Quarterly report pursuant to Section 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) (USD $)
 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (4,410,000) $ (2,562,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Amortization of intangible assets 10,000 20,000
Stock compensation expense for options and warrants issued to employees and non-employees 699,000 126,000
Issuance of shares for services 782,000 1,597,000
Amortization of debt discounts 40,000 306,000
Change in value of warrant and derivative liabilities 356,000 (783,000)
Changes in operating assets and liabilities:    
Inventory 12,000 0
Other assets (12,000) (10,000)
Accounts payable and accrued expenses 1,750,000 667,000
Net cash used in operating activities (773,000) (639,000)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from the exercise of options and warrants 0 14,000
Proceeds from notes payable 615,000 621,000
Repayment of note payable 0 (50,000)
Net cash provided by financing activities 615,000 585,000
Minority Interest 127,000 0
NET DECREASE IN CASH AND CASH EQUIVALENTS (31,000) (54,000)
CASH AND CASH EQUIVALENTS - Beginning of period 92,000 54,000
CASH AND CASH EQUIVALENTS - End of period $ 61,000 $ 0