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, 2013
Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (2,640,091) $ (5,601,171)
Adjustments to reconcile net loss to net cash used in operating activities:    
Gain on fair market valuation of derivatives (1,225,700)   
Depreciation and amortization 27,618 11,018
Loss on disposal of property and equipment    1,322
Warrants issued with common stock 383,005 13,500
Stock issued for interest expense 55,777   
Stock issued for services 671,924   
Equity instruments issued with debt greater than debt carrying amount 1,562,000   
Preferred Stock issued for compensation    200,000
Impairment of goodwill    4,799,965
Change in receivable reserve (5,000) 135,400
Changes in operating assets and liabilities:    
Accounts receivable (516,005) (71,273)
Inventory 8,102 237,682
Prepaid inventory 51,988 (7,530)
Deposits (2,439,532) 5,000
Accounts payable 1,578,564 69,771
Due to officers    (500)
Net cash used in operations (2,487,350) (206,816)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Proceeds from sale of property and equipment    6,293
Cash assumed in reverse merger 100 35
Net cash used in investing activities 100 6,328
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of notes payable 1,757,474 229,982
Proceeds from issuance of notes payable to related parties 17,502 44,190
Payment on notes payable (100,000) (150,000)
Payments on notes payable to related parties (20,000) (52,631)
Proceeds from issuance of common stock and warrants and common stock subscribed 856,660 180,000
Net cash provided by financing activities 2,511,636 251,541
NET CHANGE IN CASH AND CASH EQUIVALENTS 24,386 51,053
CASH AND CASH EQUIVALENTS, beginning of period 16,312 9,139
CASH AND CASH EQUIVALENTS, end of period 40,698 60,192
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITES    
Cash paid for interest 6,750   
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES    
Warrant expense $ 383,005 $ 13,500