The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company incurred losses from continuing operations of $7,799,863 and $6,429,560 during the years ended December 31, 2016 and 2015, respectively. Cash used in operating activities was $6,469,560 and $6,537,708 for the years ended December 31, 2016 and 2015, respectively. During the first three months of 2017, the Company raised additional capital through the sale of convertible promissory notes to accredited investors for total gross proceeds of $1,260,000, and the sale of Series B convertible preferred stock for gross proceeds $150,000. Based upon projected revenues and expenses, the Company believes that it may not have sufficient funds to operate for the next twelve months. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company needs to raise additional capital in order to expand its business objectives. The Company funded its operations for the years ended December 31, 2016 and 2015, primarily through the sale of common stock for net proceeds of $7,097,862 and $6,331,034, respectively, and proceeds from loans payable of $68,001 and $0, respectively. During the years ended December 31, 2016 and 2015, the Company repaid debt obligations of $75,000 and $50,000, respectively (see Note 12 –Debt Obligations), and notes payable of $35,128 and $100,000, respectively (See Note 11 – Loans Payable).

The Company presently has enough cash on hand to sustain its operations on a month to month basis. Historically, the Company has been successful in raising funds to support its capital needs. Management believes that it will be successful in obtaining additional financing; however, no assurance can be provided that the Company will be able to do so. Further, there is no assurance that these funds will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail its operations and implement a plan to extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. Such a plan could have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations, liquidate and/or seek reorganization in bankruptcy. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.