Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 6 Months Ended 116 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Net loss $ (4,587,714) $ (3,560,463) $ (36,068,140)
Adjustments to reconcile net loss to cash used in operating activities:      
Depreciation and amortization 266,077 290,739 2,682,115
Stock-based compensation 823,475 257,586 3,678,348
Intrinsic value of beneficial conversion feature associated with convertible debt 0 257,973 471,765
Issuance of stock for technology and services 0 0 89,520
Impairment of intangible assets 0 0 19,671
Loss on disposal of fixed assets 0 0 36,477
Loss on derivative warrants 46,080 70,393 58,238
Changes in:      
Prepaid expenses and other current assets 115,977 25,969 (122,820)
Accounts payable and accrued liabilities 129,831 (407,216) 227,743
Accrued interest 0 158,672 463,722
Deferred rent 5,974 3,132 130,355
Cash used in operating activities (3,200,300) (2,903,215) (28,333,006)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Cash acquired in a business combination 0 905,649 905,649
Purchases of fixed assets (29,140) (23,069) (5,515,732)
Proceeds from sale of fixed assets 0 0 7,000
Purchases of short-term certificates of deposit 0 0 (5,500,730)
Proceeds from short-term certificates of deposit 0 0 5,500,730
Change in restricted cash 0 500,000 (55,000)
Payment for intangible assets 0 0 (19,671)
Cash provided by (used in) investing activities (29,140) 1,382,580 (4,677,754)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from issuance of convertible notes 0 0 2,720,985
Proceeds from long-term obligations 0 0 1,677,945
Payments on long-term obligations 0 (675,743) (1,227,944)
Payments on capital lease obligations (1,098) (1,024) (5,746)
Proceeds from issuance of common stock, net of issuance costs 4,870,978 4,866,406 36,745,232
Proceeds from exercise of warrant 0 0 250,000
Repurchase of common stock 0 0 (31,667)
Cash in lieu of fractional shares in a business combination 0 (145) (145)
Change in deferred issuance costs 0 (29,200) 28,500
Cash provided by financing activities 4,869,880 4,160,294 40,157,160
INCREASE IN CASH AND EQUIVALENTS 1,640,440 2,639,659 7,146,400
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 5,505,960 673,739 0
CASH AND EQUIVALENTS AT END OF PERIOD 7,146,400 3,313,398 7,146,400
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION      
Interest paid 0 13,700 208,689
Fair value of derivative warrants reclassified to equity upon cashless exercise 43,855 48,339 92,186
Issuance of common stock in connection with the conversion of notes payable and $463,722 in accrued interest 0 3,184,707 3,184,707
Fair value of assets acquired in exchange for securities in a business combination 0 78,408 78,408
Fair value of liabilities assumed in exchange for securities in a business combination 0 (439,616) (439,616)
Goodwill resulting from business combination $ 0 $ 1,675,462 $ 1,675,462