Quarterly report pursuant to Section 13 or 15(d)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ (1,113,791) $ (654,601)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:    
Change in fair value of derivative liabilities (424,846) (162)
Depreciation expense 133,656 29,515
Amortization of intangible asset 12,500 12,500
Amortization of notes payable discount 602,515  
Fair value of option issued 0 111,111
Stock based compensation 0 150,000
Amortization of prepaid expense in connection with the issuance of common stock issued for prepaid services 164,608 21,304
Imputed interest 471 2,321
Changes in operating assets and liabilities:    
Accounts receivable (63,198) (44,801)
Inventory (38,004) (73,018)
Unbilled revenue 5,705 (26,917)
Prepaid expense (1,237) 0
Other current assets 1,047 (4,492)
Accounts payable and accrued expenses 31,342 203,139
Deferred revenue (16,662) (26,875)
Net Cash (used in) operating activities (705,892) (300,977)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash acquired from acquisition 0 30,934
Purchase of property and equipment (30,654) (57,716)
Cash paid per Share Exchange Agreement 0 (375,000)
Net cash (used in) investing activities (30,654) (401,782)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from common stock and preferred stock sales 0 1,097,500
Payments on notes payable (100,834) 0
Repayments of note payable, related party, net 11,571 (60,074)
Net cash (used in) provided by financing activities (89,263) 1,037,426
Net increase (decrease) in cash (828,187) 340,307
Cash beginning of period 963,329 65,982
Cash end of period 135,142 406,199
SUPPLEMENTAL CASH FLOW INFORMATION    
Cash paid during the period for interest 0 0
Cash paid during the period for income tax 0 0
NON CASH FINANCE AND INVESTING ACTIVITY    
Notes payable issued per Share Exchange Agreement 0 122,536
Common stock issued for intellectual property 0 50,000
Common stock issued for prepaid services 100,000 143,500
Preferred stock issued for settlement of debt $ 650,670 $ 175,000