Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Cash from operating activities:    
Net Loss $ (2,092,558) $ (3,014,069)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 35,262 91,372
Gain on settlement of accounts payable 3,200
Stock and warrants issued for services 125,036 123,775
Interest expense related to premium/debt discounts and conversion of notes payable 131,884
Loss on settlement of debt 197,123
Amortization of stock based prepaid consulting fees 418,119 17,854
Loss related to warrants exchanged for stock 630
Impairment loss 1,578,816
Changes in assets and liabilities:    
Accounts receivable (274,054) (852,132)
Costs and estimated earnings on uncompleted contracts 76,686 (99,841)
Prepaid expenses and other current assets 108,347 (133,231)
Accounts payable 150,544 (123,693)
Accounts payable-related party 6,330 (20,663)
Payroll taxes payable 111,971 (285,175)
Accrued expenses 157,638 348,818
Contingent lawsuit liability (550,000)
Billings in excess of costs and earnings on uncompleted contracts 238,772 377,905
Deferred revenue (162,955) (213,298)
Net cash used in operating activities (1,518,348) (2,003,239)
Cash flows from investing activities:    
Cash acquired in acquisition 1,346
Purchase of patents/trademarks (70) (11,470)
Purchase of fixed assets (32,411) (107,401)
Net cash used in investing activities (32,481) (117,525)
Cash flows from financing activities:    
Proceeds from borrowings under convertible notes and other debt 1,374,498
Proceeds from bank line of credit 40,214
Proceeds of advance payments-stock repurchase 140,000
Proceeds from related party notes 221,570 591,697
Repayments of related party notes (97,182)
Proceeds (repayments) of insurance and equipment financing (154,621) 43,408
Repayments of notes payable (147,500)
Proceeds of notes payable 1,518,000
Net cash provided by financing activities 1,480,267 2,049,817
Net decrease in cash (70,562) (70,947)
Cash, beginning of period 140,129 85,435
Cash, end of period 69,567 14,488
Supplemental Disclosure of Cash Flow Information:    
Interest paid 125,687 33,211
Taxes paid 10,149 800
Supplemental Non-Cash Investing and Financing Activities:    
Common stock issued to settle notes payable and accrued interest 2,215,959
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 509,303 30,722
Note issued for financing of insurance premiums 198,089
Debt discount associated with notes payable 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