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 $)
 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (736,603) $ (209,580)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:    
Depreciation and amortization 67,947 1,491
Amortization of debt discount 124,076 71,151
Gain on settlement of debt    (17,800)
Stock Based Compensation 138,194 104,503
Change in fair value of derivative liabilities (304,950) 193,209
Changes in operating assets and liabilities:    
Accounts receivable (4,534) (560,847)
Prepaid expenses 7,431 (14,406)
Accounts payable and accrued expenses (76,420) 163,810
Income taxes payable    (1,600)
Settlement payable 275,000   
Due to factor    (116,585)
Deferred revenue 897,210 274,971
Net cash provided by (used in) operating activities 387,351 (111,683)
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 76,750 314,980
Repayments of notes payable (35,000) (101,420)
Repayments of advances from lenders (95,599)   
Repayments of notes payable, related party (88,236) (43,453)
Net cash (used in) provided by financing activities (142,085) 170,107
Net increase in cash 212,376 48,703
Cash, beginning of the period 108,566 6,002
Cash, end of period 320,942 54,705
Supplemental disclosures of cash flow information:    
Interest paid 77,369 99,284
Taxes paid      
Non-cash financing activities:    
Common stock issued for exercise of options paid by amounts due to the option holders of the Company 127,500   
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