Annual report pursuant to section 13 and 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
 12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (7,301,313) $ (5,903,460)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 182,089 219,552
Stock based compensation 626,787 22,947
Amortization of debt discount and beneficial conversion charge 2,869 740,603
Amortization of Deferred Financing Costs 2,644 0
Noncash Interest Expense Related to Notes Payable 1,959 847,082
Loss on Sale of Inventory 0 1,934,630
Loss on Disposal of Equipment 18,399 945
Changes in operating assets and liabilities    
Accounts receivable (39,112) 0
Inventories (118,248) 308,480
Prepaid Expenses (48,517) 5,537
Restricted Cash (115,041) 90,000
Accounts payable (244,743) 40,160
Accrued expenses 150,622 284,526
Deferred rent liability (22,190) (22,190)
Net cash used in operating activities (6,903,795) (1,431,188)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of equipment (118,853) (270)
Net cash used in investing activities (118,853) (270)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of common stock, net of note payable conversion 17,287,288 0
Payment of equity issuance costs (1,338,009) 0
Proceeds from Note Payable, Net of Fees 3,906,000 0
Debt Issuance Costs (25,000) 0
Repurchase of Common Stock (150,000) 0
Proceeds from Convertible Notes Payable 0 1,500,000
Repayments of notes payable (200,000) (200,000)
Payments of leasehold improvement loan (9,730) (9,742)
Net cash provided by financing activities 19,470,549 1,290,258
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,447,901 (141,200)
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 87,771 228,971
CASH AND CASH EQUIVALENTS - END OF PERIOD 12,535,672 87,771
Cash paid for interest 1,085 15,273
Supplemental Disclosure of Noncash Financing Activities:    
Preferred stock issued upon note payable and interest conversion 0 9,636,603
Equity issuance costs, accrued and not paid 69,533 421,077
Issuance of common stock through the cashless exercise of warrants 0 57
Stock retained by stockholders of shell company 53 0
Conversion of notes payable and interest in private placement 262,740 0
End of term liability for note payable 106,000 0
Warrants issued in connection with note payable $ 229,345 $ 0