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 ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities    
Net loss $ (7,123,012) $ (6,764,363)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock based compensation 611,173 3,161,473
Amortization of license fees 4,412 4,412
Amortization of discount of notes payable 3,607,645 412,951
Amortization of debt issuance costs 504,090 243,821
Amortization of customer acquisition costs 189,101 81,862
Depreciation expense 75,000 $ 239,687
Gain on change in value of warrant liability (1,461,324)
Debt conversion costs 1,123,380
PIK interest 766,518 $ 160,600
Change in assets and liabilities    
Increase in accounts receivable (701,992) (484,252)
(Increase) decrease in inventory 191,099 (3,575,656)
(Increase) decrease in prepaid expenses and other assets 29,909 (3,400)
Increase in accounts payable and accrued liabilities 55,381 1,210,991
Increase (decrease) in deferred revenue $ (465,901) 3,603,840
Decrease in customer credits (201,000)
Net cash used in operating activities $ (2,594,521) (1,909,034)
Cash flows used in investing activities    
Purchase of equipment (704,831) (124,514)
Net cash used in investing activities (704,831) $ (124,514)
Cash flows from financing activities    
Payment of convertible promissory notes $ (3,000,000)
Payment of debt issuance costs $ (747,968)
Payment of equity issuance costs (45,325)
Proceeds from note payable 300,000
Payment on note payable (600,000)
Proceeds from the issuance of convertible promissory notes and related warrants 10,000,000
Proceeds from the issuance of common stock and related warrants 1,050,260
Proceeds from the issuance of common stock upon warrant exercise 7,813
Net cash provided by financing activities $ (3,000,000) 9,964,780
Net (decrease) increase in cash and cash equivalents (6,299,352) 7,931,232
Cash and cash equivalents - beginning of period 7,212,114 509,605
Cash and cash equivalents - end of period 912,762 8,440,837
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the period for - Interest 10,134 10,853
Cash paid during the period for - Taxes $ 35,930 8,037
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in accounts payable $ 229,500
Equipment purchases included in note payable $ 57,007
Accrued sales credits included in customer acquisition costs $ 970,500
Non cash debt issuance costs 1,121,500
Stock issued for interest on notes payable $ 161,580 256,487
Conversion of debt and accrued interest to equity $ 3,331,817 539,525
Conversion of accounts payable and other liabilities to equity 381,169
Conversion of accrued interest to debt $ 1,104,349 $ 603,648