Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended 110 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2011
Net loss $ (7,435,422) $ (4,560,263) $ (31,480,426)
Adjustments to reconcile net loss to cash used in operating activities:      
Depreciation and amortization 584,841 580,114 2,416,038
Stock-based compensation 907,460 353,340 2,854,873
Intrinsic value of beneficial conversion feature associated with convertible debt 257,973 213,792 471,765
Issuance of stock for technology and services     89,520
Impairment of intangible assets   19,671 19,671
Loss on disposal of fixed assets 6,009   36,477
Loss on derivative warrants 12,158   12,158
Changes in:      
Prepaid expenses and other current assets (175,883) 18,584 (238,797)
Accounts payable and accrued liabilities (294,969) (322,707) 97,912
Accrued interest 158,673 305,049 463,722
Deferred rent 9,070 9,973 124,381
Cash used in operating activities (5,970,090) (3,382,447) (25,132,706)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Cash acquired in a business combination 905,649   905,649
Purchases of fixed assets (118,411) (1,652) (5,486,592)
Proceeds from sale of fixed assets     7,000
Purchases of short-term certificates of deposit     (5,500,730)
Proceeds from short-term certificates of deposit     5,500,730
Change in restricted cash 500,000   (55,000)
Payment for intangible assets     (19,671)
Cash provided by (used) in investing activities 1,287,238 (1,652) (4,648,614)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from issuance of convertible notes   2,720,985 2,720,985
Proceeds from long-term obligations   450,000 1,677,945
Payments on long-term obligations (675,743) (190,789) (1,227,944)
Payments on capital lease obligations (2,085) (1,944) (4,648)
Proceeds from issuance of common stock and warrants, net of issuance costs 10,164,546   31,874,254
Proceeds from exercise of warrant     250,000
Repurchase of common stock     (31,667)
Cash in lieu of fractional shares in a business combination (145)   (145)
Change in deferred issuance costs 28,500 99,461 28,500
Cash provided by financing activities 9,515,073 3,077,713 35,287,280
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 4,832,221 (306,386) 5,505,960
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 673,739 980,125  
CASH AND EQUIVALENTS AT END OF PERIOD 5,505,960 673,739 5,505,960
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION      
Interest paid 13,716 54,454 208,689
Fair value of derivative warrants reclassified to additional paid-in capital upon cashless exercise 48,339   48,339
Issuance of common stock in connection with the conversion of notes payable and accrued interest 3,184,707   3,184,707
Fair value of assets acquired in exchange for securities in a business combination 78,407   78,407
Fair value of liabilities assumed in exchange for securities in a business combination (439,615)   (439,615)
Goodwill resulting from a business combination $ 1,675,462   $ 1,675,462