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 $ (2,620,274) $ (4,251,264)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities    
Stock based compensation issued to employees 7,742 16,920
Stock based compensation - related party 2,390 45,391
Preferred share issued to CEO - related party 270,000
Depreciation expense 12,698 13,712
Amortization expense 234,688 222,081
Interest expense in conjunction with debt issuance 368,778
Accretion of debt discount 340,216 415,237
Change in derivative liabilities (530,838) (86,856)
Change in warrant liabilities 181,896
Modification of warrant and derivative liabilities 238,935
Loss on extinguishment of debt 535,039 691,361
Amortization of stock issued for future services 13,750
Estimated fair market value of stock issued for services 230,521 811,301
Impairment of long-term assets 942,736
Changes in operating assets and liabilities:    
Accounts receivable 7,634 (9,730)
Inventory 2,545 (2,538)
Prepaid expenses 1,336 (15,086)
Accounts payable (138,805) 177,068
Due to related party 525,371 280,687
Accrued compensation - related party 203,750 260,000
Common stock payable 79,625
Deferred revenue (59,478) 2,635
Estimated fair value of contingent payments, net (8,932) (136,554)
Other current liabilities 11,799 26,398
Net cash used in operating activities (286,112) (400,003)
Cash flows from investing activities:    
Acquisition of intangible assets (5,502) (78,128)
Purchases of computer equipment (2,950) (940)
Net cash used in investing activities (8,452) (79,068)
Cash flows from financing activities:    
Proceeds from short-term convertible notes, net of debt issuance costs 250,000 250,005
Proceeds from short-term notes, net of debt issuance costs 155,020 149,504
Repayments of short term notes (112,551) (60,453)
Net cash provided by financing activities 292,469 339,056
Net decrease in cash (2,095) (140,015)
Cash at beginning of period 9,592 149,607
Cash at end of period 7,497 9,592
Cash paid during the period for:    
Interest
Income taxes 800
Non-cash investing and financing activities:    
Common stock issued for payment of accounts payable 205,765 14,985
Common stock and warrants issued in conjunction with convertible notes payable 169,066
Common stock issued in conjunction with notes payable 55,500 105,000
Common stock issued to third party in conjunction with debt issuance 163,171
Warrants issued to third party in conjunction with debt issuance 290,612
Embedded derivative issued in conjunction with notes payable 165,000
Reclassification of warrants to equity 1,422,459
Warrants issued to third party in conjunction with convertible notes payable 36,739
Debt issuance costs in conjunction with convertible notes payable 44,000
Deferred interest payable issued in conjunction with convertible notes payable 29,400
Reclassification of common stock payable to equity for shares issued $ 156,656