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 $)
 3 Months Ended
Mar. 31, 2014
Mar. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (4,916,490) $ (1,548,370)
Adjustments to reconcile net loss to net cash used in operating activities:    
Loss on fair market valuation of derivatives 1,284,825   
Depreciation and amortization 92,982 3,070
Warrants issued with common stock 1,249,123 185,630
Stock issued for interest expense    55,777
Stock issued for services    309,048
Equity instruments issued with debt greater than debt carrying amount 1,214,000 718,000
Change in accounts receivable reserve    (5,000)
Changes in operating assets and liabilities:    
Accounts receivable 33,867 31,695
Inventory    (2,709)
Deposits 4,550 (508,000)
Accounts payable (458,001) (50,431)
Net cash used in operations (1,495,144) (811,290)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment (1,332,024)   
Net cash used in investing activities (1,332,024)   
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of notes payable 1,984,210 928,474
Proceeds from issuance of notes payable to related parties 27,500 17,502
Payment on notes payable (300,000)   
Payments on notes payable to related parties (130,000) (5,000)
Proceeds from issuance of common stock and warrants and common stock subscribed 4,014,919 290,160
Proceeds from issuance of common stock from the exercise of warrants 173,420   
Net cash provided by financing activities 5,770,049 1,231,136
NET CHANGE IN CASH AND CASH EQUIVALENTS 2,942,881 419,846
CASH AND CASH EQUIVALENTS, beginning of period 26,943 16,312
CASH AND CASH EQUIVALENTS, end of period 2,969,824 436,158
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITES    
Cash paid for interest 95,676 2,250
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES    
Warrant expense $ 1,249,123 $ 185,630