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 ($)
 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (32,765,379) $ (7,313,666)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 19,226 42,330
Stock compensation expense 2,156,394 0
Amortization of intangible asset 16,666 0
Amortization of debt discounts 14,191,254 2,591,022
Change in fair value of warrant liability 4,249,000 16,684
Change in fair value of derivative liability 3,386,000 0
Compensation expense for issuance of consultant warrants 65,000 0
Changes in operating assets and liabilities:    
Accounts receivable 47,851 (90,806)
Inventories (123,142) (41)
Prepaid expenses and other assets (406,713) (151,551)
Accounts payable 743,437 (11,419)
Accrued liabilities 60,086 (1,047,488)
Accrued interest 5,137,140 1,262,780
Net cash used in operating activities (3,223,180) (4,702,154)
Cash flows from investing activities:    
Purchases of property and equipment (36,357) (2,095)
Net cash used in investing activities (36,357) (2,095)
Cash flows from financing activities:    
Proceeds from issuance of promissory notes 2,002,000 2,451,558
Proceeds from issuance of convertible notes payable 1,434,698 2,308,475
Repayment of convertible notes payable 0 (67,500)
Net cash provided by financing activities 3,436,698 4,692,533
Effect of exchange rate changes on cash and cash equivalents (1,060) (3,032)
Net increase (decrease) in cash and cash equivalents 176,101 (14,748)
Cash and cash equivalents as of beginning of year 249,143 [1] 92,262
Cash and cash equivalents as of end of year 425,244 77,514
Supplemental disclosure of cash flow information:    
Cash paid for income taxes 2,000 2,950
Noncash Investing and Financing Activities:    
Issuance of warrants in connection with convertible notes payable 795,000 2,356,938
Beneficial conversion feature of convertible notes payable 665,000 2,209,393
Reclassification of warrant from liability to equity 192,000 0
Issuance of convertible notes payable upon amendment of promissory notes 0 150,000
Issuance of convertible notes in lieu of employee expense payments 50,000 0
Reduction of convertible notes payable by shipment of inventories 0 277,725
Conversion of accrued interest to accounts payable 1,622 0
Conversion of interest to convertible notes payable as principal 9,045 12,518
Issuance of convertible notes payable in lieu of vendor expense payment 0 12,000
Fair value of derivative liability in connection with issuance of notes payable $ 1,558,000 $ 0
[1] The condensed consolidated balance sheet as of December 31, 2017 was derived from the audited consolidated balance sheet as of that date.