Annual report pursuant to section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY) (USD $)
Preferred Stock Series B
Preferred Stock Series C
Common Stock
Additional Paid-In Capital
Treasury Stock
Accumulated Deficit
Total
Beginning Balance - Amount at Dec. 31, 2010     $ 21,000 $ 3,850,809    $ (3,190,797) $ 681,012
Beginning Balance - Shares at Dec. 31, 2010     21,000,000        
Rescission of common shares, Shares     (170,100)        
Rescission of common shares, Amount     (170) (164,830)       (165,000)
Common shares issued as part of merger, Shares     3,200,000        
Common shares issued as part of merger, Amount     3,200          3,200
Conversion of convertible notes into Series B preferred shares, Shares 368,411            
Conversion of convertible notes into Series B preferred shares, Amount 368     349,632       350,000
Conversion of common shares into Series C preferred shares, Shares   11,307,450 (11,307,450)        
Conversion of common shares into Series C preferred shares, Amount   11,307 (11,307)            
Issuance of common shares and warrants to settle accrued interest, Amount               
Treasury shares acquired for cash, Shares     (884,520)        
Treasury shares acquired for cash, Amount     (885) (760,315)       (761,200)
Stock-based compensation               
Net loss           (2,135,573) (2,135,573)
Ending Balance, Amount at Dec. 31, 2011 368 11,307 11,838 3,275,296    (5,326,370) (2,027,561)
Ending Balance, Shares at Dec. 31, 2011 368,411 11,307,450 11,837,930        
Conversion of all preferred shares into common shares, Shares (368,411) (11,307,450) 13,677,274        
Conversion of all preferred shares into common shares, Amount (368) (11,307) 13,677 3,467,983       3,469,985
Recapitalization, Shares     9,760,000        
Recapitalization, Amount     9,760 (30,629)       (20,869)
Conversion of convertible notes into common shares, Shares     5,293,152        
Conversion of convertible notes into common shares, Amount     5,293 1,770,532       1,775,825
Issuance of common shares and warrants for cash, net of offering costs of $446,764, Shares     9,920,000        
Issuance of common shares and warrants for cash, net of offering costs of $446,764, Amount     9,920 3,015,316       3,025,236
Issuance of common shares and warrants due to price protection, Shares     4,516,917        
Issuance of common shares and warrants due to price protection, Amount     4,517 (4,517)         
Issuance of common shares and warrants to settle accrued interest, Shares     202,446        
Issuance of common shares and warrants to settle accrued interest, Amount     203 70,451       70,654
Treasury shares acquired for cash, Shares     (264,000)        
Treasury shares acquired for cash, Amount     (264) (131,736) (70,000)    (202,000)
Issuance of common shares for services, Shares     200,000        
Issuance of common shares for services, Amount     200 69,800       70,000
Issuance of common shares and warrants for services, Shares     100,000        
Issuance of common shares and warrants for services, Amount     100 42,900       43,000
Issuance of stock options to officers to settle accrued payroll       238,562       238,562
Issuance of stock options to officers to settle note payable       22,000       22,000
Stock-based compensation       347,657       347,657
Net loss           (6,010,734) (6,010,734)
Ending Balance, Amount at Dec. 31, 2012     $ 55,244 $ 12,153,615 $ (70,000) $ (11,337,104) $ 801,755
Ending Balance, Shares at Dec. 31, 2012     55,243,719