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 ($)
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (8,419,922) $ (12,484,925)
Adjustments to reconcile net loss to net cash (used in) operating activities:    
Depreciation 1,405,147 1,248
Amortization of patents and website 48,222 1,803,264
Realized loss on sale of digital currencies 73,533
Change in fair value of warrant liability (1,593,481) 1,914,786
Impairment of intangible assets 704,678
Stock based compensation 496,435 1,523,187
Amortization of debt discount 2,290,028
Bad debt allowance 6,826
Non-cash interest, discount, and financing costs (4,397,381)
Change in fair value of Clouding earnout (768,200)
Break-up fee -issuance of shares to GBV 2,850,000
Non-controlling interest (27,435)
Other non-cash adjustments 182,024
Changes in operating assets and liabilities:    
Accounts receivables (102,098) (28,561)
Digital currencies (1,098,073)
Proceeds from sale of digital currencies 1,024,540
Litigation liability (2,150,000)
Prepaid expenses and other assets (457,329) (269,693)
Other non current assets 201,203
Accounts payable and accrued expenses (631,873) (5,262,242)
Net cash used in operating activities (6,258,045) (14,805,104)
CASH FLOWS FROM INVESTING ACTIVITIES    
Acquisition of patents (250,000)
Disposal of patents 2,771,757
Purchase of property and equipment (5,251,719) (6,291)
Net cash (used in) provided by investing activities (5,501,719) 2,765,466
CASH FLOWS FROM FINANCING ACTIVITIES    
Payment on note payable (2,741,286)
Proceeds received on issuance of notes payable 6,100,000
Proceeds received on private placement 5,158,906
Proceeds received on exercise of warrants 2,549,084
Net cash provided by financing activities 11,066,704
Effect of foreign exchange rate changes 15 16,509
Net decrease in cash and cash equivalents (11,759,749) (956,425)
Cash and cash equivalents - beginning of period 14,948,529 4,998,314
Cash and cash equivalents - end of period 3,188,780 4,041,889
SUPPLEMENTAL CASH FLOW INFORMATION    
Cash paid for interest expense 368,923
Cash paid during the year for income taxes 29,433
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 551
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