Fair Value Measurement

12 Months Ended

Dec. 31, 2017

Fair Value Measurement [Abstract]

FAIR VALUE MEASUREMENT

NOTE 9 - FAIR VALUE MEASUREMENT

ASC Topic 820 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires disclosures for assets and liabilities measured at fair value based on their level in the hierarchy. Also, ASC Topic 820 provides clarification that in circumstances, in which a quoted price in an active market for the identical liabilities is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.

The standard describes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1 - Quoted prices in active markets for identical assets and liabilities.

Level 2 - Input other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The following table sets forth the liabilities at December 31, 2017 and 2016, which is recorded on the balance sheet at fair value on a recurring basis by level within the fair value hierarchy. As required, these are classified based on the lowest level of input that is significant to the fair value measurement:

			Fair Value Measurements at Reporting Date Using
	December 31, 2016		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Derivative liability – stock warrants	$	1,250,000	$	-	$	-	$	1,250,000
Fair value liability – Series C preferred stock		2,093,623		-		-		2,093,623
	$	3,343,623	$	-	$	-	$	3,343,623

In relation to the derivative liability – stock warrants, approximately $1,151,000 of the above balance is classified within liabilities held for sale with the remaining $99,000 being considered liabilities held for use.

See notes 6 and 7 for the rollforwards of derivative liability – stock warrants and fair value liability – Series C preferred stock, respectively. 

			Fair Value Measurements at Reporting Date Using
	December 31, 2017		Quoted  Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
			(Level 1)		(Level 2)		(Level 3)
Contingent liability – Verifi acquisition	$	1,957,225		-		-	$	1,957,225
Derivative liability – ALB shortfall provision		2,307,363		-		-		2,307,363
	$	4,264,588		-		-	$	4,264,588

The roll forward of the Contingent liability – Verifi acquisition is as follows:

Balance December 31, 2016	$	-
Issuance of contingent consideration in acquisition		2,220,683
Fair value adjustment		(263,458	)
Balance December 31, 2017		1,957,225

The roll forward of the derivative liability – ALB shortfall provision is as follows:

Balance December 31, 2016	$	-
Issuance of contingent consideration in acquisition		2,132,303
Fair value adjustment		175,060
Balance December 31, 2017		2,307,363

From time to time, certain assets may be recorded at fair value on a non-recurring basis. These non-recurring fair value adjustments typically are the result of impairment determinations or the initial determination of fair value of assets received and liabilities assumed upon the consummation of a business combination (see note 3). Outside of such business combination assets and liabilities, there were no assets or liabilities held for use where the carrying value of such assets or liabilities were measured at fair value on a non-recurring basis.