Quarterly report pursuant to Section 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, 2018
Sep. 30, 2017
Cash flows from operating activities    
Net loss $ (4,247,976) $ (823,613)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock based compensation 437,966 1,437,648
Amortization of license fees 1,950
Amortization of discount of notes payable and convertible notes payable 523,871 558,781
Amortization of debt issuance costs 94,294 115,144
Amortization of customer acquisition costs 103,400 307,612
Amortization of patents 150,900 83,833
Depreciation expense 346,562 558,036
Loss on debt exchange 44,036
Settlement Expenses 61,100
Change in assets and liabilities    
(Increase) in accounts receivable 1,154,486 (530,382)
(Increase) decrease in inventory 191,251 (196,504)
Decrease (increase) in prepaid expenses and other assets (207,707) 24,673
(Decrease) increase in accounts payable and accrued liabilities 807,868 (2,323,642)
Decrease in customer credits (517,060) (423,206)
Net cash used in operating activities (1,118,109) (1,148,570)
Cash flows used in investing activities    
Purchase of property and equipment (130,665) (698,941)
Purchase of intellectual property (2,500,000)
Net cash used in investing activities (130,665) (3,198,941)
Cash flows from financing activities    
Payments of promissory notes (875,000) (1,000,000)
Payment of equipment notes payable (45,107) (40,318)
Proceeds from the issuance of convertible promissory notes and related warrants 200,000
Net cash used in financing activities (720,107) (1,040,318)
Net decrease in cash and cash equivalents (1,968,881) (5,387,829)
Cash and cash equivalents - beginning of period 2,418,427 7,751,557
Cash and cash equivalents - end of period 449,546 2,363,728
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the period for: Interest 1,044,193 1,011,427
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in accounts payable 1,594
Equipment purchases included in equipment notes payable 101,199
Stock issued for the acquisition of patents rights 518,000
Stock issued for settlement 61,100
Stock issued upon debt conversion 25,618
Stock issued upon cashless warrant exercise $ 230,977