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 ($)
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Cash flows from operating activities    
Net loss $ (773,813) $ (7,334,518)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Stock based compensation 1,236,783 582,577
Amortization of license fees 2,940 2,942
Amortization of discount of notes payable 369,714 851,735
Amortization of debt issuance costs 76,984 334,392
Amortization of customer acquisition costs 220,816 201,758
Amortization of EERCF Patents 33,534
Depreciation expense 366,817 187,895
(Gain) loss on change in value of warrant liability (863,023) 5,352,600
Settlement Expense 61,100
PIK interest 467,892
Change in assets and liabilities    
(Increase) in accounts receivable (655,318) (3,077,407)
(Increase) decrease in inventory (299,985) 1,838,146
Decrease (increase) in prepaid expenses and other assets 3,337 (1,977)
(Decrease) increase in accounts payable and accrued liabilities (2,227,879) 3,292,440
Decrease in deferred revenue (2,241,928)
Net cash (used in) provided by operating activities (2,447,993) 456,547
Cash flows used in investing activities    
Purchase of property and equipment (586,429) (907,898)
Purchase of intellectual property (2,500,000)
Net cash used in investing activities (3,086,429) (907,898)
Cash flows from financing activities    
Payment of promissory notes (500,000)
Payments of equipment notes payable (26,434) (12,865)
Net cash used in financing activities (526,434) (12,865)
Net decrease in cash and cash equivalents (6,060,856) (464,216)
Cash and cash equivalents - beginning of period 7,751,557 1,083,280
Cash and cash equivalents - end of period 1,690,701 619,064
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the period for: Interest 681,687 98,007
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in accounts payable 101,304
Stock issued for interest on convertible notes payable 25,618 103,635
Stock issued for the acquisition of patents rights 518,000
Stock issued for settlement 61,100
Conversion of accounts receivable to customer aquistion costs 188,225
Equipment purchases included in note payable $ 103,428