Annual report pursuant to section 13 and 15(d)

Statements of Cash Flows

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Statements of Cash Flows (USD $)
 12 Months Ended
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities:    
Net loss $ (9,551,698) $ (4,647,219)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 29,711 52,139
Write-down of inventory 23,651 0
Stock-based compensation 458,983 64,596
Common stock issued and to be issued for services 151,665 78,994
Amortization of debt discount 5,318,257 1,472,904
Issuance of note payable in connection with services 213,293 86,707
Fair value of warrants issued for consulting services 37,145 670,947
Accrued interest - promissory note 72,406 80,000
Decrease (increase) in operating assets:    
Accounts receivable 233,268 (382,314)
Inventories (325,441) (87,849)
Prepaid expenses (203,027) (27,468)
Increase (decrease) in operating liabilities:    
Accounts payable (145,413) 435,892
Accrued expenses 446,408 31,182
Net cash used in operating activities (3,240,792) (2,171,489)
Cash flows from investing activities:    
Purchase of property and equipment (78,941) (5,961)
Acquisition of patents (142,708) (323,074)
Certificate of deposit 0 20,000
Net cash used in investing activities (221,649) (309,035)
Cash flows from financing activities:    
Repayment of line of credit 0 (20,000)
Borrowings on notes payable, net of debt raising costs 611,256 4,320,150
Net proceeds from issuance of common stock 15,015,985 52,000
Exercise of warrants (4) 0
Net cash provided by financing activities 15,627,237 4,352,150
Net increase in cash and cash equivalents 12,164,796 1,871,626
Cash and cash equivalents at beginning of year 1,972,301 100,675
Cash and cash equivalents at end of year 14,137,097 1,972,301
Cash paid during the year for:    
Interest $ 0 $ 212