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 $)
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Cash flows from operating activities:    
Net income (loss) $ (1,042,222) $ 2,818,184
Adjustments to reconcile net income to net cash provided by operating activities    
Depreciation and amortization 45,452 52,312
Amortization of intangibles 6,300 0
Amortization of debt discount 4,250 44,136
Share-based compensation 1,127,450  
Common stock issued for services 5,000  
Warrants issued in exchange for services 9,830  
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 (408,058) (241,437)
Prepaid expenses and other current assets 49,769 37,369
Deposits and other assets 21,302  
Accounts payable and accrued expenses (83,026) 135,862
Accrued interest 5,193 34,107
Deferred revenue 201,554 323,971
Due to related parties (952) 48,095
Net cash provided by (used in) operating activities (58,158) 596,625
Cash flows from investing activities:    
Acquisition of intangible assets (62,661)  
Acquisition of new business (441,964)  
Purchase of property and equipment (53,734) (29,562)
Net cash used in investing activities (558,359) (29,562)
Cash flows from financing activities:    
Proceeds from line of credit 579,824  
Proceeds from convertible promissory note – related party   51,000
Proceeds from promissory notes   550,000
Repayment of promissory notes   (50,000)
Repayment of convertible debentures   (735,000)
Principal payments under capital leases obligations (20,033) (11,216)
Net cash used in financing activities 559,791 (195,216)
Net increase (decrease) in cash and cash equivalents (56,726) 371,847
Cash and cash equivalents – beginning of period 233,722 104,344
Cash and cash equivalents – end of period 176,996 476,191
Cash paid during period for:    
Interest expense 0 0
Income taxes 0 0
Capital lease obligations $ 19,456