Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 9 Months Ended 108 Months Ended
Sep. 30, 2011
Sep. 30, 2010
Sep. 30, 2011
Net loss $ (5,469,502) $ (4,098,423) $ (29,514,506)
Adjustments to reconcile net loss to cash used in operating activities:      
Depreciation and amortization 439,587 435,917 2,270,784
Stock-based compensation 655,656 331,186 2,603,069
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 66,820   66,820
Changes in:      
Prepaid expenses and other current assets (224,548) 20,614 (287,462)
Accounts payable and accrued liabilities (331,357) (419,634) 61,524
Accrued interest 158,672 222,748 463,721
Deferred rent 6,083 4,765 121,394
Cash used in operating activities (4,434,607) (3,269,364) (23,597,223)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Cash acquired in a business combination 905,649   905,649
Purchases of fixed assets (112,195)   (5,480,376)
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 1,293,454   (4,642,398)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from issuance of convertible notes   2,720,985 2,720,985
Proceeds from long-term obligations     1,677,945
Payments on long-term obligations (675,743) (141,794) (1,227,944)
Payments on capital lease obligations (1,549) (1,446) (4,112)
Proceeds from issuance of common stock, net of issuance costs 4,866,406   26,576,114
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 (130,800) 99,461 (130,800)
Cash provided by financing activities 4,058,169 2,677,206 29,830,376
INCREASE (DECREASE) IN CASH AND EQUIVALENTS 917,016 (592,158) 1,590,755
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 673,739 980,125  
CASH AND EQUIVALENTS AT END OF PERIOD 1,590,755 387,967 1,590,755
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION      
Interest paid 13,716 42,888 208,689
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)
Excess of purchase price over net assets acquired in a business combination $ 1,675,462   $ 1,675,462