Quarterly report pursuant to Section 13 or 15(d)

Consolidated Statements of Cash Flows (Unaudited)

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Cash Flows from Operating Activities          
Net loss $ (682,509) $ (1,487,359) $ (3,172,068) $ (3,546,789)  
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation     $ 103,202 93,325  
Interest expense converted into Common Stock     7,422  
Amortization of debt discount and deferred financing costs     $ 166,669 384,032  
Write-down of inventory $ 111,000 $ 111,000
Provision for bad debt     $ 10,000  
Gain from change in fair value of derivative liabilities $ (326,258) (888,011)  
Stock based compensation 36,528 $ 39,898 246,399 $ 122,126  
Changes in assets and liabilities:          
Accounts receivable     701,956 (82,384)  
Inventories     (716,095) (441,687)  
Prepaid expenses     (209,763) (211,584)  
Deposits     (703) (10,535)  
Accounts payable     310,822 89,434  
Accrued liabilities     713,089 178,118  
Net cash used in operating activities     (2,734,503) (3,307,522)  
Cash Flows from Investing Activities          
Purchase of property and equipment     (190,507) (6,185)  
Net cash used in investing activities     (190,507) $ (6,185)  
CASH FLOWS FROM FINANCING ACTIVITIES:          
Payment on stock subscription receivable     799,505  
Borrowings on line of credit, net     7,479 $ 1,349,756  
Borrowings on short term debt     755,000 $ 200,000  
Principal payments on short term debt     $ (125,750)  
Proceeds from short term debt - related parties     $ 50,000  
Payments on short term debt - related parties     $ (55,000)  
Borrowings on long-term debt     $ 100,000  
Principal payments on long term debt     (45,000) $ (60,000)  
Proceeds from issuance of convertible debt, net of discounts     $ 627,395 650,000  
Net proceeds from issuance of Common Stock and Warrants     $ 1,248,856  
Payment on investor note receivables     $ 389,211  
Net cash provided by financing activities     2,507,840 $ 3,383,612  
Net increase (decrease) in Cash and Cash Equivalents     (417,170) 69,605  
Cash and Cash Equivalents, Beginning of Year     594,508 203,534 203,534
Cash and Cash Equivalents, End of Year $ 177,338 $ 273,439 177,338 273,439 $ 594,508
Supplemental Cash Flows Information          
Interest paid     385,139 51,468  
Income taxes     $ 800 0  
NON-CASH INVESTING AND FINANCING ACTIVITIES          
Common stock and paid in capital resulting from non-cash conversions of convertible notes including interest expense and accrued interest     207,500  
Debt discount on warrants issued with convertible debt     400,000  
Debt discount on warrants issued with convertible debt - Typenex     511,460  
Contributed capital     $ 50,000  
Non-cash issuance of common stock     $ 2,570,719