Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
OPERATING ACTIVITIES    
Net (loss) income $ (5,641,426) $ 7,439,884
Adjustments to reconcile net (loss) income to net cash used in operating activities:    
Depreciation and amortization 757,722 686,671
Amortization of debt discount 91,833 589,474
Stock issued pursuant to employment agreement 0 42,125
Stock-based compensation 4,098,092 0
Stock issued for services 366,000 0
Loss on equity investment 0 38,552
Gain on sale of equity investment 0 (7,899,306)
Interest accrued on notes receivable (91,068) 0
Bad debt expense 200,000 (300,000)
Change in operating assets and liabilities:    
Prepaid expenses and other current assets 125,566 (41,933)
Prepaid inventory (5,329,644) (3,841,810)
Inventory 3,134,749 (3,131,845)
Accounts receivable (643,130) 789,717
Accounts payable and accrued expenses 7,129 170,866
Net cash used in operating activities (2,924,177) (5,457,605)
INVESTING ACTIVITIES    
Purchase of equipment (89,984) (347,750)
Note receivable from legal settlement (600,000) 0
Issuance of note receivable (2,000,000) 0
Repayment of principal on notes receivable 533,092 191,093
Net cash used in investing activities (2,156,892) (156,657)
FINANCING ACTIVITIES    
Common stock issued for cash 2,520,000 8,247,500
Proceeds from convertible debt 1,750,000 0
Convertible debt issuance costs (364,504) 0
Payment of loan from Roen Ventures 0 (92,069)
Repayment of related party loan 0 (300)
Net cash provided by financing activities 3,905,496 8,155,131
Net (decrease) increase in cash (1,175,573) 2,540,869
Cash, beginning of period 2,302,418 2,243,670
Cash, end of period 1,126,845 4,784,539
Supplemental disclosure of non-cash transactions:    
Conversion of line of credit to common stock 0 6,000,000
Conversion of accounts receivable to notes receivable 0 (600,000)
Common stock to be issued 0 (175,000)
Common stock received in exchange for sale of investment 0 8,300,000
Supplemental cash flow disclosures:    
Interest paid 0 187,453
Taxes paid $ 48,773 $ 56,170