Quarterly report pursuant to sections 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Cash flows from operating activities:    
Net loss $ (948,871) $ (1,789,766)
Less income (loss) from discontinued operations (18,664) 127,146
Loss from continuing operations (930,207) (1,916,912)
Adjustments to reconcile net loss to net cash used in operating activities:    
Bad debt expense 22,000 32,955
Gain on disposal of property and equipment    (5,879)
Depreciation and amortization 120,357 89,749
Stock-based compensation 117,847 66,104
Changes in operating assets and liabilities, net of effects of acquisition:    
Accounts receivable (140,344) (20,524)
Prepaid expenses 34,950 (22,372)
Other current assets 69,000   
Accounts payable 42,613 622,808
Accrued expenses 21,468 125,867
Deferred rent 6,889 (1,073)
Deferred revenue 105,655 120,508
Other current liabilities (69,000)   
Net cash used in operating activities (598,772) (908,769)
Cash flow from investing activities:    
Cash acquired as part of merger    337
Purchases of property and equipment (139,108) (138,183)
Purchases of courseware    (3,200)
Increase in restricted cash (139) (105,865)
Proceeds received from officer loan repayment    150,000
Net cash used in investing activities (139,247) (96,911)
Cash flows from financing activities:    
Proceeds from (repayments on) line of credit, net 250 (5,769)
Proceeds from issuance of common shares and warrants, net 519,370   
Proceeds received from issuance of convertible notes and warrants    150,000
Proceeds from related party for convertible notes    300,000
Net cash provided by financing activities 519,620 444,231
Cash flows from discontinued operations:    
Cash flows from operating activities 120,505 41,372
Net cash provided by discontinued operations 120,505 41,372
Net decrease in cash and cash equivalents (97,894) (520,077)
Cash and cash equivalents at beginning of period 577,238 766,602
Cash and cash equivalents at end of period 479,344 246,525
Supplemental disclosure of cash flow information:    
Cash paid for interest 1,284 2,431
Cash paid for income taxes      
Supplemental disclosure of non-cash investing and financing activities:    
Conversion of all preferred shares into common shares    3,469,985
Conversion of loans payable to convertible notes payable    200,000
Liabilities assumed in recapitalization    21,206
Settlement of notes payable by disposal of property and equipment    $ 15,151