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 ($)
 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ (1,452,463) $ (955,185)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:    
Change in fair value of derivative liabilities (425,790) (342)
Depreciation expense 197,625 53,908
Amortization of intangible asset 18,750 18,750
Amortization of notes payable discount 602,515 0
Amortization of license fee 0 166,667
Stock based compensation 0 149,999
Amortization of prepaid expense in connection with the issuance of common stock issued for prepaid services 164,608 53,901
Imputed interest 912 3,396
Changes in operating assets and liabilities:    
Accounts receivable (28,139) (20,361)
Inventory (99,202) (29,821)
Unbilled revenue 17,415 (34,910)
Prepaid expense 115,359 0
Other current assets (1,909) (16,710)
Accounts payable and accrued expenses 131,321 161,670
Deferred revenue (13,937) (28,891)
Net Cash (used in) operating activities (772,935) (477,929)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash acquired from acquisition 0 30,934
Purchase of property and equipment (34,967) (64,338)
Cash paid per Share Exchange Agreement 0 (375,000)
Net cash (used in) investing activities (34,967) (408,404)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from common stock and preferred stock sales 0 1,097,500
Payments on notes payable (100,834) 0
Proceeds of note payable, related party, net 57,807 (67,406)
Net cash (used in) provided by financing activities (43,027) 1,030,094
Effect of exchange rate on cash 5,849 8,172
Net increase (decrease) in cash (845,081) 151,934
Cash beginning of period 963,329 65,982
Cash end of period 118,248 217,826
SUPPLEMENTAL CASH FLOW INFORMATION    
Cash paid during the period for interest 0 0
Cash paid during the period for income tax 3,898 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 100,000 153,312
Common stock issued for payment of accounts payable 22,500 0
Preferred stock issued for settlement of debt $ 650,670 $ 175,000