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, 2015
Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net Loss $ (9,225,580) $ (21,889,212)
Adjustments to reconcile net loss to net cash used in operating activities:    
(Gain) loss on fair market valuation of derivatives (1,800,100) $ (1,912,037)
Loss on extinguishment of debt 619,444
Amortization of debt discount 696,180
Deferred tax expense 44,000
Depreciation and amortization 645,294 $ 438,783
Warrants issued with common stock and debt $ 1,148,069 5,038,986
Stock issued for interest expense 396,555
Stock issued for compensation $ 680,630 3,027,647
Stock issued for services 1,010,112 3,714,553
Equity instruments issued with debt greater than debt carrying amount 561,000 4,808,000
Change in accounts receivable reserve 153,660 18,140
Changes in operating assets and liabilities:    
Accounts receivable (478,041) (393,700)
Prepaid expenses (65,030) (81,343)
Inventory $ (279,268) (670,180)
Note receivable 173,754
Deposits $ 50 5,422
Accounts payable 1,164,308 (528,723)
Net cash used in operations (5,125,272) (7,853,355)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Purchase of property and equipment $ (1,851,045) (2,337,370)
Purchase of intangible assets - domain names (12,440)
Net cash used in investing activities $ (1,851,045) (2,349,810)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of notes payable $ 2,150,000 7,344,737
Proceeds from issuance of notes payable to related parties 27,500
Payment on notes payable (303,474)
Payments on notes payable to related parties (130,000)
Proceeds from issuance of common stock and warrants and common stock subscribed $ 3,975,888 4,014,919
Proceeds from issuance of common stock from the exercise of warrants 293,420
Short swing profit payment 67,100
Payments by subsidiaries for non-controlling interest $ (181,295) $ (291,330)
Cash contribution from non-controlling interest 603,156
Net cash provided by financing activities 6,547,749 $ 11,022,872
NET CHANGE IN CASH AND CASH EQUIVALENTS (428,568) 819,707
CASH AND CASH EQUIVALENTS, beginning of period 846,650 26,943
CASH AND CASH EQUIVALENTS, end of period 418,082 846,650
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES    
Cash paid for interest 4,500 285,371
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES    
Warrant expense $ 1,148,069 $ 5,038,986