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, 2016
Dec. 31, 2015
Cash Flows from Operating Activities:    
Net Loss $ (6,059,627) $ (5,789,131)
Adjustments to reconcile net income (loss) to net cash used in operating activities:    
Stocks and warrants issued for services rendered 1,291,444 397,997
Issuance of warrants for services - related party 15,601 16,053
Warrants issued for Directors' Fees 69,713 126,679
Stocks and warrants issued for financing costs 72,000 95,580
Amortization of deferred finance costs 26,813 0
Amortization of bond discount 1,376,181 1,866,842
Depreciation expense 25,000 25,000
Changes in assets and liabilities:    
(Increase) decrease in prepaid expenses (1,096) 19,383
(Decrease) in accounts payable (448,061) (21,430)
Increase in due to related party 108,001 121,500
Increase in accrued interest 986,188 720,711
Increase (decrease) in accrued liabilities (5,630) 123,929
Net Cash (Used) in Operating Activities (2,543,473) (2,296,887)
Cash Flows from Investing Activities:    
Net Cash (Used) in Investing Activities 0 0
Cash Flow from Financing Activities:    
Proceeds (payments) from loans payable, related parties (91,130) 196,093
Deferred Finance Costs (125,000) 0
Proceeds from issuance of 11% convertible debentures 3,250,000 2,067,500
Proceeds from sale of common stock and exercise of warrants 0 48,500
Net Cash Provided by Financing Activities 3,033,870 2,312,093
Increase (Decrease) in Cash 490,397 15,206
Cash at Beginning of Period 16,589 1,383
Cash at End of Period 506,986 16,589
Cash paid during the period for:    
Interest 0 0
Income taxes $ 0 $ 0