Quarterly report pursuant to Section 13 or 15(d)

Consolidated Condensed Statements of Cash Flows (Unaudited)

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Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (7,079,465) $ (5,807,439)
Adjustments to reconcile net loss to net cash (used in) operating activities:    
Depreciation 806,598 948
Amortization of patents and website 29,914 1,345,846
Realized loss on sale of digital currencies 5,220
Change in fair value of warrant liability (1,547,886)
Stock based compensation 457,382 183,356
Amortization of debt discount 2,290,028
Bad debt allowance 6,826
Non-cash interest, discount, and financing costs 59,607
Change in fair value of digital currency 77,073
Change in fair value of Clouding earnout (13,879)
Break-up fee - issuance of shares to GBV 2,850,000
Non-controlling interest (155,286)
Other non-cash adjustments (120,703)
Changes in operating assets and liabilities:    
Accounts receivables (21,267)
Digital currencies (861,499)
Litigation liability (2,150,000)
Bonds posted with courts (375,603)
Prepaid expenses and other assets (481,997) (289,533)
Other non current assets 1,203
Accounts payable and accrued expenses (7,345) (1,922,462)
Net cash used in operating activities (5,605,151) (7,115,212)
CASH FLOWS FROM INVESTING ACTIVITIES    
Acquisition of patents (250,000)
Purchase of property and equipment (5,254,713) (4,194)
Net cash used in investing activities (5,504,713) (4,194)
CASH FLOWS FROM FINANCING ACTIVITIES    
Payment on note payable (1,328,000)
Proceeds from sale of digital currencies 393,931
Proceeds received on issuance of notes payable 650,000
Proceeds received on private placement 3,753,063
Proceeds received on exercise of warrants 137,334
Net cash provided by financing activities 393,931 3,212,397
Effect of foreign exchange rate changes 15 4,416
Net decrease in cash and cash equivalents (10,715,918) (3,902,593)
Cash and cash equivalents - beginning of period 14,948,529 4,998,314
Cash and cash equivalents - end of period 4,232,611 1,095,721
SUPPLEMENTAL CASH FLOW INFORMATION    
Cash paid for interest expense 456,917
Cash paid during the year for income taxes 17,242
Supplemental schedule of non-cash investing and financing activities:    
Common stock issued for acquisition of patents 960,000
Conversion of Series E Preferred Stock to common stock 357
Common stock issued for note conversion 3,055,588
Restricted stock issuance 44
Revenue share liability incurred in conjunction with note payable 225,000
Warrant issued in conjunction with common stock issuance 257,957
Warrants exercised into common shares $ 55,791