Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
 3 Months Ended 60 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES      
Net loss $ (492,681) $ (3,074,497) $ (15,773,396)
Issuances of common stock for services 353,658    1,007,846
Amortization of prepaid shares issued for services 16,250 2,870,403 11,160,572
Shares issued for voluntary ratchet       21,218
Officer shares contributed to third party consultant       299,737
Write off of previously capitalized patent costs       26,855
Foreign currency transaction (loss) gain (4,748)    10,959
Depreciation expense 369 517 10,518
Changes in operating assets and liabilities:      
Write off Escrow account 653 0 320
Accounts receivable       (664)
GST receivable 0 (605) (495)
Prepaid expenses and other assets 3,227 60 5,802
Accounts payable 46,752 44,967 228,175
Employee benefit liability       37,684
Accrued expenses 3,079 120,027 181,855
Accrued interest 1,446 174 188,230
NET CASH USED IN OPERATING ACTIVITIES (71,995) (38,954) (2,594,784)
CASH FLOWS FROM INVESTING ACTIVITIES      
Patent costs       (25,726)
Purchase of equipment       (14,786)
NET CASH USED IN INVESTING ACTIVITIES       (40,512)
CASH FLOWS FROM FINANCING ACTIVITIES      
Sale of common stock    10,522 1,479,675
Contributed capital       495,665
Subscriptions receivable - related party       22
Related party expenses paid on behalf of company       57,262
Loan repayments of principal stockholder (1,379)    (16,213)
Investor advances       79,112
Proceeds from other loans 16,603 0 16,603
Proceeds from directors, related parties 59,320 0 59,320
Proceeds from convertible promissory notes 0 41,247 142,306
Loan proceeds from principal stockholder       369,174
NET CASH PROVIDED BY FINANCING ACTIVITIES 74,544 51,769 2,682,926
Effect of exchange rate changes on cash (1,657) (900) (46,559)
NET INCREASE (DECREASE) IN CASH 892 11,915 1,071
CASH AT BEGINNING OF PERIOD 179 132   
CASH AT END OF PERIOD 1,071 12,047 1,071
Supplemental Disclosure of cash flow information      
Cash Paid during the period: Interest         
Cash Paid during the period: Income Tax         
Supplemental disclosure of non-cash investing and financing activities:      
Conversion of notes payable to common stock       341,208
Conversion of accrued interest to common stock       193,648
Gain on related party debt conversion       9,252
Prepaid common stock issued for services       10,860,965
Advance from Investor - related party, reclassified to common stock    80,000 80,000
Conversion of accrued expenses to common stock       36,272
Conversion of convertible notes and accrued interest to common stock $ 76,896    $ 152,790