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 $ (16,883,015) $ (14,261,531)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Stock based compensation 1,158,617 789,087
Amortization of license fees 5,880 5,882
Amortization of discount of notes payable 1,625,808 4,030,201
Amortization of debt issuance costs 619,524 670,107
Amortization of customer acquisition costs 443,450 259,093
Depreciation expense 463,868 125,853
Deferred tax benefit (500,000)  
Loss on the change in value of warrant liability 14,681,311 3,194,189
Noncash financing expenses 1,125,000
Gain on debt restructuring (406,791)
Debt conversion inducement expense 1,123,380
Noncash settlement charge expenses 1,335,394
PIK interest 584,667 1,324,463
Change in assets and liabilities    
Increase in accounts receivable (2,590,719) (739,652)
Decrease in inventory 2,106,841 3,068,992
Increase in prepaid expenses and other assets (33,624) (11,513)
Increase (decrease) in accounts payable and accrued liabilities 3,106,992 (125,371)
Decrease in deferred revenue (2,281,760) (3,526,541)
Net cash provided by (used in) operating activities 3,226,049 (2,737,967)
Cash flows used in investing activities    
Purchase of property and equipment (1,686,344) (956,605)
Net cash used in investing activities (1,686,344) (956,605)
Cash flows from financing activities    
Payment of debt issuance costs (98,671) (22,688)
Payment of equity issuance costs (1,264,009)
Payments of equipment notes payable (31,938) (11,574)
Payments on convertible promissory note (5,000,000) (3,000,000)
Payments on secured promissory note (2,000,000)
Proceeds from the issuance of convertible promissory notes and related warrants 600,000
Proceeds from the issuance of common stock 13,457,962
Proceeds from the issuance of common stock upon warrant exercise 65,228
Net cash provided by (used in) financing activities 5,128,572 (2,434,262)
Net increase (decrease) in cash and cash equivalents 6,668,277 (6,128,834)
Cash and cash equivalents - beginning of year 1,083,280 7,212,114
Cash and cash equivalents - end of year 7,751,557 1,083,280
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the period for - Interest 578,934 69,489
Cash paid during the period for -Taxes 27,331 41,149
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in note payable 103,428 113,718
Non cash debt issuance costs 76,200
Non cash discounts on notes payable 168,000
Stock Issued for interest on notes payable 263,200 161,580
Conversion of accounts receivable to customer acquisition costs 188,225
Conversion of debt and accrued interest to equity 1,368,927 3,331,817
Conversion of accrued interest to debt $ 696,999 $ 1,324,463