Quarterly report pursuant to sections 13 or 15(d)

Condensed Consolidated Interim Statements of Cash Flows (Unaudited)

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Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (USD $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Cash flows from operating activities:    
Net loss $ (2,020,571) $ (2,429,092)
Income from discontinued operations    (8,364)
Depreciation and amortization 192,177 317,068
Loss on sale of accounts receivable 168,814   
Bad debt expense 63,273 95,783
Stock-based compensation 61,482 33,387
Settlement of vendor liability    (75,000)
Increase (decrease) in cash attributable to changes in operating assets and liabilities:    
Accounts receivable 528,647 (147,983)
Prepaid expenses and other current assets (1,247) (22,834)
Other assets (1,408) 2,671
Payments of security deposits    (1,250)
Accounts payable and accrued expenses (257,245) 144,338
Other long-term liabilities (52,511) (8,746)
Net cash used in operating activities (1,318,589) (2,100,022)
Cash flows from investing activities:    
Purchase of property and equipment (77,303) (35,746)
Increase in restricted cash (3,145)   
Net cash used in investing activities (80,448) (35,746)
Cash flows from financing activities:    
Proceeds from the sale of common stock and warrants, net 1,142,720 484,080
Proceeds from notes payable - related parties 161,000 1,975,740
Proceeds from notes payable - non-related parties 300,000   
Payments on capital lease/equipment financing obligations    (2,587)
Proceeds from the sale of equity securities not yet issued 775,000   
Repayments of notes payable - related parties (60,000) (95,000)
Repayments of notes payable - non-related parties (123,073) (182,893)
Net cash provided by financing activities 2,195,647 2,179,340
Net increase in cash and cash equivalents from continuing operations 796,610 43,572
Cash flows from discontinued operations:    
Net cash used in operating activities of discontinued operations (1,490) (38,390)
Net change in cash and cash equivalents 795,120 5,182
Cash and cash equivalents, beginning of period 3,047 20,370
Cash and cash equivalents, end of period 798,167 25,552
Supplemental disclosure of cash flow information:    
Cash paid for interest 17,011 19,421
Supplemental schedule of non-cash financing activities:    
Conversion of notes payable - related parties to common stock 125,000 195,000
Conversion of accounts payable - related parties to common stock 35,000   
Conversion of notes and interest payable - nonrelated parties to common stock    253,311
Preferred stock converted into common stock    $ 2,500,000