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, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (1,046,699) $ (1,578,318)
Adjustments to reconcile net loss to net cash used in operating activities    
Stock based compensation issued to employees 7,742 5,160
Stock based compensation - related party 45,391
Preferred share issued to CEO - related party 270,000
Depreciation expense 6,313 6,821
Amortization expense 116,885 106,986
Accretion of debt discount 186,168 315,972
Change in derivative liabilities (498,963) (247,515)
Change in warrant liabilities (139,612)
Loss on extinguishment of debt 548,425 691,371
Amortization of stock issued for future services 7,500
Estimated fair market value of stock issued for services 101,431 118,350
Changes in operating assets and liabilities:    
Accounts receivable 6,717 (63,002)
Inventory 4,745 1,863
Prepaid expenses 1,336 1,667
Accounts payable 23,107 184,617
Due to related party 182,870 96,958
Accrued compensation - related party 73,750 130,000
Deferred revenue (43,729) (29,208)
Estimated fair value of contingent payments, net (4,766) (114,632)
Other current liabilities (1,182) 13,989
Net cash used in operating activities (328,350) (183,142)
Cash flows from investing activities:    
Acquisition of intangible assets (5,502) (55,875)
Purchases of computer equipment (940)
Net cash used in investing activities (5,502) (56,815)
Cash flows from financing activities:    
Proceeds from short-term convertible notes, net of debt issuance costs 250,000
Proceeds from short-term notes, net of debt issuance costs 148,520 122,505
Repayments of short term notes (64,882)
Net cash provided by financing activities 333,638 122,505
Net decrease in cash (214) (117,452)
Cash at beginning of period 9,592 149,607
Cash at end of period 9,378 32,155
Cash paid during the period for:    
Interest
Income taxes
Non-cash investing and financing activities:    
Common stock issued for payment of accounts payable 14,985
Common stock and warrants issued in conjunction with convertible notes payable 169,066
Common stock issued to third party in conjunction with debt issuance 55,500 105,000
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