Quarterly report pursuant to sections 13 or 15(d)

Condensed Consolidated Statements of Operations (Unaudited)

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Condensed Consolidated Statements of Operations (Unaudited) (USD $)
 3 Months Ended 9 Months Ended 37 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Revenues          
Service fees $ 4,589 $ 981 $ 10,604 $ 981 $ 13,403
Sales 4,254    235,726 59,490 295,216
TOTAL REVENUE 8,843 981 246,330 60,471 308,619
Costs          
Cost of services 3,893    5,683    6,900
Cost of sales 3,145    190,201 60,830 251,031
TOTAL COST OF REVENUE 7,038 981 195,884 60,830 257,931
Gross profit 1,805 981 50,446 (359) 50,688
Operating expenses          
Compensation 658,574 158,096 1,774,531 468,002 10,438,160
Other operating expenses 117,479 120,446 421,699 294,897 618,911
General and administrative 385,814 1,380,923 1,444,758 2,511,918 5,904,088
TOTAL OPERATING EXPENSES 1,161,867 1,659,465 3,640,988 3,274,817 16,961,159
Loss from operations (1,160,062) (1,658,484) (3,590,542) (3,275,176) (16,910,471)
Other income (expense)          
Interest expense, net (6,467) (4,828) (7,009) (25,560) (98,114)
Loss on exchange of warrants for common stock           (485,000)
Gain on change in fair value of derivative liability    94,380    3,372,543 245,217
Total other income (loss) (6,467) 89,552 (7,009) 3,346,983 (337,897)
Loss before income taxes (1,166,529) (1,568,932) (3,597,551) 71,807 (17,248,368)
Income tax provision               
Net loss $ (1,166,529) $ (1,568,932) $ (3,597,551) $ 71,807 $ (17,248,368)
Net loss per share - basic and diluted $ (0.03) $ (0.13) $ (0.09) $ 0.00  
Weighted average number of common shares outstanding - basic 40,996,444 12,131,442 39,850,937 19,864,030  
Weighted average number of common shares outstanding - diluted 40,996,444 12,139,050 39,850,937 19,871,836