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, 2017
Dec. 31, 2016
Cash flows from operating activities    
Net loss $ (2,903,273) $ (15,617,571)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Stock based compensation 1,532,013  
Amortization of license fees 1,950  
Amortization of patent rights 134,133  
Amortization of discount of notes payable 745,652  
Amortization of debt issuance costs 153,303  
Amortization of customer acquisition costs 469,870 443,450
Depreciation expense 748,020  
Deferred tax benefit 500,000  
Noncash financing expenses  
Loss on debt restructuring 14,105,076
Noncash settlement charge expenses 61,100  
PIK interest  
Change in assets and liabilities    
Decrease in accounts receivable 621,743  
(Increase) decrease in inventory (50,507)  
(Increase) in prepaid expenses and other assets (11,040)  
Increase (decrease) in accounts payable and accrued liabilities (2,568,482)  
Increase in Deferred Revenue 517,060  
(Decrease) in customer credits (423,206)  
Net cash (used in) provided by operating activities (471,664)  
Cash flows used in investing activities    
Purchase of property and equipment (806,460)  
Purchase of intellectual property (2,500,000)  
Net cash (used in) investing activities (3,306,460)  
Cash flows from financing activities    
Payment of debt issuance costs  
Payment of equity issuance costs  
Payment of equipment notes payable (55,006)  
Payments on convertible promissory note  
Payments on secured promissory note (1,500,000)  
Proceeds from the issuance of common stock  
Proceeds from the issuance of common stock upon warrant exercise  
Net cash (used in) provided by financing activities (1,555,006)  
Net (decrease) increase cash and cash equivalents (5,333,130)  
Cash and cash equivalents - beginning of year 7,751,557  
Cash and cash equivalents - end of year 2,418,427 7,751,557
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the year for: Interest 1,254,997  
Cash paid during the year for: Taxes 40,422  
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in note payable 101,199  
Stock issued for interest on notes payable  
Conversion of accounts receivable to customer acquisition costs  
Conversion of debt and accrued interest to equity 25,618  
Conversion of accrued interest to debt  
(Restated) [Member]    
Cash flows from operating activities    
Net loss   (15,617,571)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Stock based compensation   1,158,617
Amortization of license fees   5,880
Amortization of patent rights  
Amortization of discount of notes payable   1,625,808
Amortization of debt issuance costs   619,524
Amortization of customer acquisition costs   443,450
Depreciation expense   463,868
Deferred tax benefit   (500,000)
Noncash financing expenses   29,000
Loss on debt restructuring   14,105,076
Noncash settlement charge expenses  
PIK interest   584,667
Change in assets and liabilities    
Decrease in accounts receivable   (2,590,719)
(Increase) decrease in inventory   2,106,841
(Increase) in prepaid expenses and other assets   (33,624)
Increase (decrease) in accounts payable and accrued liabilities   3,106,992
Increase in Deferred Revenue  
(Decrease) in customer credits   (2,281,760)
Net cash (used in) provided by operating activities   3,226,049
Cash flows used in investing activities    
Purchase of property and equipment   (1,686,344)
Purchase of intellectual property  
Net cash (used in) investing activities   (1,686,344)
Cash flows from financing activities    
Payment of debt issuance costs   (98,671)
Payment of equity issuance costs   (1,264,009)
Payment of equipment notes payable   (31,938)
Payments on convertible promissory note   (5,000,000)
Payments on secured promissory note   (2,000,000)
Proceeds from the issuance of common stock   13,457,962
Proceeds from the issuance of common stock upon warrant exercise   65,228
Net cash (used in) provided by financing activities   5,128,572
Net (decrease) increase cash and cash equivalents   6,668,277
Cash and cash equivalents - beginning of year $ 7,751,557 1,083,280
Cash and cash equivalents - end of year   7,751,557
SUPPLEMENTAL CASH FLOW INFORMATION:    
Cash paid during the year for: Interest   578,934
Cash paid during the year for: Taxes   27,331
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS    
Equipment purchases included in note payable   103,428
Stock issued for interest on notes payable   263,200
Conversion of accounts receivable to customer acquisition costs   188,225
Conversion of debt and accrued interest to equity   1,368,927
Conversion of accrued interest to debt   $ 696,999