Annual report pursuant to section 13 and 15(d)

STATEMENTS OF CASH FLOWS

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STATEMENTS OF CASH FLOWS (USD $)
12 Months Ended 144 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2012
Cash Flows from Operating Activities      
Net loss $ (2,101,702) $ (2,320,469) $ (18,522,822)
Adjustments to reconcile net loss to net cash used in operating activities:      
Options issued for services 354,040 285,600 2,986,618
Stock issued for services 246,100 355,205 2,484,095
Stock issued for interest 2,047 42,952 143,719
Book value of assets retired 0 668 6,529
Amortization of debt issuance costs 78,833 0 249,247
Depreciation 5,529 6,230 32,720
Impairment of assets 0 0 292,202
Change in:      
Accounts receivable 3,972 (9,908) (13,028)
Prepaid expenses and other assets 22,825 (13,664) (263,325)
Accounts payable and accrued liabilities 29,929 534,949 2,508,757
Net cash used in operating activities (1,358,427) (1,118,437) (10,095,288)
Cash Flows from Investing Activities      
Purchase of office furniture and equipment 0 (998) (43,529)
Net cash used in investing activities 0 (998) (43,529)
Cash Flows from Financing Activities      
Proceeds from stock and warrant sales, exercise of warrants and warrant exercise advances 789,111 770,000 5,277,566
Proceeds from issuance of debentures and notes 553,000 0 4,862,591
Net cash provided by financing activities 1,342,111 770,000 10,140,157
Net change in cash (16,316) (349,435) 1,340
Cash, beginning of period 17,666 367,101 10
Cash, end of period 1,350 17,666 1,350
Non-Cash Investing and Financing Activities      
Conversion of debentures to common stock (net) 39,779 703,546 4,297,460
Cash paid for interest 1,969 10,493 303,696
Stock issued to satisfy payables 366,364 556,027 2,353,617
Debenture issued to satisfy payable 29,007 0 154,916
Stock issued subject to put rights and call right to satisfy payables $ 0 $ 0 $ 485,649