Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENT OF CASH FLOWS

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CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)
 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash Flows for Operating Activities:    
Net Income (Loss) $ (5,789,131) $ 680,811
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Stocks and warrants issued for services rendered 397,997 110,571
Issuance of warrants for services - related party 16,053 28,708
Warrants issued for Directors' Fees 126,679 49,600
Stocks and warrants issued for financing costs 95,580 164,107
Amortization of deferred finance costs 0 4,835
Amortization of bond discount 1,866,842 1,801,735
Depreciation expense 25,000 25,000
Abandonment of Patent Applications Pending 0 1,391,281
Fair value adjustment of derivative liability 0 (8,418,982)
Changes in assets and liabilities:    
Decrease in prepaid expenses 19,383 40,398
Decrease in miscellaneous receivables 0 118,467
Decrease in security deposits 0 845
Increase in accounts payable 100,070 744,273
Increase in accrued liabilities 844,640 522,307
Net Cash (Used) in Operating Activities (2,296,887) (2,736,046)
Cash Flows from Investing Activities:    
Net Cash (Used) in Investing Activities 0 0
Cash Flow from Financing Activities:    
Proceeds from loans payable, related parties 196,093 141,015
Finance charges paid on issuance of 11% convertible debt 0 (1,890)
Proceeds from issuance of convertible debentures 2,067,500 1,369,700
Proceeds from sale of common stock and exercise of warrants 48,500 735,500
Net Cash Provided by Financing Activities 2,312,093 2,244,325
Increase (Decrease) in Cash 15,206 (491,721)
Cash at Beginning of Period 1,383 493,104
Cash at End of Period 16,589 1,383
Cash paid during the period for:    
Interest 0 0
Income taxes $ 0 $ 0