Annual report pursuant to section 13 and 15(d)

Condensed Consolidated Interim Statements of Cash Flows (Unaudited)

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Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Cash flows from operating activities:    
Net loss $ (5,207,243) $ (4,454,705)
Income (loss) from discontinued operations (41,345) (9,723)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 998,789 516,892
Impairment charge-long-lived assets    163,126
Loss on disposal of property and equipment 7,483 24,615
Change in fair value of derivative liability (799,500)   
Amortization of debt discount and deferred financing fees 66,563   
Loss on extinguishment of debt 335,315   
Bad debt expense 155,995 202,062
Stock-based compensation 199,754 97,065
Settlement of vendor liability    (75,000)
Increase (decrease) in cash attributable to changes in operating assets and liabilities:    
Accounts receivable 813,380 (193,995)
Inventory (21,084)  
Prepaid expenses and other current assets 11,569 (23,897)
Other assets 1,902 9,082
Security deposits    4,581
Accounts payable and accrued expenses (103,041) 275,530
Other long-term liabilities (114,110) (48,404)
Net cash used in operating activities (3,360,642) (3,461,117)
Cash flows from investing activities:    
Purchase of property and equipment (377,892) (139,934)
Cash paid for acquisition, net of cash acquired (17,253,648)   
Increase in restricted cash (1,000,844) (6,594)
Net cash used in investing activities (18,632,384) (146,528)
Cash flows from financing activities:    
Proceeds from the sale of common stock and warrants 1,167,239 1,065,507
Proceeds from notes payable - related parties 486,000 3,219,739
Proceeds from notes payable - non-related parties 16,800,000 208,382
Proceeds from the sale of preferred stock and warrants, net of expenses 5,731,595   
Payment of deferred financing fees (570,339)   
Payments on equipment financing obligations (1,773) (2,587)
Repayments of notes payable - related parties (486,000) (347,000)
Repayments of notes payable - non-related parties (592,039) (489,179)
Net cash provided by financing activities 22,534,683 3,654,862
Net increase in cash and cash equivalents from continuing operations 541,657 47,217
Cash flows from discontinued operations:    
Net cash used in operating activities of discontinued operations (1,490) (64,540)
Net change in cash and cash equivalents 540,167 (17,323)
Cash and cash equivalents, beginning of period 3,047 20,370
Cash and cash equivalents, end of period $ 543,214 $ 3,047