Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $)
 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,076,185) $ (54,644)
Adjustments to reconcile net loss to cash flows used in operating activities:    
Depreciation and amortization 34,000 655
Amortization of debt discount 31,216 21,958
Gain on settlement of debt    (17,000)
Stock Based Compensation 84,286 29,587
Loss on change of fair value of derivative liability 611,282 37,931
Changes in operating assets and liabilities:    
Accounts receivable (3,896) (241,966)
Prepaid expenses 10,130 13,058
Accounts payable and accrued expenses 62,543 90,616
Income taxes payable    (1,600)
Due to factor    (56,585)
Deferred revenue 246,768 125,214
Net cash provided by (used in) operating activities 144 (52,776)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Payment of acquisition deposit (13,654)   
Purchase of equipment (486) (4,586)
Net cash used in investing activities (14,140) (4,586)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from notes payable 76,750 200,000
Repayments of notes payable (35,000)   
Repayments of notes payable, related party (7,500) (20,700)
Net cash provided by financing activities 34,250 179,300
Net increase in cash 20,254 121,938
Cash, beginning of the period 108,566 6,002
Cash, end of period 128,820 127,940
Supplemental disclosures of cash flow information:    
Interest paid 119,648 29,415
Taxes paid      
Non-cash financing activities:    
Common stock issued for exercise of options paid by amounts due to the option holders of the Company 37,500   
Fair value of warrants issued for licensing fees 24,558   
Common stock issued for licensing fees 89,500   
Common stock issued in settlement of accounts payable    3,000
Common stock issued for services rendered    170,347
Common stock issued in settlement of debt    $ 11,250