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 $)
 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,120,482) $ (338,616)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:    
Depreciation and amortization 101,750 2,327
Amortization of debt discount 211,826 78,875
Gain on settlement of debt    (17,800)
Stock Based Compensation 225,764 253,107
Change in fair value of derivative liabilities (237,697) 81,972
Changes in operating assets and liabilities:    
Accounts receivable (38,629) (751,847)
Prepaid expenses (23,829) (8,028)
Accounts payable and accrued expenses 59,384 376,556
Income taxes payable    (1,600)
Settlement payable 220,000   
Due to factor    (154,990)
Deferred revenue 703,805 328,562
Net cash provided by (used in) operating activities 101,892 (151,482)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Payment of acquisition deposit (32,404)   
Payment of long term deposit    (3,056)
Purchase of equipment (486) (6,665)
Net cash used in investing activities (32,890) (9,721)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from notes payable 76,750 328,480
Repayments of notes payable (45,464) (150,260)
Repayments of advances from lenders (95,599)   
Repayments of notes payable, related party (105,236) (21,253)
Net cash (used in) provided by financing activities (169,549) 156,967
Net (decrease) in cash (100,547) (4,236)
Cash, beginning of the period 108,566 6,002
Cash, end of period 8,019  
Supplemental disclosures of cash flow information:    
Interest paid 93,360 119,648
Taxes paid      
Non-cash financing activities:    
Common stock issued for exercise of options paid by amounts due to the option holders of the Company 172,500   
Common stock issued in settlement of outstanding accounts payable    3,000
Fair value of warrants issued for licensing fees 24,558   
Common stock issued for licensing fees 89,500   
Convertible notes payable and accrued interest exchanged for licensing rights $ 609,368