Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities:    
Net income $ (1,099,355) $ (509,642)
Adjustments to reconcile net income to net cash used in operating activities:    
Amortization of deferred financing costs 109,315  
Stock Based Compensation   50,000
Depreciation expense 109,581 31,043
Amortization of original issue discount 54,672 0
Payment in kind interest-senior debt 80,684 0
Stock Incentive expense to investor 35,186  
Changes in operating assets and liabilities:    
Accounts receivable (1,254,109) (470,684)
Other current assets (474,177) 43,337
Accounts payable and accrued liabilities 349,883 979,944
Accrued Litigation Costs 0 (110,899)
Net cash (used in) provided by operating activities (2,088,320) 13,099
Cash flows from investing activities:    
Purchases of property and equipment (14,619) (70,725)
Restricted cash account 2,252,522 0
Net cash provided by (used in) investing activities 2,237,903 (70,725)
Cash flows from financing activities:    
Payments on factor lines of credit, net 0 (184,562)
Payments on notes payable (263,838) 0
Proceeds from issuance of notes payable-related parties 96,080 (210,302)
Payments on notes payable-related parties (32,325) 600,000
Net (cash used) in provided by financing activities (200,083) 205,136
Net change in cash (50,500) 147,510
Cash, beginning of period 205,133 1,254
Cash, end of period 154,633 148,764
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash paid for interest 459,592 169,265
Non-cash financing activities:    
Notes payable issued to finance equipment purchases 164,780 195,676
Unpaid subscription for preferred shares 0 592,327
Repayment in kind of subscription receivable 0 60,000
Issuance of notes to settle accrued litigation 146,000 0
Issuance of notes to settle accounts payable 123,148 0
Preferred shares issued investor incentive 533 0
Accrued dividends, preferred stock $ 19,890 $ 19,891