Quarterly report pursuant to sections 13 or 15(d)

STATEMENTS OF CASH FLOWS

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STATEMENTS OF CASH FLOWS (USD $)
 9 Months Ended 125 Months Ended
Jul. 31, 2012
Jul. 31, 2011
Jul. 31, 2012
OPERATING ACTIVITIES      
Net loss $ (10,079,628) $ (5,237,535) $ (45,567,484)
Adjustments to reconcile net loss to net cash used in operating activities:      
Non-cash charges to consultants and employees for options and stock 877,251 619,326 4,677,896
Amortization of deferred financing costs 0 0 260,000
Amortization of discount on convertible promissory notes 1,331,368 455,619 2,487,761
Impairment of intangible assets 0 0 26,087
Non-cash interest expense 2,885,053 2,198,214 11,455,784
(Gain) loss on change in value of warrants and embedded derivative (6,020,434) (7,134,709) (20,423,120)
Warrant Expense 0 71,899 764,210
Employee Stock Purchase Plan expense 9,727 0 9,727
Value of penalty shares issued 0 0 149,276
Depreciation expense 9,184 28,406 204,858
Amortization expense of intangibles 109,859 99,274 704,499
Other Income 0 0 33,478
Loss (Gain) on note retirement 2,173,491 109,492 978,646
Changes in operating assets and liabilities :      
Decrease (increase) in prepaid expenses (2,452) (12,352) (39,925)
Decrease in grant receivable 0 244,479 0
Decrease (increase) in other current assets (30,961) (27,221) (33,182)
Increase in other assets 0 (140,222) (132,271)
Decrease (increase) in deferred expenses 365,925 (43,830) (506,450)
Increase in accounts payable and accrued expenses 4,445,333 1,258,911 11,370,590
(Decrease) increase in deferred rent (43,228) 61,231 19,212
Increase (decrease) in interest payable 24,759 51,469 (41,104)
Net cash used in operating activities (3,944,753) (7,397,549) (33,610,512)
INVESTING ACTIVITIES      
Purchase of property and equipment (91,844) 0 (241,937)
Cost of intangible assets (258,940) (239,019) (3,219,620)
Net cash used in Investing Activities (350,784) (239,019) (3,461,557)
FINANCING ACTIVITIES      
Proceeds from convertible debenture 500,000 875,000 2,495,000
(Increase) in deferred offering expenses (58,500) (23,500) (110,500)
Cash paid for deferred financing costs 0 (25,000) (584,493)
Principal payments on notes payable (87,941) (613,573) (2,779,030)
Proceeds from notes payable 2,388,963 6,701,775 16,340,885
Deferred Investment Funds 50,000 0 50,000
Net proceeds of issuance of Preferred Stock 0 1,342,672 8,610,499
Cancellation of warrants 0 0 (600,000)
Proceeds from exercise of warrants 411,765 1,085,001 1,666,766
Net proceeds of issuance of common stock 0 0 11,988,230
Net cash provided by Financing Activities 3,204,287 9,342,375 37,077,357
Net increase (decrease) in cash (1,091,250) 1,705,807 5,288
Cash at beginning of period 1,096,538 108,381 0
Cash at end of period $ 5,288 $ 1,814,188 $ 5,288