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, 2015
Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (2,772,232) $ (2,362,842)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 12,187 39,731
Accretion of interest and amortization of debt discount 1,047,864 $ 393,845
Debt conversion option value in excess of debt 476,442  
Stock-based compensation expense 110,506 $ 40,384
Amortization of third party fees paid in common stock 167,936 $ 159,482
Gain on extinguishment of embedded derivative liabilities (848,073)  
Change in fair value of derivative liabilities (78,031) $ 255,406
Changes in operating assets and liabilities:    
Accounts receivable (77,936) (43,090)
Inventories 66,661 (116,543)
Prepaid expenses and other current assets 16,723 (40,909)
Accounts payable (56,302) 59,309
Accrued employee compensation (4,078) (28,987)
Deferred revenue and other accrued expenses 87,548 (112,262)
Net cash used in operating activities (1,850,785) (1,756,476)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchases of property plant and equipment (6,662) (7,139)
Net cash used in investing activities (6,662) $ (7,139)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Net proceeds from related party debt 6,300  
Payment of related party debt (12,300) $ (25,182)
Net proceeds from convertible debt 1,609,437 420,434
Payments on convertible debt (667,450) (303,100)
Net proceeds from non-convertible debt 992,128 196,250
Payments on non-convertible debt (333,641) $ (172,360)
Payment of prepayment penalty $ (172,800)  
Net proceeds from the issuance of common stock   $ 149,165
Net proceeds from the issuance of convertible preferred stock   1,476,360
Net cash provided by financing activities $ 1,421,674 1,741,567
NET DECREASE IN CASH (435,773) (22,048)
CASH AT BEGINNING OF YEAR 473,948 31,417
CASH AT END OF PERIOD 38,175 9,369
SUPPLEMENTAL INFORMATION:    
Interest paid in cash $ 203,311 $ 33,445
Income taxes paid in cash    
NON CASH FINANCING ACTIVITY:    
Convertible debt exchanged for convertible preferred stock   $ 270,000
Accrued dividends on preferred stock $ 23,479 54,593
Issuance of convertible preferred stock for interest   30,000
Issuance of convertible preferred stock for board of director and other fees   92,750
Deemed dividend on convertible preferred stock   1,388,062
Convertible debt exchanged for common stock $ 248,000 $ 87,500
Debt discount from derivative liability 1,555,739  
Extension fees added to principal 54,000  
Prepayment penalty and accrued interest enrolled into debt principal $ 48,950  
Common stock issued for preferred dividends   $ 58,268