Net Loss and Operating Loss
Our operating loss for the period from January 25, 2012 (inception) to December 31, 2012 was $1,725,086. Our operating loss for the year ended December 31, 2013 was $4,881,849. Our net loss for the period from January 25, 2012 (inception) to December 31, 2012 was $1,558,650. Our net loss for the year ended December 31, 2013 was $10,597,529. Our net loss for the year ended December 31, 2013 consisted of $1,345,414 of interest expense and $4,370,266 loss due to derivative liabilities associated with our convertible notes and warrants.
Selling, general and administrative expenses
Selling, general and administrative expenses totaled $1,725,086 for the period from January 25, 2012 (inception) to December 31, 2012, and 4,942,160 for the year ending December 31, 2013. Included in these expenses for the year ending December 31, 2013 were payroll and related expenses of $1,070,511, stock based compensation expense totaled $921,145, share issued for services totaled $557,599, loss in litigations of $960,000 and professional expenses of $200,179.
Interest expense
Interest expense totaled $682,554 during the period from January 25, 2012 (inception) to December 31, 2012, and totaled $1,345,414 during the year ended December 31, 2013. Interest expense was primarily the result of amounts accrued and debt discount amortized under notes payable.
Gain on derivative liability
Gain on derivative liability totaled $848,990 during the period from January 25, 2012 (inception) to December 31, 2012, and loss on derivative liability totaled $4,370,266 during the year ended December 31, 2013. The gain was mainly related to the decrease in fair value of the derivative liability which was the result of a decline in our stock prices.
