement of loans and other payable to Morale/Matthews 0 0 2,783,711
Write off of deferred compensation 0 0 142,187
Fair value of derivative liability recorded as note discount 0 0 2,130,625
Proceeds of exercise of options applied to accounts payable 0 0 67,500
Fair value of warrants and beneficial conversion feature associated with issued convertible notes 0 1,360,480 15,800,944
Fair value of warrants issued to settle payables 129,622 0 129,622
Accounts receivable on sale of equipment $ 32,500 $ 0 $ 32,500