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 from operating activities:    
Net Loss $ (5,152,477) $ (2,561,613)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 48,283 47,051
Gain on settlement of debt (64,647)
Stock and warrants issued for services 90,036
Stock issued per origination 750,000
Amortization of debt discounts 2,724,389 243,427
Amortization of stock based prepaid consulting fees 351,100
Loss related to warrants exchanged for stock 630
Initial fair value of warrant liability 735,347
Warrant derivative gain/loss (2,743,686) 264,099
Changes in assets and liabilities:    
Accounts receivable (41,315) 195,246
Costs and estimated earnings on uncompleted contracts 52,880 (55,557)
Prepaid expenses and other current assets 263,827 252,282
Accounts payable 184,829 (221,379)
Accounts payable-related party (27,538) 10,066
Payroll taxes payable (295,028) 148,261
Accrued expenses 258,307 262,535
Contingent lawsuit liability (550,000)
Billings in excess of costs and earnings on uncompleted contracts (19,215) (83,439)
Deferred revenue (236,262) (233,035)
Net cash used in operating activities (3,562,306) (1,840,290)
Cash flows from investing activities:    
Purchase of patents/trademarks (70)
Purchase of fixed assets (41,709) (35,345)
Net cash used in investing activities (41,709) (35,415)
Cash flows from financing activities:    
Proceeds from issuance of series A preferred stock 296,000
Proceeds of advance payments-stock repurchase (148,000)
Proceeds from related party notes 221,570
Proceeds from note payable 1,333,500
Proceeds from series B convertible preferred stock 1,000,000
Proceeds from common stock, net 5,777,390
Repayments of financing agreements (217,470)
Repayments of line of credit (3,506)
Repayments of related party notes (432,527) (130,818)
Repayments of insurance and equipment financing (220,800)
Repayments of notes payable (1,766,250) (155,000)
Redemption of series A convertible stock and payment of accrued dividends (319,680)
Proceeds of notes payable, net of $358,263 cash fees 2,047,000
Net cash provided by financing activities 5,371,457 1,909,952
Net increase in cash 1,767,442 34,247
Cash, beginning of period 174,376 140,129
Cash, end of period 1,941,818 174,376
Supplemental Disclosure of Cash Flow Information:    
Interest paid 126,975 245,134
Taxes paid 10,149
Supplemental Non-Cash Investing and Financing Activities:    
Common stock issued for prepaid consulting services 351,100
Common stock issued for accounts payable 215,000
Common stock issued for related party notes payable 95,000
Common stock issued for loans and convertible notes 2,424,371
Common stock issued for accrued interest and penalties 257,895
Common stock issued for accrued officer salary 700,543
Increase in debt discount and paid-in capital for warrants issued with debt 791,303
Accrued interest forgiven related to note payable settlement 20,697
Debt discount related to notes payable 1,571,250
Note issued for financing of insurance premiums 220,760 223,154
Accrued dividends $ 17,760 $ 5,920