Quarterly report pursuant to Section 13 or 15(d)

Condensed Consolidated Statements of Cash Flows (Unaudited)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net Loss	$ (3,190,072)	$ (3,774,570)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Amortization of deferred financing costs	327,944
Change in value of term loan	313,900
Forbearance incentive expense		101,156
Depreciation expense	374,935	98,762
Amortization of original issue discount	164,018
Payment in kind interest-senior debt	246,600
Stock incentive expense to investor	35,186
Stock compensation expense to employees	172,467	473,328
Provision for bad debt		409,481
Gain on lease termination costs		(226,544)
Changes in operating assets and liabilities:
Accounts receivable	(5,578,676)	1,167,146
Other current assets	600,984	(1,316,984)
Due to related party		183,538
Accounts payable and accrued liabilities	900,568	3,819,086
Net cash (used in) provided by operating activities	(6,834,114)	934,399
Cash flows from investing activities:
Purchases of property and equipment	(308,907)	28,320
Restricted cash account	3,003,226
Net cash provided by investing activities	2,694,319	28,320
Cash flows from financing activities:
Proceeds from issuance of notes payable	2,500,000
Payments on factor line of credit, net		(383,682)
Payments on notes payable	(691,183)	(137,367)
Proceeds from issuance of notes payable-related parties	195,086
Payments on notes payable-related parties	(43,518)	(210,302)
Payment of deferred financing costs	(493,699)	(125,000)
Collection of subscription receivable	775,000	60,000
Net proceeds from sale of common stock	1,701,562
Net cash provided (used in) by financing activities	3,943,248	(796,351)
Net change in cash	(196,547)	166,368
Cash, beginning of period	205,133	41,372
Cash, end of period	8,586	207,740
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	1,083,160	256,479
Non-cash financing activities:
Notes payable issued to finance equipment purchases	794,302	1,220,305
Common stock shares issued for notes payable	898,438
Issuance of notes to settle accrued litigation	146,000	200,000
Issuance of notes to settle accounts payable	719,877	430,683
Accrued dividends, preferred stock	59,670	59,670
Cancellation of preferred shares		202
Repayment in kind of subscription receivable		(60,000)
Unpaid subscription for preferred shares		(433,883)
Preferred shares issued to settle rent obligation		50,000
Common shares issued as subscription receivable	1,357,800
Conversion of preferred shares to common shares	$ 58,425