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, 2015
Dec. 31, 2014
Cash flows from operating activities:    
Net Loss $ (2,325,950) $ (2,107,015)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 44,411 $ 55,162
Gain on settlement of accounts payable/note conversion (27,194)
Stock issued for services 58,775
Loss on settlement of debt 243,465
Amortization of stock based prepaid consulting fees 41,126
Loss related to warrants exchanged for stock $ 3,082
Common Stock issued for inducement $ 380,947
Impairment loss on intangible assets and goodwill acquired $ 1,578,816
Changes in assets and liabilities:    
Accounts receivable (134,301) $ 337,689
Costs and estimated earnings on uncompleted contracts $ (202,807) $ (23,211)
Put premium
Prepaid expenses and other current assets $ (35,526) $ (5,463)
Accounts payable (657,920) (365,547)
Accounts payable-related party $ (23,052) (7,589)
Interest from premium accretion on convertible notes 25,889
Payroll taxes payable $ (303,966) 143,226
Accrued expenses 294,117 (36,650)
Billings in excess of costs and earnings on uncompleted contracts 149,281 144,266
Contingent lawsuit payable (861,650) 409,326
Deferred revenue 42,812 63,320
Net Cash Used in Operating Activities (2,116,481) $ (985,650)
Cash flows from investing activities:    
Cash acquired in acquisition 1,346
Purchase of patents/trademarks (10,420) $ (5,500)
Purchase of fixed assets (66,162) (24,846)
Net Cash Used In Investing Activities $ (75,236) (30,346)
Cash flows from financing activities:    
Bank overdraft proceeds $ (97,491)
Proceeds from bank line of credit $ 40,216
Proceeds from related party notes 464,464
Proceeds from borrowings under convertible notes and other debt 1,730,772 $ 1,198,370
Proceeds of insurance and equipment financing 10,959 302
Net Cash Provided by Financing Activities 2,246,411 1,101,181
Net increase (decrease) in cash 54,694 85,185
Cash, beginning of year 85,435 250
Cash, end of year 140,129 85,435
Supplemental Disclosure of Cash Flow Information:    
Interest paid 59,398 52,062
Taxes paid $ 3,136 4,243
Supplemental Non-Cash Investing and Financing Activities:    
Preferred stock dividends (Note 13) $ 536,376
Common stock issued upon conversion of convertible debt $ 2,258,071  
Common stock issued to settle notes payable and accrued interest 610,802
Common stock issued to settle accounts payable 16,800
Common stock issued for accrued salary 56,482
Reclassification of put premium liability on convertible notes to paid-in capital 111,058
Increase in debt discount and paid-in capital for warrants issued with debt 30,722
Liabilities assumed in share exchange 1,186,234
Less: assets acquired in share exchange (1,347)  
Net liabilities assumed 1,184,887  
Fair value of shares exchanged 393,929  
Increase in intangible assets $ 1,578,816