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, 2016
Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (5,903,982) $ (4,665,990)
Adjustments to reconcile net loss to cash flows used in operating activities:    
Depreciation and amortization 30,248 125,070
Bad debt expense 59,750 125,522
Net gain on settlement of sub-licenses (731,973)
Termination of licensing agreement 132,804 3,639,694
Non cash interest 66,874 170,042
Amortization of debt discount 748,840 111,439
Common stock issued in connection with loan extension 17,970
Stock Based Compensation 582,348 802,920
Change in fair value of option modifications 53,858
Change in fair value of derivative liabilities 2,673,948 (97,008)
Changes in operating assets and liabilities:    
Accounts receivable (32,000) (49,772)
Prepaid expenses and other current assets (5,996) (1,020)
Accounts payable and accrued expenses (42,740) 480,702
Settlement payable 65,000 (295,000)
Deferred revenue (434,022) 433,233
Net cash (used in) provided by operating activities (1,987,100) 47,859
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of equipment (22,594)
Payment of long term deposit (12,300)
Payment for intellectual property (305,647)
Net cash used in investing activities (340,541)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from sale of common stock 100,000
Proceeds from related party notes payable 54,500
Proceeds from convertible notes payable 2,664,448 180,500
Net repayments of advances from lenders (28,000)
Repayments of notes payable (564,412) (87,919)
Net cash provided by financing activities 2,200,036 119,081
Net (decrease) increase in cash (127,605) 166,940
Cash, beginning of the period 220,060 53,120
Cash, end of period 92,455 220,060
Supplemental disclosures of cash flow information:    
Interest paid 106,333 7,418
Taxes paid
Non-cash financing activities:    
Reclassify fair value of debt derivative at payoff of note payable 262,271 158,959
Common stock issued in settlement of related party accounts payable 80,433
Common stock issued in connection with issuance of convertible notes payable 30,000
Note payable issued in settlement of sub-licensing fees 900,000
Note payable and common stock issuable to acquire intellectual property 1,132,000
Deposits applied as payment on notes payable $ 57,404