FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 13 – FAIR VALUE MEASUREMENTS

The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value as previously defined in the summary of accounting policies and procedures.

The Company’s financial liabilities as of December 31 that are measured at fair value on a recurring basis were as follows:

	Level 1		Level 2		Level 3
2016
Derivative instruments (included in current liabilities)		—		—		18,056,631
2015
Derivative instruments (included in current liabilities)		—		—		25,445,645

We classified the derivative liability as Level 3 due to the lack of relevant observable market data over fair value inputs such as the probability-weighting of the various scenarios in the arrangement. The change in the derivative activity for the years ended December 31, 2016 and 2015 is included in Note 8 to the consolidated financial statements.

The Company’s non-financial assets and liabilities that were measured at fair value during the years ended December 31 were as follows:

	Level 1		Level 2		Level 3
2016
Property and equipment:		—		100,339		—
Current assets		311,867		—		—
Accounts paybles and other current liabilities		914,218		—		—
Inventory		112,408		—		—
Intangible assets		—		—		2,401,208
Goodwill		—		—		6,569,354
2015
Property and equipment:		—		20,000		—
Current assets		295,655		—		—
Accounts paybles and other current liabilities		909,721		—		—
Intangible assets		—		—		1,287,868
Goodwill		—		—		166,689