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 $)
 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
OPERATING ACTIVITIES    
Net income (loss) $ 7,439,884 $ (476,362)
Adjustments to reconcile net income (loss) to net cash flows used in operating activities:    
Depreciation and amortization 686,671 551,427
Amortization of debt discount 589,474 67,095
Loss on equity investment 38,552 0
Gain on sale of equity investment (7,899,306) 0
Stock issued pursuant to employment agreement 42,125 0
Bad debt expense (300,000) 0
Change in operating assets and liabilities:    
Prepaid expenses and other current assets (41,933) 0
Prepaid inventory (3,841,810) 66,164
Inventory (3,131,845) (2,048,942)
Accounts receivable 789,717 (1,265,295)
Accounts payable and accrued expenses 170,866 211,514
Net cash used in operating activities (5,457,605) (2,894,399)
INVESTING ACTIVITIES    
Cash received on acquisition 0 50,775
Purchase of equipment (347,750) (201,199)
Cash paid for PhytoSPHERE agreement 0 (950,000)
Investment in Kanalife Sciences 0 (650,000)
Repayment of principal on note receivable 191,093 0
Net cash flows used in investing activities (156,657) (1,750,424)
FINANCING ACTIVITIES    
Common stock issued for cash 8,247,500 0
Proceeds from (payment of) loan from Roen Ventures (92,069) 4,780,500
Repayment of loan from related party (300) (200)
Proceeds from equipment loan, net of repayment 0 30,000
Net cash flows from financing activities 8,155,131 4,810,300
Net increase in cash 2,540,869 165,477
Cash, beginning of period 2,243,670 431
Cash, end of period 4,784,539 165,908
Supplemental disclosures of non-cash transactions:    
Value of debt discount 0 637,400
Accounts receivable assumed from acquisition 0 396,438
Inventory assumed from acquisition 0 345,477
Prepaid inventory assumed from acquisition 0 1,260,510
Property and equipment assumed from acquisition 0 1,288
Goodwill 0 1,855,512
Intangible assets acquired from acquisition 0 4,110,000
Amount due to PhytoSPHERE 0 (1,314,878)
Common shares issued for PhytoSPHERE Agreement 0 (5,755,122)
Conversion of line of credit - Roen Ventures, LLC to common stock 6,000,000 0
Conversion of accounts receivable to note receivable (600,000) 0
Common stock to be issued (175,000) 0
Common stock received in exchange for sale of investment 8,300,000 0
Supplemental cash flow disclosures:    
Interest paid 187,453 0
Taxes paid $ 56,170 $ 0