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 $ (5,968,167) $ (4,782,644)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock based compensation 331,189 2,693,204
Amortization of license fees 2,942 2,942
Amortization of discount of notes payable 3,192,741 138,945
Amortization of debt issuance costs 338,102 130,045
Amortization of customer acquisition costs 119,109 32,745
Depreciation expense 43,000 $ 99,496
Gain on change in value of warrant liability (1,316,729)  
Debt conversion costs 961,843  
PIK interest 539,994  
Change in assets and liabilities    
Increase in accounts receivable (252,942) $ (1,287,808)
Increase in inventory (597,173) (2,360,616)
Decrease in prepaid expenses and other assets 11,645 14,961
Increase (decrease) in accounts payable and accrued liabilities (226,830) 1,001,970
Increase in deferred revenue 227,549 2,760,028
Net cash used in operating activities (2,593,727) (1,556,732)
Cash flows used in investing activities    
Purchase of equipment (660,324) (63,082)
Net cash used in investing activities (660,324) $ (63,082)
Cash flows from financing activities    
Payment of convertible promissory notes $ (3,000,000)  
Proceeds from note payable   $ 300,000
Proceeds from the issuance of common stock and related warrants   1,004,935
Proceeds from the issuance of common stock upon warrant exercise   7,813
Net cash provided by financing activities $ (3,000,000) 1,312,748
Net decrease in cash and cash equivalents (6,254,051) (307,066)
Cash and cash equivalents - beginning of period 7,212,114 509,605
Cash and cash equivalents - end of period 958,063 202,539
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the period for - Interest 256 7,542
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in accounts payable $ 57,030 112,000
Accrued sales credits included in customer acquisition costs   970,500
Conversion of debt and accrued interest to equity $ 3,574,552 283,446
Conversion of accounts payable and other liabilities to equity   $ 381,169