Quarterly report pursuant to Section 13 or 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Net income (loss) $ 4,009,144 $ (9,284,267)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation 2,710 3,758
Amortization of patents and website 3,987,310 5,627,461
Deferred tax asset 3,547,856 (5,307,139)
Deferred tax liability (275,490) (509,207)
Impairment of intangible assets 993,890 766,498
Impairment of goodwill 83,000 0
Stock based compensation 1,062,200 1,413,724
Stock issued for services 136,000 750,334
Non-cash interest, discount, and financing costs 664,182 1,625,322
Change in fair value of Clouding earnout (167,830) (2,304,301)
Allowance for doubtful accounts 12,226  
Other non-cash adjustments (104,899) 14,980
Changes in operating assets and liabilities    
Bonds posted with courts (518,455)  
Accounts receivable (2,718) (487,328)
Prepaid expenses and other current assets 165,301 51,455
Accounts payable and accrued expenses (469,660) 2,046,662
Net cash provided by (used in) operating activities 13,124,767 (5,592,048)
Cash flows from investing activities:    
Acquisition of patents (1,150,000)  
Purchase of property, equipment and other intangible assets (6,291) (20,668)
Net cash provided by (used in) investing activities (1,156,291) (20,668)
Cash flows from financing activities:    
Payment of note payable (3,973,854)  
Payment on MdR Escrow TLI   (50,000)
Cash received upon issuance of notes payable (net of issuance costs)   19,600,000
Cash received upon exercise of warrants   18,751
Repayment of convertible notes payable   (5,050,000)
Conversion of AP to Note Payable (437,070) 705,093
Net cash provided by financing activities (7,364,703) 2,013,844
Effect of exchange rate changes on cash (145) 3,545
Net increase in cash 4,603,628 (3,595,327)
Cash at beginning of period 2,555,151 5,082,569
Cash at end of period 7,158,779 1,487,242
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash paid for: Interest expense 1,187,074 805,106
Cash paid for: Taxes paid 27,682 14,662
Cash paid for: Loan fees   400,000
Cash invested in 3DNano 115,000  
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Common stock issued in conjunction with note payable   1,000,000
Warrant issued in conjunction with note payable   318,679
Revenue share liability incurred in conjunction with note payable   1,000,000
Convertible debt warrant repricing 6,425  
Cash invested in 3DNano 115,000  
Non-cash interest increase in debt assumed in the Orthophoenix acquisition   750,000
Note payable issuance in conjunction with the acquisition of BATO patent   10,000,000
Medtech And Orthophoenix    
Cash flows from financing activities:    
Payment of note payable $ (2,953,779) (4,200,000)
Orthophoenix, LLC    
Cash flows from financing activities:    
Payment of note payable   (5,000,000)
Sarif    
Cash flows from financing activities:    
Payment of note payable   (276,250)
IP Liquidity    
Cash flows from financing activities:    
Payment of note payable   (1,109,375)
Dynamic Advances, LLC    
Cash flows from financing activities:    
Payment of note payable   $ (2,624,375)