Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows - USD ($)
 12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (9,699,318) $ (10,715,561)
Adjustments to reconcile net loss to net cash used in operating activities:    
Common stock issued for debt extension 50,108 19,500
Depreciation and amortization 94,271 8,576
Provision for bad debts
Inventory reserve 93,947 159,600
Accretion of interest and amortization of debt discount 1,517,394 4,128,637
Issuance of Incentive shares and common stock warrants 1,299,340 186,802
Gain on extinguishment of liabilities (260,454) (185,452)
Stock-based compensation expense 592,477 406,427
Warrants issued for service 15,558
Impairment loss on investment 3,182 6,069
Shares issued for services 31,000
Changes in operating assets and liabilities:    
Accounts receivable (267,982) 74,472
Inventories (56,107) (111,978)
Prepaid expenses and other assets 289,544 59,312
Accounts payable 69,593 182,014
Accrued employee compensation 88,232 119,104
Accrued interest 47,690 898,212
Deferred revenue and other accrued expenses 442,179 813,159
Net cash used in operating activities (5,695,904) (3,904,549)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of intangible assets (150,000)
Purchases of property plant and equipment (21,825)
Net cash used in investing activities (171,825)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net proceeds from related party debt 168,600
Payment of related party debt (103,600)
Net proceeds from revolving note payable 460,000 2,070,000
Net proceeds from convertible debt 5,717,798 1,755,850
Payments on convertible debt (3,522,000) (925,541)
Net proceeds from non-convertible debt 2,371,992 2,905,752
Payments on non-convertible debt (2,199,465) (1,894,231)
Net proceeds from warrant exercises 140,214
Payments on prepayment penalty (33,000)
Net proceeds from the issuance of Series AA Convertible Preferred Stock 2,824,664
Net cash provided by financing activities 5,717,989 4,019,044
NET (DECREASE) INCREASE IN CASH 22,085 (57,330)
CASH AT BEGINNING OF YEAR 81,033 138,363
CASH AT END OF YEAR 103,118 81,033
SUPPLEMENTAL INFORMATION    
Interest paid in cash 1,085,743 533,532
NON CASH TRANSACTIONS:    
Convertible debt exchanged for preferred stock 12,688,385
Discount due to beneficial conversion feature 253,000
Discount due to warrants issued with debt 162,023 714,815
Common stock issued with debt 288,648 368,574
Common stock issued to purchase intangible assets 600,000
Common stock issued in lieu of cash for interest 258,211 264,602
Common stock issued for prepaid services 238,120 15,992
Conversion of preferred stock and accrued dividends into common stock 440 61
Discount from one-time interest 209,811 225,000
Preferred stock dividend 678,921
Reclassification of derivative liabilities to equity and cumulative effect of adoption of ASU 2017-11 1,712,699
Deemed dividend-triggered down round feature 213,012
Deemed dividend-beneficial conversion feature $ 12,881,899