Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Cash from operating activities:    
Net Loss $ (1,501,484) $ (2,804,746)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 23,752 23,088
Stock-based compensation 98,000
Stock and warrants issued for services 110,036
Amortization of discounts and premiums 65,942 485,818
Loss on conversion of notes payable included in interest expense
Amortization of stock based prepaid consulting fees 404,419
Loss related to warrants exchanged for stock 630
Warrant expense 3,062
Impairment loss 1,578,816
Changes in assets and liabilities:    
Accounts receivable 309,507 (244,846)
Costs and estimated earnings on uncompleted contracts (90,148) (134,167)
Prepaid expenses and other current assets 42,269 27,775
Accounts payable 263,975 486,787
Accounts payable-related party 6,216 (16,829)
Payroll taxes payable 36,631 (341,686)
Accrued expenses 54,430 91,680
Contingent lawsuit liability (550,000)
Billings in excess of costs and earnings on uncompleted contracts (162,446) 567,197
Deferred revenue (389,572) (355,393)
Net cash used in operating activities (1,375,845) (535,444)
Cash flows from investing activities:    
Cash acquired in acquisition 1,346
Purchase of patents/trademarks (70) (1,600)
Purchase of fixed assets (30,073) (20,196)
Net cash used in investing activities (30,143) (20,450)
Cash flows from financing activities:    
Bank overdraft 18,260
Proceeds from borrowings under convertible notes and other debt 605,965
Proceeds of borrowings under convertible notes and other debt (129,507)
Proceeds from related party notes 50,000
Repayments of related party notes (87,166)
Proceeds (repayments) of insurance and equipment financing (92,985)
Proceeds (repayments) of notes payable (140,000)
Proceeds of note payable, net of discount 1,518,000
Net cash provided by financing activities 1,266,109 476,458
Net decrease in cash (139,879) (79,436)
Cash, beginning of period 140,129 85,435
Cash, end of period 250 5,999
Supplemental Disclosure of Cash Flow Information:    
Interest paid 79,498
Taxes paid 8,469
Supplemental Non-Cash Investing and Financing Activities:    
Stock issued to convert convertible notes and accrued interest 1,415,546
Common stock issued for prepaid consulting services 301,100
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 37,120
Increase in debt discount and paid-in capital for warrants issued with debt 30,722
Note issued for financing of insurance premiums 179,024
Debt discount issued with debt 282,000
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