Quarterly report pursuant to sections 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, 2012
Sep. 30, 2011
Cash flows from operating activities:    
Net income (loss) $ (939,414) $ 2,804,043
Adjustments to reconcile net income to net cash provided by operating activities    
Depreciation and amortization 61,776 74,860
Amortization of intangibles 52,600 0
Amortization of debt discount 4,250 56,886
Share-based compensation 1,131,854  
Common stock issued for services 20,000 21,000
Warrants issued in exchange for services 31,089  
Gain on extinguishment of debt and derivative liability   (2,228,939)
Gain on revaluation of derivative liability   (362,035)
Return of shares for services not rendered   (65,000)
Changes in assets and liabilities:    
Accounts receivable (786,540) (560,969)
Prepaid expenses and other current assets 2,521 55,076
Deposits and other assets 20,444  
Accounts payable and accrued expenses 381,282 146,741
Accrued interest 5,208 34,519
Deferred revenue 169,065 750,648
Due to related parties (672) 49,330
Net cash provided by operating activities 153,463 776,160
Cash flows from investing activities:    
Capitalization of software costs (157,258)  
Acquisition of new business (441,964)  
Purchase of property and equipment (56,077) (71,748)
Net cash used in investing activities (655,299) (71,748)
Cash flows from financing activities:    
Proceeds from line of credit 403,008  
Proceeds from convertible promissory note – related party   51,000
Proceeds from promissory notes   550,000
Repayment of note payable to related party   (5,000)
Repayment of promissory notes   (100,000)
Repayment of convertible debentures   (735,000)
Principal payments under capital leases obligations (33,554) 17,668
Net cash provided by (used in) financing activities 369,454 (221,332)
Net increase (decrease) in cash and cash equivalents (132,382) 483,080
Cash and cash equivalents – beginning of period 233,722 104,344
Cash and cash equivalents – end of period 101,340 587,424
Cash paid during period for:    
Interest paid 0 8,395
Income taxes $ 0 $ 0