trtc_10q.htm

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2017			2016
	*(Unaudited)*

ASSETS

Current Assets:
Cash	$	9,131,306		$	9,749,572
Accounts Receivable		784,071			747,792
Inventory		3,233,072			1,909,330
Prepaid Expenses		1,238,529			704,721

Total Current Assets		14,386,978			13,111,415

Property, Equipment and Leasehold Improvements, Net		10,581,265			10,464,764
Intangible Assets, Net		22,768,048			23,627,098
Goodwill		28,921,260			28,921,260
Other Assets		221,118			54,193

TOTAL ASSETS	$	76,878,669		$	76,178,730

LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Current Liabilities:
Accounts Payable and Accrued Expenses	$	3,526,498		$	2,417,400
Derivative Liabilities		3,163,000			6,987,000
Short-Term Debt		575,705			564,324
Income Taxes Payable		615,830			615,830
Contingent Consideration		–			12,085,859

Total Current Liabilities		7,881,033			22,670,413

Long-Term Liabilities:
Long-Term Debt		736,290			1,354,352

Total Long-Term Liabilities		736,290			1,354,352

Total Liabilities		8,617,323			24,024,765

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY:
Preferred Stock, Convertible Series A, Par Value $0.001: 100 Shares Authorized as of June 30, 2017 and December 31, 2016; 100 Shares Issued and Outstanding as of June 30, 2017 and December 31, 2016		–			–
Preferred Stock, Convertible Series B, Par Value $0.001: 49,999,900 Shares Authorized as of June 30, 2017 and December 31, 2016; 33,146,112 and 36,825,953 Shares Issued and Outstanding as of June 30, 2017 and December 31, 2016, respectively		33,146			36,826
Common Stock, Par Value $0.001: 990,000,000 Shares Authorized as of June 30, 2017 and December 31, 2016; 618,667,265 and 553,863,812 Shares Issued and Outstanding as of June 30, 2017 and December 31, 2016, respectively		618,667			553,864
Additional Paid-In Capital		152,354,775			124,915,182
Accumulated Deficit		(83,436,756	)		(72,870,999	)

Total Terra Tech Corp. Stockholders’ Equity		69,569,832			52,634,873
Non-Controlling Interest		(1,308,486	)		(480,908	)

Total Stockholders’ Equity		68,261,346			52,153,965

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	76,878,669		$	76,178,730

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016

Total Revenues	$	7,842,873		$	9,699,909		$	14,667,329		$	11,248,076
Cost of Goods Sold		6,336,500			8,152,935			12,801,893			9,686,575

Gross Profit		1,506,373			1,546,974			1,865,436			1,561,501

Selling, General and Administrative Expenses		6,029,287			5,364,351			12,415,587			7,291,252

Loss from Operations		(4,522,914	)		(3,817,377	)		(10,550,151	)		(5,729,751	)

Other Income (Expense):
Amortization of Debt Discount		(515,654	)		(218,126	)		(1,126,270	)		(312,532	)
Loss on Extinguishment of Debt		(1,639,137	)		–			(2,678,595	)		(920,797	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			(488,000	)		–			(488,000	)
Gain (Loss) on Fair Market Valuation of Derivatives		987,200			(206,000	)		2,597,950			(1,366,700	)
Interest Expense		(130,510	)		(60,565	)		(288,343	)		(116,560	)
Loss on Fair Market Valuation of Contingent Consideration		(77,286	)		–			(4,426,047	)		–
Gain on Settlement of Contingent Consideration		4,991,571			–			4,991,571			–

Total Other Income (Expense)		3,616,184			(972,691	)		(929,734	)		(3,204,589	)

Loss Before Provision for Income Taxes		(906,730	)		(4,790,068	)		(11,479,885	)		(8,934,340	)
Provision for Income Taxes		–			381,000			–			381,000

NET LOSS		(906,730	)		(5,171,068	)		(11,479,885	)		(9,315,340	)

Net Loss Attributable to Non-Controlling Interests		452,961			236,830			914,128			255,038

NET LOSS ATTRIBUTABLE TO TERRA TECH CORP.	$	(453,769	)	$	(4,934,238	)	$	(10,565,757	)	$	(9,060,302	)

Net Loss Per Common Share Attributable to Terra Tech Corp. Common Stockholders – Basic and Diluted	$	–		$	(0.01	)	$	(0.02	)	$	(0.03	)

Weighted-Average Number of Common Shares Outstanding – Basic and Diluted		583,096,376			349,893,516			575,249,192			338,187,946

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Six Months Ended

June 30,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss

$ (11,479,885 )

$ (9,315,340 )

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

(Gain) Loss on Fair Market Valuation of Derivatives

(2,597,950 )

1,366,700

Loss on Fair Market Valuation of Contingent Consideration

4,426,047

–

Gain on Settlement of Contingent Consideration

(4,991,571 )

–

Loss on Extinguishment of Debt

2,678,595

920,797

Amortization of Debt Discount

1,126,270

312,532

Deferred Tax Expense

–

49,000

Depreciation and Amortization

1,778,782

787,178

Warrants Issued with Common Stock and Debt

211,534

–

Stock Issued for Compensation

1,356,138

–

Stock Issued for Director Fees

221,973

60,550

Stock Issued for Services

591,359

20,727

Stock Option Expense

205,019

95,177

Equity Instruments Issued with Debt Greater than Debt Carrying Value

–

488,000

Change in Allowance for Doubtful Accounts

–

102,253

Changes in Operating Assets and Liabilities:

Accounts Receivable

(36,279 )

(369,557 )

Inventory

(1,323,742 )

(472,970 )

Prepaid Expenses

(533,808 )

257,238

Other Assets

(166,925 )

–

Accounts Payable and Accrued Expenses

1,383,860

2,393,183

NET CASH USED IN OPERATING ACTIVITIES

(7,150,583 )

(3,304,532 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash Assumed in Acquisition

–

163,566

Purchase of Property, Equipment and Leasehold Improvements

(1,036,233 )

(1,988,587 )

Purchase of Intangible Assets – Domain Names

–

(75,000 )

NET CASH USED IN INVESTING ACTIVITIES

(1,036,233 )

(1,900,021 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Issuance of Notes Payable

6,000,000

3,250,000

Cash Paid for Debt Discount

(180,000 )

–

Proceeds from Issuance of Common Stock

3,750,000

3,208,134

Payment of Contingent Consideration

(2,088,000 )

–

Cash Contribution from Non-Controlling Interest

86,550

–

NET CASH PROVIDED BY FINANCING ACTIVITIES

7,568,550

6,458,134

NET CHANGE IN CASH

(618,266 )

1,253,581

Cash at Beginning of Period

9,749,572

418,082

CASH AT END OF PERIOD

$ 9,131,306

$ 1,671,663

SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:

Cash Paid for Interest

$ –

$ 10,100

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Settlement of Contingent Consideration

$ 4,739,638

$ –

Gain on Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital

$ 4,692,697

$ –

Fair Value of Debt Discount Recorded

$ 4,446,000

$ 2,824,000

Issuance of Common Stock for Debt and Interest Expense

$ 8,564,324

$ –

The accompanying notes are an integral part of the unaudited consolidated financial statements.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

NOTE 1 – DESCRIPTION OF BUSINESS

Organization

References in the Notes to Unaudited Consolidated Financial Statements to “the Company”, “Terra Tech”, “we”, “us”, or “our” are intended to mean Terra Tech Corp., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis.

Through MediFarm, LLC, a Nevada limited liability company (“MediFarm”), MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”), and MediFarm II, LLC, a Nevada limited liability company (“MediFarm II”), subsidiaries in which the Company owns interests, the Company operates and/or plans to operate medical marijuana dispensary facilities, cultivation, and production facilities in Nevada. Through IVXX, LLC, a Nevada limited liability company (“IVXX LLC”), and IVXX, Inc., a California corporation (“IVXX Inc.”; together with IVXX LLC, “IVXX”), the Company’s wholly-owned subsidiary, the Company produces and sells a line of cannabis flowers, as well as a line of cannabis pure concentrates. Most recently, the Company formed another subsidiary, MediFarm I Real Estate, LLC, a Nevada limited liability company (“MediFarm I RE”), which owns the real property on which a medical marijuana dispensary will be constructed. The dispensary will be operated by MediFarm I. Through Black Oak Gallery, a California corporation (“Black Oak”), we operate a medical marijuana retail dispensary, a medical marijuana cultivation facility, and have a second medical marijuana cultivation facility in the early stages of construction, all in Oakland, California. The Company is a wholesale seller of locally grown hydroponic produce, herbs and floral products through its wholly-owned subsidiary, Edible Garden Corp., a Nevada corporation (“Edible Garden”).

On April 1, 2016, the Company acquired Black Oak. Black Oak operates a medical marijuana retail dispensary in Oakland, California under the name Blüm, pursuant to that certain Agreement and Plan of Merger, dated December 23, 2015 (the “Merger Agreement”), with Generic Merger Sub, Inc., a California corporation and our wholly-owned subsidiary, and Black Oak.

Since the Merger was completed on April 1, 2016, Black Oak’s financial results are included in our unaudited consolidated financial statements subsequent to that date.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.

The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Terra Tech’s annual report on Form 10-K for the year ended December 31, 2016.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Non-Controlling Interest

Non-controlling interest is shown as a component of shareholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations.

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss and shareholders’ equity.

Inventory

We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its current estimated net realizable value (“NRV”). ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, defines NRV as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods.

Prepaid Expenses

Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance and service contracts requiring up-front payments.

Property, Equipment and Leasehold Improvements

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: 32 years for buildings; three to eight years for furniture and equipment; and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred.

Goodwill

Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized for accounting purposes.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

We review the goodwill allocated to each of our reporting units for possible impairment annually as of August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit.

Intangibles

Intangible assets are stated at historical cost and amortized over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows:

Customer Relationships		5 to 12 Years
Trade Names		2 to 8 Years
Dispensary License		14 Years
Patent		2 Years

We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Intangible assets that have indefinite useful lives are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value.

Impairment of Long-Lived Assets

We have adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification (“ASC”) for our long-lived assets. Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

Other Assets

Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

We recognize revenue in accordance with ASC 605, “Revenue Recognition”, by recognizing as revenue the fees we charge customers because persuasive evidence of an arrangement exists, the fees we charge are substantially fixed or determinable during the period that we provide the goods or services, we and our customers understand the specific nature and terms of the agreed upon transactions, and payment is made for the goods or services when they have been rendered.

Cannabis Dispensary, Cultivation and Production

We recognize revenue from manufacturing and distribution product sales and upon transfer of title and risk to the customer, which occurs either at shipping (F.O.B. terms), or upon sell through, depending on the arrangement.

Revenue from our retail dispensaries is recognized net of discounts, rebates, promotional adjustments, price adjustments and returns, and net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Revenue is recorded upon transfer of title and risk to the customer, which occurs at the time customers take delivery of our products at our retail dispensaries. Upon purchase, we have no further performance obligations and collection is assured as sales are paid for at time of purchase.

Revenue related to the sale of consignment inventory is not recognized until the product is pulled from inventory and sold directly to end-customers. We recognize revenue from the sale of consignment inventory on a gross basis, as we have determined that: 1) we are the primary obligor to the customer; 2) we have latitude in establishing the sales prices and profit margins of our products; 3) we have discretion in selecting our suppliers; 4) we are responsible for loss or damage to consigned inventory; and 5) our customer validation process performs an important part of the process of providing such products to authorized customers. We believe that these factors outweigh the fact that we do not have title to the consigned inventory prior to its sale.

Herbs and Produce Products

We recognize revenue from products grown in our greenhouses and sold net of discounts, rebates, promotional adjustments, price adjustments, and estimated returns and upon transfer of title and risk to the customer, which occurs at shipping (F.O.B. terms). Upon shipment, we have no further performance obligations, selling price is fixed, and collection is reasonably assured.

Cost of Goods Sold

Cannabis Dispensary, Cultivation and Production

Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, other expenses for services, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. It also includes the cost incurred in producing the oils, waxes, shatters, and clears sold by IVXX.

Herbs and Produce Products

Cost of goods sold are for the plants grown, packaging, other supplies and purchased plants that are sold into the retail marketplace by Edible Garden. Other expenses include freight, allocations of rent, repairs and maintenance, and utilities.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation

The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, “Compensation”, which requires fair value measurement on the grant date and recognition of compensation expense for all share-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations.

Warrants

ASC 815-40, “Contracts in Entity’s Own Equity”, requires freestanding contracts that are settled in a company’s own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of ASC 815-40, a contract designated as an asset or a liability must be carried at fair value on a company’s balance sheet, with any changes in fair value recorded in the company’s results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments are required from period to period.

ASC 815, “Derivatives and Hedging”, requires all derivatives to be recorded on the balance sheet at fair value. Furthermore, ASC 815 precludes contracts issued or held by a reporting entity that are both (1) indexed to its own stock and (2) classified as stockholders’ equity in its statement of financial position from being treated as derivative instruments.

Research and Development

Research and development costs are expensed as incurred.

Income Taxes

We provide for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2017 and December 31, 2016, such net operating losses were offset entirely by a valuation allowance.

The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.

Loss Per Common Share

In accordance with the provisions of ASC 260, “Earnings Per Share”, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2017 and 2016. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for both periods.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Fair Value of Financial Instruments

We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. We have not elected the fair value option for any eligible financial instruments.

Recently Issued Accounting Standards

FASB ASU 2017-04 (Topic 350), “Intangibles - Goodwill and Others” – Issued in January 2017, ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. We are currently evaluating the effect that ASU 2017-04 will have on our consolidated financial statements and related disclosures.

FASB ASU 2017-01 (Topic 805), “Business Combinations: Clarifying the Definition of a Business” – Issued in January 2017, ASU 2017-01 revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on our consolidated financial statements.

FASB ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force)” – Issued in August 2016, the amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, “Statement of Cash Flows”. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company has not yet completed the analysis of how adopting this guidance will affect its consolidated financial statements.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

FASB ASU No. 2016-02 (Topic 842), “Leases” – Issued in February 2016, ASU No. 2016-02 will require entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new standard also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new standard will be effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.

FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers” – Issued in May 2014, ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. This amendment defers the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016- 08, “Principal versus Agent Considerations (Reporting Gross versus Net)”, which amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” and 2016-12, “Narrow-Scope Improvements and Practical Expedients”, both of which provide additional clarification of certain provisions in Topic 606. These ASC updates are effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. Early adoption is permitted only as of annual reporting periods after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently in the process of evaluating all revenue streams, accounting policies, practices and reporting to identify and understand any impact on our consolidated financial statements.

NOTE 3 – CONCENTRATIONS OF BUSINESS AND CREDIT RISK

The Company maintains cash balances in several financial institutions that are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations.

The Company provides credit in the normal course of business to customers located throughout the U.S. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

NOTE 4 – INVENTORY

Raw materials consist of Edible Garden’s herb product lines and material for IVXX’s line of cannabis pure concentrates. Work-in-progress consists of live plants grown for Edible Garden’s herb product lines and live plants grown at Black Oak. Finished goods consists of IVXX’s line of cannabis packaged products to be sold into dispensaries, and Edible Garden’s products to be sold via food, drug, and mass channels.

Cost of goods sold is calculated using the average costing method. The Company reviews its inventory periodically to determine NRV. The Company writes down inventory, if required, based on forecasted demand. These factors are impacted by market and economic conditions, new products introductions, and require estimates that may include uncertain elements.

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NOTE 4 – INVENTORY (Continued)

As of June 30, 2017 and December 31, 2016, inventory consisted of the following:

	June 30, 2017		December 31, 2016

Raw Materials	$	1,010,401	$	486,119
Work-in-Progress		1,179,647		570,145
Finished Goods		1,043,024		853,066

Total Inventory	$	3,233,072	$	1,909,330

NOTE 5 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

As of June 30, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following:

	June 30, 2017			December 31, 2016

Land and Building	$	1,454,124		$	1,454,124
Furniture and Equipment		3,376,758			3,141,244
Computer Hardware and Software		438,210			396,479
Leasehold Improvements		8,458,734			7,568,465
Construction in Progress		297,041			459,327

Subtotal		14,024,867			13,019,639
Less Accumulated Depreciation		(3,443,602	)		(2,554,875	)

Property, Equipment and Leasehold Improvements, Net	$	10,581,265		$	10,464,764

Depreciation expense related to property, equipment and leasehold improvements for the three months ended June 30, 2017 and 2016 was $456,659 and $222,939, respectively, and for the six months ended June 30, 2017 and 2016 was $919,732 and $373,668, respectively.

NOTE 6 – INTANGIBLE ASSETS

As of June 30, 2017 and December 31, 2016, intangible assets consisted of the following:

		June 30, 2017							December 31, 2016
	Estimated Useful Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value

Amortized Intangible Assets:
Customer Relationships	5 to 12	$	8,960,700	$	(1,218,528	)	$	7,742,172	$	8,960,700	$	(780,960	)	$	8,179,740
Trade Brands and Patent	2 to 8		498,598		(145,757	)		352,841		498,598		(91,061	)		407,537
Dispensary License	14		10,270,000		(916,965	)		9,353,035		10,270,000		(550,179	)		9,719,821

Total Amortized Intangible Assets			19,729,298		(2,281,250	)		17,448,048		19,729,298		(1,422,200	)		18,307,098

Unamortized Intangible Assets:
Trade Name	Indefinite		5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Unamortized Intangible Assets			5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Intangible Assets		$	25,049,298	$	(2,281,250	)	$	22,768,048	$	25,049,298	$	(1,422,200	)	$	23,627,098

Intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $429,525 and $516,878 for the three months ended June 30, 2017 and 2016, respectively, and $859,050 and $527,498 for the six months ended June 30, 2017 and 2016, respectively.

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NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of June 30, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following:

	June 30, 2017		December 31, 2016

Accounts Payable	$	1,742,666	$	1,986,907
Sales Tax Payable		360,176		122,470
Accrued Interest Payable		110,217		96,633
Accrued Expenses		1,313,439		211,390

Total Accounts Payable and Accrued Expenses	$	3,526,498	$	2,417,400

NOTE 8 – NOTES PAYABLE

As of June 30, 2017 and December 31, 2016, notes payable consisted of the following:

	June 30, 2017		December 31, 2016

Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. The remaining balance of the note and accrued interest was converted into common stock in April 2017.	$	–	$	64,324
Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment.		500,000		500,000
Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. The remaining balance of the note and accrued interest was converted into common stock in January 2017.		–		102,582
Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment.		75,705		31,615
Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment.		–		1,220,155
Senior convertible promissory note dated June 23, 2017, issued to accredited investors, which matures December 23, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.1362, subject to adjustment.		736,290		–

Total Debt		1,311,995		1,918,676

Less Short-Term Portion		575,705		564,324

Long-Term Portion	$	736,290	$	1,354,352

As of June 30, 2017 and December 31, 2016, total debt was $1,311,995 and $1,918,676, respectively, which included unamortized debt discount of $2,338,005 and $4,295,648, respectively. Senior secured promissory notes are secured by shares of common stock. There was accrued interest payable of $110,217 and $96,633 as of June 30, 2017 and December 31, 2016, respectively.

See “Note 16 – Subsequent Events” for additional disclosure regarding changes in notes payable subsequent to June 30, 2017.

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NOTE 8 – NOTES PAYABLE (Continued)

Securities Purchase Agreement Dated June 23, 2017 and 12% Senior Convertible Promissory Note Due December 23, 2018

On June 23, 2017, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company sold to the accredited investor a 12% Senior Convertible Promissory Note due December 23, 2018 (“Note A”) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (“Offering A”). There were no fees or expenses deducted from the net proceeds received by the Company in Offering A. Note A and the shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) issuable upon conversion of Note A are collectively referred to herein as the “Securities.”

All principal and interest due and owing under Note A is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.1362 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (“Conversion Price A”), which Conversion Price A is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price of Note A will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.

In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) day’s notice, that the holder convert Note A at Conversion Price A.

The Company may prepay in cash any portion of the outstanding principal amount of Note A and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note A; (ii) 115% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note A; or (iii) 125% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note A.

Securities Purchase Agreement Dated February 22, 2017 and 12% Senior Convertible Promissory Note Due August 22, 2018

On February 22, 2017, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company sold to the accredited investor a 12% Senior Convertible Promissory Note due August 22, 2018 (“Note B”) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (“Offering B”). There were no fees or expenses deducted from the net proceeds received by the Company in Offering B. Note B and the shares of the Common Stock issuable upon conversion of Note B are collectively referred to herein as the “Securities.”

All principal and interest due and owing under Note B is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (“Conversion Price B”), which Conversion Price B is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price of Note B will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. All interest payments under the Note are payable, at the Company’s option, in cash or shares of Common Stock.

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NOTE 8 – NOTES PAYABLE (Continued)

The Company may prepay in cash any portion of the outstanding principal amount of Note B and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note B; (ii) 115% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note B; or (iii) 125% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note B.

NOTE 9 – CONTINGENT CONSIDERATION LIABILITY

The Company accounts for “contingent consideration” according to FASB ASC 805, “Business Combinations”. Contingent consideration typically represents the acquirer’s obligation to transfer additional assets or equity interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent consideration be recognized at the acquisition-date fair value as part of the consideration transferred in the transaction.

In the acquisition of Black Oak, the Company valued the contingent consideration based on an analysis using a cash flow model to determine the expected contingent consideration payment, which model determined that the aggregate expected contingent consideration liability was $15,305,463 and the present value of the contingent consideration liability was $12,754,553. Accordingly, the Company recognized at April 1, 2016, the closing date of the Black Oak merger, a $12,754,553 contingent consideration liability associated with the contingent consideration paid pursuant to the Merger Agreement.

On April 1, 2017, the anniversary date of the acquisition and the settlement date of the contingent consideration, the final contingent consideration was approximately $16.5 million. A summary of the changes in the contingent consideration as well as the detail is below:

Amount

Contingent Consideration Summary

Balance at December 31, 2016

$ 12,085,859

Change in Fair Market Valuation of Contingent Consideration

4,348,761

Balance at March 31, 2017 and April 1, 2017

$ 16,434,620

Contingent Consideration Detail

Performance-Based Cash Contingent Consideration

$ 2,088,000

Market-Based Stock Contingent Consideration

14,346,620

$ 16,434,620

Changes in the fair market valuation of the contingent consideration are recognized in the consolidated statements of operations. For the three and six months ended June 30, 2017, the loss on fair market valuation of contingent consideration was $77,286, and $4,426,047, respectively.

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NOTE 9 – CONTINGENT CONSIDERATION LIABILITY (Continued)

During April 2017, in final settlement of the contingent consideration, the Company issued approximately $4.7 million in shares of its common stock, or common stock equivalent of approximately 18.1 million shares of its common stock, and made a cash payment of approximately $2.1 million. A summary is as follows:

Contingent Consideration Balance at March 31, 2017

$ 16,434,620

Change in Fair Market Valuation of Contingent Consideration

77,286

Payment of Contingent Consideration in Cash

(2,088,000 )

Settlement of Contingent Consideration

(4,739,638 )

Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital

(4,692,697 )

Gain on Settlement of Contingent Consideration

(4,991,571 )

Contingent Consideration Balance at June 30, 2017

$ –

Pursuant to the terms of the contingent consideration as outlined in the Merger Agreement, the Company was required to release from escrow shares worth approximately $14.4 million. Of those shares, 18.1 million shares, with a value of $4,789,638, were issued in final settlement of the Market-Based Contingent Consideration, and approximately 34.2 million shares were additionally clawed-back. The Market-Based Clawback associated with common stock equivalent of approximately 35.1 million shares were clawed-back pursuant to the appreciation of the quoted price of the Company’s stock underlying the market-based component of the contingent consideration. An additional common stock equivalent of approximately 34.2 million shares, with a value of $9,684,268, were clawed-back pursuant to disputes between the sellers of Black Oak and the Company with respect to certain operational and performance goals that would have impacted the appreciation of the quoted price of the Company’s common stock underlying the market-based component of the contingent consideration and, in effect, increasing the number of clawback shares. For the three and six months ended June 30, 2017, the Company recognized a gain on settlement of contingent consideration of $4,991,571. The balance attributable to related parties was recorded in additional paid in capital.

See “Note 10 – Fair Value Measurements” for further information.

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NOTE 10 – FAIR VALUE MEASUREMENTS

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:

Fair Value at

June 30,

Fair Value Measurement Using

Description

2017

Level 1

Level 2

Level 3

Derivative Liabilities – Conversion Feature

$ 3,163,000

$ –

$ –

$ 3,163,000

$ 3,163,000

$ –

$ –

$ 3,163,000

	Fair Value at December 31,			Fair Value Measurement Using
Description	2016			Level 1	Level 2		Level 3

Derivative Liabilities – Conversion Feature	$	6,987,000	$	–	$	–	$	6,987,000
Liability – Contingent Consideration	$	12,085,859		–		–		12,085,859

	$	19,072,859	$	–	$	–	$	19,072,859

No financial assets were measured on a recurring basis as of June 30, 2017 and December 31, 2016.

The following table presents a reconciliation of the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017:

Balance at December 31, 2016	$	6,987,000

Change in Fair Market Value of Conversion Feature		(2,597,950	)
Derivative Debt Converted into Equity		(5,672,050	)
Issuance of Debt Instruments with Derivatives		4,446,000

Balance at June 30, 2017	$	3,163,000

The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017:

Balance at December 31, 2016	$	12,085,859

Change in Fair Market Valuation of Contingent Consideration		4,426,047
Payment of Contingent Consideration in Cash		(2,088,000	)
Settlement of Contingent Consideration		(4,739,638	)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital		(4,692,697	)
Gain on Settlement of Contingent Consideration		(4,991,571	)

Balance at June 30, 2017	$	–

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

Non-financial assets, such as property, equipment and leasehold improvements, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets during the three and six months ended June 30, 2017 and 2016.

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NOTE 11 – INCOME TAXES

For the three and six months ended June 30, 2017 and 2016, the Company had no income tax expense (benefit).

As of June 30, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following:

	June 30, 2017			December 31, 2016

Deferred Income Tax Assets:
Warrants Expense	$	4,832,000		$	4,186,000
Derivatives Expense		6,443,000			4,067,000
Net Operating Losses		19,105,000			15,242,000

Deferred Income Tax Liabilities:
Depreciation		(1,818,000	)		(1,334,000	)

Total		28,562,000			22,161,000
Valuation Allowance		(28,562,000	)		(22,161,000	)

Net Deferred Tax Liabilities	$	–		$	–

For the three and six months ended June 30, 2017 and 2016, certain of the Company’s subsidiaries produced and sold cannabis or cannabis pure concentrates, subjecting the Company to the limits of IRC Section 280E. Pursuant to IRC Section 280E, the Company is allowed only to deduct expenses directly related to sales of product.

Permanent differences include ordinary and necessary business expenses deemed by the Company as a non-allowable deduction under IRC Section 280E, and tax deductions related to equity compensation that are less than the compensation recognized for financial reporting.

As of June 30, 2017 and December 31, 2016, the Company had net operating loss carryforwards of $42,623,000 and $34,940,000, respectively, which, if unused, will expire beginning in the year 2034. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under Internal Revenue Code (“IRC”) Section 382, which will limit their utilization. The Company has yet to assess the effect of these limitations, but expects these losses to be substantially limited. Accordingly, the Company has placed a reserve against any assets associated with these losses.

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2012 to 2015 are subject to examination.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred through the period ended June 30, 2017. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of June 30, 2017, a valuation allowance has been recorded against all deferred tax assets as these assets are more likely than not to be unrealized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

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NOTE 12 – EQUITY

Preferred Stock

Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Company’s common stock.

Each share of Series B Preferred Stock: (i) is entitled to 100 votes for each share of common stock into which a share of Series B Preferred Stock is convertible and (ii) is convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of the Company’s common stock.

See “Note 16 – Subsequent Events” for additional disclosure regarding changes to the Company’s Series B Preferred Stock subsequent to June 30, 2017.

During the six months ended June 30, 2017, the Company issued 600,000 shares of Series B Preferred Stock for compensation in the amount of $1,035,406.

During the six months ended June 30, 2017, the Company cancelled 4,279,841 shares of Series B Preferred Stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See “Note 9 – Contingent Consideration Liability” for further information.

Common Stock

During the six months ended June 30, 2017, senior secured convertible promissory notes and accrued interest in the amount of $8,839,084 were converted into 50,710,473 shares of common stock.

During the six months ended June 30, 2017, the Company issued 17,674,027 shares of common stock for cash in the amount of $3,750,000 pursuant to an equity financing facility with an accredited investor.

During the six months ended June 30, 2017, the Company issued 1,215,909 shares of common stock for director fees in the amount of $221,973, issued 2,859,005 shares of common stock for services performed in the amount of $591,359 and issued 1,635,780 shares of common stock for compensation in the amount of $320,732.

During the six months ended June 30, 2017, the Company cancelled 9,291,744 shares of common stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See “Note 9 – Contingent Consideration Liability” for further information.

During the six months ended June 30, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock.

During the six months ended June 30, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor.

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NOTE 12 – EQUITY (Continued)

Stock-Based Compensation Expense

A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:

For the Three Months Ended

June 30, 2017

June 30, 2016

Type of Award

Number of Shares or Options Granted

Stock-Based Compensation Expense

Number of Shares or Options Granted

Stock-Based Compensation Expense

Stock Options

8,250,000

157,430

–

47,589

Stock Grants:

Employees (Common Stock)

1,535,780

294,632

–

Employees (Series B Preferred Stock)

–

Directors (Common Stock)

1,090,909

184,473

–

Non–Employee Consultants (Common Stock)

2,391,358

446,348

–

Total Stock-Based Compensation

13,268,047

1,082,883

–

47,589

A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:

	For the Six Months Ended
	June 30, 2017				June 30, 2016
Type of Award	Number of Shares or Options Granted		Stock-Based Compensation Expense		Number of Shares or Options Granted		Stock-Based Compensation Expense

Stock Options		8,250,000	$	205,019		6,700,000	$	95,178

Stock Grants:
Employees (Common Stock)		1,635,780		320,732		–		–
Employees (Series B Preferred Stock)		600,000		1,035,406		–		–
Directors (Common Stock)		1,215,909		221,973		350,000		60,550
Non–Employee Consultants (Common Stock)		2,859,005		591,359		70,000		20,727

Total Stock–Based Compensation		14,560,694	$	2,374,489		7,120,000	$	176,455

NOTE 13 – COMMITMENTS

Operating Lease Commitments

The Company leases certain business facilities under operating lease agreements that specify minimum rentals. Many of these have renewal provisions. The Company’s net rent expense for the three months ended June 30, 2017 and 2016 was $312,254 and $298,092, respectively, and for the six months ended June 30, 2017 and 2016 was $627,067 and $431,959, respectively.

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NOTE 13 – COMMITMENTS (Continued)

Production Operating Agreement

On May 23, 2017, the Company entered into a one-year operating agreement with Panther Gap Farms pursuant to which Panther Gap Farms will grow up to approximately one metric ton of the Company’s IVXX cannabis annually. The operating agreement is renewable for up to three additional terms of one year each. The agreement also requires the Company to issue common stock, with a value of $1,150,000, upon execution of the agreement, which the Company had not issued as of June 30, 2017. In addition to the common stock, the Company is required to issue common stock for the profit share of the cannabis ultimately sold by the Company upon execution of the agreement. The shares to be received by Panther Gap Farms under the profit share agreement are dependent on the ultimate profit recognized by the Company when the cannabis product is sold. As of June 30, 2017, the Company has not issued the required shares.

The Company and Panther Gap Farms also entered into a lease agreement pursuant to which the Company leases the property on which the cannabis is grown. The lease agreement requires monthly payments of $30,000 for eight months and is also renewable for up to three additional terms of one year each.

NOTE 14 – SEGMENT INFORMATION

The Company’s operating and reportable segments are currently organized around the following products that it offers as part of its core business strategy:

· Herbs and Produce Products – Includes herbs and leafy greens that are grown using classic Dutch hydroponic farming methods.

· Cannabis Dispensary, Cultivation and Production – Includes cannabis-focused retail, cultivation and production.

These two reportable segments, which are described in greater detail below, had previously been reported on a combined basis as they had been operated and evaluated as one operating segment. The Company experienced significant growth over the last few years in most of our product areas. As the Company has grown organically, and as the Company previously added to its capabilities through acquisitions, its products have increased in scale and become more strategically important and distinctly organized and managed under these two groupings. In addition, Derek Peterson, the Company’s Chief Operating Decision Maker (“CODM”), reviews results, manages and allocates resources between these two strategic business groupings, and budgets using these business segments. The Company’s CODM reviews revenues including intersegment revenues, gross profit and operating income (loss) before income taxes when evaluating segment performance and allocating resources to each segment. Accordingly, intersegment revenue is included in the segment revenues presented in the tables below and is eliminated from revenues and cost of goods sold in the “Eliminations and Other” column. The “Eliminations and Other” column also includes various income and expense items that the Company does not allocate to its operating segments. These income and expense amounts include the results of the Company’s hydroponic equipment, which are not material, interest income, interest expense, corporate overhead, and corporate-wide expense items such as legal and professional fees as well as expense items for which we have not identified a reasonable basis for allocation. The accounting policies of the reportable segments are the same as those described in “Note 2 - Summary of Significant Accounting Policies” of the Notes to Unaudited Consolidated Financial Statements.

Herbs and Produce Products

Either independently or in conjunction with third parties, we are a retail seller of locally grown hydroponic herbs, produce, and floral products, which are distributed through major grocery stores throughout the East and Midwest regions of the U.S.

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NOTE 14 – SEGMENT INFORMATION (Continued)

Cannabis Dispensary, Cultivation and Production

Either independently or in conjunction with third parties, we operate medical marijuana retail dispensaries, medical marijuana cultivation and production facilities in California and Nevada. We own real property in Nevada on which we plan to build a medical marijuana dispensary. All of our retail dispensaries in California and Nevada offer a broad selection of medical cannabis products including flowers, concentrates and edibles. We also produce and sell a line of medical cannabis flowers, as well as a line of medical cannabis-extracted products, which include concentrates, cartridges, vape pens and wax products.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables. Total assets at June 30, 2017 and 2016 exclude intercompany receivable balances eliminated in consolidation.

	For the Three Months Ended June 30, 2017
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	1,777,067		$	6,049,319		$	16,487		$	7,842,873
Cost of Goods Sold		1,325,729			5,010,771			–			6,336,500

Gross Profit		451,338			1,038,548			16,487			1,506,373

Selling, General and Administrative Expenses		855,999			2,210,475			2,962,813			6,029,287

Loss from Operations		(404,661	)		(1,171,927	)		(2,946,326	)		(4,522,914	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(515,654	)		(515,654	)
Loss on Extinguishment of Debt		–			–			(1,639,137	)		(1,639,137	)
Gain on Fair Market Valuation of Derivatives		–			–			987,200			987,200
Interest Expense		–			–			(130,510	)		(130,510	)
Loss on Fair Market Valuation of Contingent Consideration		–			(77,286	)		–			(77,286	)
Gain on Settlement of Contingent Consideration		–			4,991,571			–			4,991,571

Total Other Income (Expense)		–			4,914,285			(1,298,101	)		3,616,184

Loss Before Provision for Income Taxes	$	(404,661	)	$	3,742,358		$	(4,244,427	)	$	(906,730	)

Total Assets at June 30, 2017	$	7,104,469		$	60,224,138		$	9,550,062		$	76,878,669

	For the Three Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	5,873,418		$	3,768,977		$	57,514		$	9,699,909
Cost of Goods Sold		5,517,052			2,596,035			39,848			8,152,935

Gross Profit		356,366			1,172,942			17,666			1,546,974

Selling, General and Administrative Expenses		756,405			1,649,452			2,958,494			5,364,351

Loss from Operations		(400,039	)		(476,510	)		(2,940,828	)		(3,817,377	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(218,126	)		(218,126	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(206,000	)		(206,000	)
Interest Income (Expense)		–			250			(60,815	)		(60,565	)

Total Other Income (Expense)		–			250			(972,941	)		(972,691	)

Loss Before Provision for Income Taxes	$	(400,039	)	$	(476,260	)	$	(3,913,769	)	$	(4,790,068	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

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NOTE 14 – SEGMENT INFORMATION (Continued)

For the Six Months Ended June 30, 2017

Herbs and Produce Products

Cannabis Dispensary, Cultivation and Production

Eliminations and Other

Total

Total Revenues

$ 2,694,210

$ 11,936,357

$ 36,762

$ 14,667,329

Cost of Goods Sold

2,295,544

10,506,349

–

12,801,893

Gross Profit

398,666

1,430,008

36,762

1,865,436

Selling, General and Administrative Expenses

1,515,062

4,837,480

6,063,045

12,415,587

Loss from Operations

(1,116,396 )

(3,407,472 )

(6,026,283 )

(10,550,151 )

Other Income (Expense):

Amortization of Debt Discount

–

–

(1,126,270 )

(1,126,270 )

Loss on Extinguishment of Debt

–

–

(2,678,595 )

(2,678,595 )

Gain on Fair Market Valuation of Derivatives

–

–

2,597,950

2,597,950

Interest Expense

–

–

(288,343 )

(288,343 )

Loss on Fair Market Valuation of Contingent Consideration

–

(4,426,047
)
–

(4,426,047
)

Gain on Settlement of Contingent Consideration

–

4,991,571

–

4,991,571

Total Other Income (Expense)

–

565,524

(1,495,258 )

(929,734
)

Loss Before Provision for Income Taxes

$ (1,116,396 )

$ (2,841,948
)

$ (7,521,541 )

$ (11,479,885 )

Total Assets at June 30, 2017

$ 7,104,469

$ 60,224,138

$ 9,550,062

$ 76,878,669

	For the Six Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	7,274,861		$	3,899,180		$	74,035		$	11,248,076
Cost of Goods Sold		6,837,431			2,809,296			39,848			9,686,575

Gross Profit		437,430			1,089,884			34,187			1,561,501

Selling, General and Administrative Expenses		1,155,610			1,851,588			4,284,054			7,291,252

Loss from Operations		(718,180	)		(761,704	)		(4,249,867	)		(5,729,751	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(312,532	)		(312,532	)
Loss on Extinguishment of Debt		–			–			(920,797	)		(920,797	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(1,366,700	)		(1,366,700	)
Interest Income (Expense)		–			250			(116,810	)		(116,560	)

Total Other Income (Expense)		–			250			(3,204,839	)		(3,204,589	)

Loss Before Provision for Income Taxes	$	(718,180	)	$	(761,454	)	$	(7,454,706	)	$	(8,934,340	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

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NOTE 15 – LITIGATION AND CLAIMS

The Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of June 30, 2017, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.

NOTE 16 – SUBSEQUENT EVENTS

Certificate of Amendment to the Certificate of Designation of the Company’s Series B Preferred Stock

On July 26, 2017, the Company filed a Certificate of Amendment to the Certificate of Designation of the Company’s Series B Preferred Stock (the “Amendment”) with the Secretary of State of the State of Nevada to provide for an adjustment of the Conversion Rate of the Company’s Series B Preferred Stock in the event of a reverse stock split or combination in the same ratio as the Company’s common stock. A copy of the Amendment was filed as Exhibit 3.14 to the Company’s Current Report on Form 8-K dated July 26, 2017.

Put on Equity Financing Facility

Subsequent to June 30, 2017, the Company sold 5,519,660 shares of common stock for the net amount of $1,250,000 pursuant to an equity financing facility with an accredited investor.

Debt and Interest Converted into Equity

Subsequent to June 30, 2017, senior convertible promissory notes and accrued interest in the amount of $2,092,492 were converted into 15,738,463 shares of common stock.

Employee Stock-Based Compensation

Subsequent to June 30, 2017, the Company issued 117,648 shares of common stock for employee stock-based compensation.

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FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides a “safe harbor” for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as “might,” “will,” “may,” “should,” “estimates,” “expects,” “continues,” “contemplates,” “anticipates,” “projects,” “plans,” “potential,” “predicts,” “intends,” “believes,” “forecasts,” “future,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates, and projections will occur or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties, and other important factors, many of which are beyond our control, that could cause actual results to differ materially from the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties, and other important factors that could cause actual results to differ include, among others, the risk, uncertainties and factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (the “SEC”), and in this report, as such risk factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov.

We caution you that the risks, uncertainties, and other factors set forth in our periodic filings with the SEC may not contain all of the risks, uncertainties, and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that: (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of the report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments, or otherwise.

COMPANY OVERVIEW

Terra Tech is a holding company with the following subsidiaries:

· Edible Garden Corp., a Nevada corporation (“Edible Garden”);

· MediFarm, LLC, a Nevada limited liability company (“MediFarm”);

· MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”);

· MediFarm I Real Estate, LLC, a Nevada limited liability company (“MediFarm I RE”);

· MediFarm II, LLC, a Nevada limited liability company (“MediFarm II”);

· IVXX, LLC, a Nevada limited liability company (“IVXX LLC”);

· IVXX, Inc., a California corporation (“IVXX Inc.”; together with IVXX LLC, “IVXX”);

· Blüm San Leandro, a California corporation (“Blüm San Leandro”);

· Black Oak Gallery, a California corporation (“Black Oak”);

· GrowOp Technology Ltd., a Nevada corporation (“GrowOp Technology”); and

· EG Transportation, LLC, a Nevada limited liability company (“EG Transportation”).

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Our corporate headquarters is located at 2040 Main Street, Suite 225, Irvine, California 92614 and our telephone number is (855) 447-6967. Our website addresses are as follows: www.terratechcorp.com, www.blumoak.com, www.letsblum.com, www.ivxx.com, and www.ediblegarden.com. No information available on or through our websites shall be deemed to be incorporated into this Quarterly Report on Form 10-Q. Our common stock, par value $0.001 (the “Common Stock”), is quoted on the OTC Markets Group, Inc.’s OTCQX tier under the symbol “TRTC.”

History and Background

Our original business was developing a software program that would allow for automatic call processing through voice-over-Internet protocol, or “VoIP”, technology. Our operations were limited to capital formation, organization, and development of our business plan and target customer market. We generated no revenue.

On February 9, 2012, we completed a reverse-triangular merger with GrowOp Technology whereby we acquired all of the issued and outstanding shares of GrowOp Technology. As a result of the merger, GrowOp Technology became our wholly-owned subsidiary. Following the merger, we ceased our prior operations and are now solely a holding company with seven wholly-owned subsidiaries. We also own interests in four other subsidiaries.

Our Business

We are a vertically integrated cannabis-focused agriculture company that is committed to cultivating and providing the highest quality medical cannabis, as well as other agricultural products, such as herbs and leafy greens that are grown using classic Dutch hydroponic farming methods.

Through Black Oak, we operate a medical marijuana retail dispensary, a medical marijuana cultivation, and have a second medical marijuana cultivation facility under construction (the “Hegenberger facility”), all in Oakland, California. Through MediFarm, MediFarm I, and MediFarm II (together “MediFarm”), we operate four retail medical marijuana dispensary facilities in Nevada, and have in various stages of construction medical marijuana cultivation and production facilities in Nevada. Through MediFarm I RE, we own the real property in Nevada on which we plan to build a medical marijuana dispensary of which we are in the planning phase. All of our retail dispensaries in California and Nevada operate under the name Blüm, which offer a broad selection of medical cannabis products including flowers, concentrates and edibles. Through IVXX, we produce and sell a line of medical cannabis flowers, as well as a line of medical cannabis-extracted products, which include concentrates, cartridges, vape pens and wax products. Through Edible Garden, we are a retail seller of locally grown hydroponic produce, herbs and floral products, which are distributed through major grocery stores such as ShopRite, Walmart, Winn-Dixie, Raley’s, Meijer, Kroger, and others throughout New Jersey, New York, Delaware, Maryland, Connecticut, Pennsylvania and the Midwest. EG Transportation is a company in good standing and no operations to date.

We have a “rollup” growth strategy, which includes the following components:

· With our brand recognition and experienced management team, maximize productivity, provide economies of scale, and increase profitability through our public market vehicle;

· Acquire unique products and niche players where barriers to entry are high and margins are robust, providing them with a broader outlet for their products; and

· Acquire multiple production facilities to capture the market vertical from manufacturing to production up to retail.

Marijuana Industry Overview

Marijuana cultivation refers to the planting, tending, improving and harvesting of the flowering plant Cannabis, primarily for the production and consumption of cannabis flowers, often referred to as “buds”. The cultivation techniques for marijuana cultivation differ than for other purposes such as hemp production and generally references to marijuana cultivation and production do not include hemp.

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Cannabis belongs to the genus Cannabis in the family Cannabaceae and for the purposes of production and consumption, includes three species, C. sativa (“Sativa”), C. indica (“Indica”), and C. ruderalis (“Ruderalis”). Sativa and Indica generally grow tall with some varieties reaching approximately four meters. The females produce flowers rich in tetrahydrocannabinol (“THC”). Ruderalis is a short plant and produces trace amounts of THC, but is very rich in cannabidiol (“CBD”) and which is an antagonist (inhibits the physiological action) to THC.

As of May 2017, there are a total of 29 states, plus the District of Columbia, with legislation passed as it relates to medicinal cannabis. These state laws are in direct conflict with the United States Federal Controlled Substances Act (21 U.S.C. § 811) (“CSA”), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I drug, which is viewed as having a high potential for abuse, has no currently-accepted use for medical treatment in the U.S., and lacks acceptable safety for use under medical supervision.

These 29 states, and the District of Columbia, have adopted laws that exempt patients who use medicinal cannabis under a physician’s supervision from state criminal penalties. These are collectively referred to as the states that have de-criminalized medicinal cannabis, although there is a subtle difference between de-criminalization and legalization, and each state’s laws are different.

The states that have legalized medicinal cannabis are as follows (in alphabetical order):

1. Alaska	11. Maine	21. New York
2. Arizona	12. Maryland	22. North Dakota
3. Arkansas	13. Massachusetts	23. Ohio
4. California	14. Michigan	24. Oregon
5. Colorado	15. Minnesota	25. Pennsylvania
6. Connecticut	16. Montana	26. Rhode Island
7. Delaware	17. Nevada	27. Vermont
8. Florida	18. New Hampshire	28. Washington
9. Hawaii	19. New Jersey	29. West Virginia
10. Illinois	20. New Mexico

Medical cannabis decriminalization is generally referred to as the removal of all criminal penalties for the private possession and use of cannabis by adults, including cultivation for personal use and casual, nonprofit transfers of small amounts. Legalization is generally referred to as the development of a legally controlled market for cannabis, where consumers purchase from a safe, legal, and regulated source.

The dichotomy between federal and state laws has also limited the access to banking and other financial services by marijuana businesses. Recently the U.S. Department of Justice and the U.S. Department of Treasury issued guidance for banks considering conducting business with marijuana dispensaries in states where those businesses are legal, pursuant to which banks must now file a Marijuana Limited Suspicious Activity Report that states the marijuana business is following the government’s guidelines with regard to revenue that is generated exclusively from legal sales. However, since the same guidance noted that banks could still face prosecution if they provide financial services to marijuana businesses, it has led to the widespread refusal of the banking industry to offer banking services to marijuana businesses operating within state and local laws.

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In November 2016, California and Nevada voters both approved marijuana use for adults over the age of 21 without a physician’s prescription or recommendation, so called recreational marijuana, and permitted the cultivation and sale of marijuana, in each case subject to certain limitations. We have obtained the necessary permits and licenses to expand our existing business to cultivate and distribute marijuana in compliance with the laws in the state of Nevada and California. We have received provisional permits to operate a dispensary and production facility in the city of San Leandro, California, and upon project completion and inspection, to receive final operating permits. Although, there is no guarantee that we will be successful in doing so. Despite the changes in state laws, marijuana remains illegal under federal law.

In November 2016, California voters approved Proposition 64, which is also known as the Adult Use of Marijuana Act (“the AUMA”), in a ballot initiative. Among other things, the AUMA makes it legal for adults over the age of 21 to use marijuana and to possess up to 28.5 grams of marijuana flowers and 8 grams of marijuana concentrates. Individuals are also permitted to grow up to six marijuana plants for personal use. In addition, the AUMA establishes a licensing system for businesses to, among other things, cultivate, process and distribute marijuana products under certain conditions. Many of the provisions of the AUMA do not become effective until January 1, 2018 and the California Bureau of Marijuana Control is expected to enact regulations to implement the AUMA by that date.

Nevada voters approved Question 2 in a ballot initiative in November 2016. Among other things, Question 2 makes it legal for adults over the age of 21 to use marijuana and to possess up to one ounce of marijuana flowers and one-eighth of an ounce of marijuana concentrates. Individuals are also permitted to grow up to six marijuana plants for personal use. In addition, Question 2 authorizes businesses to cultivate, process and distribute marijuana products under certain conditions. On June 30, 2017, the State of Nevada Department of Taxation approved our Dual Use Marijuana business licenses. This approval allowed all four of our Blüm cannabis dispensaries in Nevada to commence sales of cannabis for adult-use beginning on July 1, 2017.

In an effort to provide guidance to federal law enforcement, the Department of Justice (the “DOJ”) has issued Guidance Regarding Marijuana Enforcement to all United States Attorneys in a memorandum from Deputy Attorney General David Ogden on October 19, 2009, in a memorandum from Deputy Attorney General James Cole on June 29, 2011 and in a memorandum from Deputy Attorney General James Cole on August 29, 2013. Each memorandum provides that the DOJ is committed to the enforcement of the CSA, but the DOJ is also committed to using its limited investigative and prosecutorial resources to address the most significant threats in the most effective, consistent, and rational way.

The August 29, 2013 memorandum provides updated guidance to federal prosecutors concerning marijuana enforcement in light of state laws legalizing medical and recreational marijuana possession in small amounts. The memorandum sets forth certain enforcement priorities that are important to the federal government:

· Distribution of marijuana to children;

· Revenue from the sale of marijuana going to criminals;

· Diversion of medical marijuana from states where it is legal to states where it is not;

· Using state authorized marijuana activity as a pretext of other illegal drug activity;

· Preventing violence in the cultivation and distribution of marijuana;

· Preventing drugged driving;

· Growing marijuana on federal property; and

· Preventing possession or use of marijuana on federal property.

The DOJ has not historically devoted resources to prosecuting individuals whose conduct is limited to possession of small amounts of marijuana for use on private property, but has relied on state and local law enforcement to address marijuana activity. In the event the DOJ reverses its stated policy and begins strict enforcement of the CSA in states that have laws legalizing medical marijuana and recreational marijuana in small amounts, there may be a direct and adverse impact to our business and our revenue and profits.

Furthermore, H.R. 83, enacted by Congress on December 16, 2014, provides that none of the funds made available to the DOJ pursuant to the 2015 Consolidated and Further Continuing Appropriations Act may be used to prevent certain states, including Nevada and California, from implementing their own laws that authorized the use, distribution, possession, or cultivation of medical marijuana.

We are monitoring the Trump administration’s, the DOJ’s and Congress’ positions on federal marijuana law and policy. Based on public statements and reports, we understand that certain aspects of those laws and policies are currently under review, but no official changes have been announced. It is possible that certain changes to existing laws or policies could have a negative effect on our business and results of operations.

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We currently operate medical marijuana businesses in California and Nevada. Although the possession, cultivation and distribution of marijuana for medical use is permitted in California and Nevada, provided compliance with applicable state and local laws, rules, and regulations, marijuana is illegal under federal law. We believe we operate our business in compliance with applicable Nevada and California law and regulations. Any changes in federal, state or local law enforcement regarding marijuana may affect our ability to operate our business. Strict enforcement of federal law regarding marijuana would likely result in the inability to proceed with our business plans, could expose us to potential criminal liability and could subject our properties to civil forfeiture. Any changes in banking, insurance or other business services may also affect our ability to operate our business.

Our Medical Marijuana Dispensaries, Cultivation and Manufacturing

Black Oak Gallery

On April 1, 2016, we acquired Black Oak, which operates a medical marijuana dispensary in Oakland, California under the name Blüm. Black Oak opened its retail storefront in Oakland, California in November 2012.

Black Oak sells a combination of our own cultivated products as well as high quality name-brand products from outside suppliers. In addition to multiple grades of medical marijuana, Black Oak sells “edibles”, which include cannabis-infused baked goods, chocolates, and candies; cannabis-infused topical products, such as lotions, massage oils and balms; clones of marijuana plants; and numerous kinds of cannabis concentrates, such as hash, shatter and wax.

Black Oak’s target markets are those individuals located in the areas surrounding its dispensary and qualify as “patients” under state and local rules and regulations. Black Oak services approximately 1,000 patients per day and has over 42,000 registered patients. Collectively known as the Blüm Campus, Black Oak’s location consists of a retail dispensary storefront, indoor cultivation area, laboratory and a 20-car capacity parking lot.

During March 2017, we executed a lease for 13,000 square feet of industrial space on over 30,000 square feet of land in Oakland’s industrial corridor. We are in the early stages of construction of the Hegenberger facility. We expect to complete construction by late 2017.

On May 11, 2017, we terminated the Operations and Asset Management Agreement (the “Agreement”) by and among the Company, Black Oak and Platinum Standard, LLC (“Platinum”), dated March 31, 2016. There is no relationship between the Company or its affiliates and Platinum, other than pursuant to the Agreement. Pursuant to the Agreement, the Company hired and appointed Platinum as the operator and asset manager of the Company’s licensed medical cannabis dispensary business located at 578 West Grand Avenue, in the City of Oakland, State of California, commonly known as Blüm Oakland, in exchange for certain payments to be made by the Company to Platinum, all as more fully set forth in the Agreement. We terminated the Agreement as a result of the default by Platinum in the performance of certain of its material obligations under the Agreement. We did not incur any early termination penalty in connection with terminating the Agreement. A copy of the Agreement was filed as Exhibit 10.29 to the Company’s Form 10-Q for the quarterly period ended March 31, 2016. See “Note 9 – Contingent Consideration Liability” for further information.

Blüm San Leandro

We incorporated Blüm San Leandro, a California corporation, a wholly-owned subsidiary, on October 14, 2016. Blüm San Leandro has received the necessary governmental approvals and permitting to operate a medical marijuana dispensary and production facility in San Leandro, California. We have executed a lease for 13,300 square feet of industrial space in San Leandro’s industrial corridor and are in the final planning and design stages of the retail dispensary and production facility. We also plan on incorporating community meeting space at this facility. We expect to complete construction of the dispensary by late 2017 and we expect to complete construction of the production facility and community meeting space by early 2018.

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MediFarm, MediFarm I, and MediFarm II

We formed three subsidiaries for the purposes of cultivation or production of medical marijuana and/or operation of dispensary facilities in various locations in Nevada. MediFarm, MediFarm I, and MediFarm II have received four final dispensary licenses, two provisional cultivation licenses and two provisional production licenses from the State of Nevada, and we have received approval from local authorities with respect to all eight of such licenses. The receipt of both the provisional licenses from the State of Nevada and approval from local authorities were necessary to commence the final permitting process for the cultivation and production licenses. The receipt of final permits and licenses was necessary to commence the cultivation and production businesses of MediFarm, MediFarm I, and MediFarm II. Effectuation of the businesses of each of (i) MediFarm, (ii) MediFarm I, and (iii) MediFarm II is also dependent upon the continued legislative authorization of medical marijuana at the state level.

Each subsidiary was formed with different investors, thus necessitating the need for multiple entities with different strategic partners and advisory board members. In addition, we anticipate each subsidiary will service a different geographical market in Nevada. We expect to allocate future business opportunities among MediFarm, MediFarm I, and MediFarm II based on the locations of such opportunities.

We formed MediFarm, LLC on March 19, 2014. We own 60% of the membership interests in MediFarm. The remaining membership interests are owned by Camden Goorjian (20%) and by Richard Vonfeldt (20%), two otherwise unaffiliated individuals. MediFarm has received the necessary governmental approvals and permitting to operate medical marijuana cultivation, production, and/or dispensary facilities in Clark County, Nevada and a medical marijuana dispensary facility in the City of Las Vegas. As of June 30, 2017, MediFarm has three fully operational retail medical marijuana dispensaries in the greater Las Vegas region.

We formed MediFarm I, LLC on July 18, 2014. We own 50% of the membership interests in MediFarm I. The remaining membership interests are owned by Forever Green NV, LLC (50%), an otherwise unaffiliated entity that also owns certain membership interests in MediFarm II. MediFarm I has the necessary governmental approvals and permitting to operate a medical marijuana dispensary in Reno, Nevada. As of June 30, 2017, MediFarm I has one fully operational retail medical marijuana dispensary in Reno, Nevada.

We formed MediFarm II, LLC on July 30, 2014. We own 55% of the membership interests in MediFarm II. The remaining membership interests are owned by Nevada MF, LLC (30%) and by Forever Green NV, LLC (15%), two otherwise unaffiliated entities. Forever Green NV, LLC also owns certain membership interests in MediFarm I. MediFarm II has received provisional licenses from the State of Nevada to operate a medical marijuana cultivation and production facility in Spanish Springs, Nevada.

MediFarm, MediFarm I, and MediFarm II may face substantial competition in the operation of cultivation, production, and dispensary facilities in Nevada. Numerous other companies were also granted licenses, and, therefore, we anticipate that we will face competition with these other companies if such companies operate cultivation, production, and dispensary facilities in and around the locations at which we operate our facilities. Our management has extensive experience in successfully developing, implementing, and operating all facets of equivalent businesses in other markets. We believe this experience will provide MediFarm, MediFarm I, and MediFarm II with a competitive advantage over these other companies.

MediFarm, MediFarm I, and MediFarm II rely on a combination of trademark laws, trade secrets, confidentiality provisions, and other contractual provisions to protect their proprietary rights. MediFarm, MediFarm I, and MediFarm II do not own any patents.

IVXX and IVXX Branded Products

On September 16, 2014, Terra Tech formed IVXX, a wholly-owned subsidiary, for the purposes of producing a line of IVXX branded cannabis flowers as well as a complete line of IVXX branded pure cannabis concentrates including: oils, waxes, shatters, and clears.

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The science of cannabis concentrate extraction functions on the solubility of the cannabinoids and other active ingredients in the cannabis plant. Cannabinoids are not water soluble, so to extract them properly, the cannabinoids must be dissolved in a solvent. IVXX utilizes multiple proprietary extraction methods to produce its concentrates in its lab located in Oakland, California. The Company’s extractors process raw cannabis plants and separate the chemical cannabinoids from the cannabis plant material, producing a concentrate. IVXX also sells clothing, apparel, and other various branded products.

IVXX currently sells its branded products at wholesale to multiple medical cannabis dispensaries throughout California. None of IVXX’s products cross state lines. IVXX continues to actively seek opportunities to sell its products to other retailers located throughout the State of California. IVXX anticipates expanding its business into other states in which the sale of marijuana is legally permitted. In order for such expansion to occur, IVXX must secure the necessary licenses and permits required to operate in any given state, the timing and occurrence of which there can be no assurance. Initially, IVXX anticipates selling its products in Nevada in the four dispensaries operated by MediFarm and MediFarm I. They will be produced at our extraction lab operated by MediFarm II once they are issued final permits and commence operations, as to the occurrence of which there can be no assurance.

IVXX’s target markets are those individuals located in the areas surrounding the dispensaries that sell IVXX’s products and that qualify as “patients” under state and local rules and regulations.

IVXX also intends to produce, market and sell their line of IVXX branded cannabis products in the adult use, recreational cannabis markets in both California and Nevada pursuant to Proposition 64 and Question 2, respectively, which made marijuana consumption legal, with certain restrictions and rules, for adults over the age of 21. IVXX is consistently engaged in research and development with respect to increasing the efficiency of the processes used to produce its products, as well as improving the quality of its products for the benefit of its patients.

On May 24, 2017, we announced the launch of a new “Craft Cultivation” model to expand our cultivation capabilities and the signing of our first “Craft Cultivator” in Northern California. This farm, which is approved for up to one full acre (approximately 44,000 square feet) of cannabis cultivation and uses 22,000 square feet of engineered greenhouse space, is estimated to yield approximately one metric ton of our proprietary high grade “IVXX” cannabis on an annual basis.

MediFarm I RE

On October 14, 2015, we formed MediFarm I RE, LLC. We own 50% of the membership interests in MediFarm I RE. The remaining membership interests are owned by Forever Young Investments, LLC (50%), an otherwise unaffiliated entity. MediFarm I RE is a real estate holding company that owns the real property and a building that is situated on such real property, at which a medical marijuana dispensary facility is expected to be located. This facility is in the early stages of planning. It is our intention that MediFarm I will operate the medical marijuana dispensary.

Herbs and Produce Products

Edible Garden

Edible Garden was incorporated on April 9, 2013. Edible Garden is a retail seller of locally grown hydroponic produce, herbs, and floral products that are distributed throughout the Northeast and Midwest United States. Currently, Edible Garden’s products are sold at approximately 1,800 retailers throughout these markets. Most of the produce and herbs grown by Edible Garden are certified organic. Our target customers are those individuals seeking organic and fresh produce locally grown using environmentally sustainable methods.

Pursuant to letter agreements with Gro-Rite Inc., a New Jersey corporation, and Heartland Growers Inc. (collectively the “Farmers”), have agreed to cultivate the various parts of the line of Edible Garden produce to be sold into the retail grocery channel. Pursuant to the terms of the agreements, Edible Garden will manage the marketing and sales, while the Farmers will be responsible for the cultivation, packaging, and shipping of the product for retail sale under the Edible Garden brand. The terms of the agreements are now month-to-month.

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There are numerous growers that are available to us, and therefore, we are not limited in the number of growers available nor are we dependent on any one grower. We completed construction of a greenhouse structure in 2014, which can be used to grow plants to satisfy selling demands; however, we may incur additional freight costs to distribute these plants until growers are replaced.

Edible Garden’s main competitors are Shenandoah Growers and Sun Aqua Farms. To a lesser extent, Edible Garden competes with Green Giant, Del Monte, Rock Hedge Herbs, and Infinite Herbs. Edible Garden is an up and coming brand that has increased its retailers to approximately 1,800 retail sellers since we acquired Edible Garden in March 2013. Edible Garden believes the following three factors set it apart from its competitors: (1) its branding and marketing displays, which are predominately placed in high traffic areas on its proprietary racks; (2) it uses proprietary strands and seeds for its produce and its methodology for growing such produce; and (3) all of its produce is hydroponically grown and sold “alive” (i.e., the produce is sold “rooted”).

Edible Garden relies on a combination of trademark laws, trade secrets, confidentiality provisions, and other contractual provisions to protect its proprietary rights, which are primarily its brand names, marks, and proprietary pods and seeds. Edible Garden owns trademarks, but does not own any patents. Edible Garden signed an exclusive license agreement with Nutrasorb LLC, a spin-off from Rutgers University, to grow and commercialize nutritionally-enhanced lettuce varieties. Under the terms of the agreement, Edible Garden has the right to grow and sell Green and Red Superleaf Lettuce across the North American and European continents as well as Australia. With five times more antioxidants than ordinary lettuce, the produce is high in vitamins A and C, magnesium, iron and potassium contents. It also has high levels of fiber and chlorogenic acid for superior digestion. These nutritionally-enhanced, proprietary Green and Red Superleaf Lettuces were developed by scientists at Rutgers University following years of intensive research. Edible Garden pays a license fee to Nutrasorb, LLC for each unit sold.

Edible Garden’s produce is Global Food Safety Initiative certified. Edible Garden also obtained certain organic certifications for its products. No other governmental regulations or approvals are needed or affect its business.

Edible Garden’s research and development activities have primarily focused on developing and testing new pods and seeds, as well as different fertilizers, nutrient blends, and lighting.

Our Operations

We are organized into two reportable segments:

· Herbs and Produce Products – Includes herbs and leafy greens that are grown using classic Dutch hydroponic farming methods; and

· Cannabis Dispensary, Cultivation and Production – Includes cannabis-focused retail, cultivation and production.

Herbs and Produce Products

Cannabis Dispensary, Cultivation and Production

Either independently or in conjunction with third parties, we operate medical marijuana retail dispensaries and a medical marijuana cultivation in California. In addition, we operate four retail medical marijuana dispensary facilities in Nevada, and have in various stages of construction, medical marijuana cultivation and production facilities in Nevada. We own real property in Nevada on which we plan to build a medical marijuana dispensary. All of our retail dispensaries in California and Nevada offer a broad selection of medical cannabis products including flowers, concentrates and edibles. We also produce and sell a line of medical cannabis flowers, as well as a line of medical cannabis-extracted products, which include concentrates, cartridges, vape pens and wax products.

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

Revenues

For the three months ended June 30, 2017, we generated revenues of $7.84 million, compared to $9.70 million for the three months ended June 30, 2016, a decrease of $1.86 million or 19.2 percent. The decrease was primarily due to revenues from floral sales resulting from a contract that expired at December 31, 2016. The floral revenues were $4.40 million for the three months ended June 30, 2016 versus zero for the three months ended June 30, 2017. The decrease was partially offset by increased revenue generated by: (i) the Black Oak, MediFarm and MediFarm I dispensaries; (ii) IVXX from the sale of its cannabis products; and (iii) Edible Garden from the sale of its herbs and produce products. At this stage in our development, revenues are not yet sufficient to cover ongoing operating expenses.

Cost of Goods Sold

For the three months ended June 30, 2017, cost of goods sold was $6.34 million, compared to $8.15 million for the three months ended June 30, 2016, a decrease of $1.81 million or 22.2%. The decrease in cost of goods sold was attributable to: (i) a decrease of $4.19 million from the herbs and produce segment, which had $1.33 million and $5.52 million cost of goods sold for the three months ended June 30, 2017 and 2016, respectively; and (ii) an increase of $2.41 million from the cannabis segment, which had $5.01 million and $2.60 million cost of goods sold for the three months ended June 30, 2017 and 2016, respectively. The cannabis segment increase was related to two additional MediFarm dispensaries and one additional MediFarm I dispensary that were open during the three months ended June 30, 2017 versus not being open during the three months ended June 30, 2016. The herbs and produce segment decrease was related to the expiration of the floral product contract.

Gross Profit

Our gross profit for the three months ended June 30, 2017 was $1.51 million, compared to a gross profit of $1.55 million for the three months ended June 30, 2016, a decrease of $41,000 or 2.6 percent. Our gross margin percentage for the three months ended June 30, 2017 was 19.2 percent, compared to 15.9 percent for the three months ended June 30, 2016. The increase in gross margin percentage was attributable to: (i) the cannabis segment, which had $1.04 million and $1.17 million gross profit for the three months ended June 30, 2017 and 2016, respectively, or 17.2 percent and 31.1 percent gross margin for the three months ended June 30, 2017 and 2016, respectively; and (ii) the herbs and produce segment, which had $451,000 and $356,000 gross profit for the three months ended June 30, 2017 and 2016, respectively, or 25.4 percent and 6.1 percent gross margin for the three months ended June 30, 2017 and 2016, respectively. The cannabis segment decrease was related to two additional MediFarm dispensaries and one additional MediFarm I dispensary that were open during the three months ended June 30, 2017 versus not being open during the three months ended June 30, 2016. The cannabis products gross margin percentage decreased due to discounting of the products sold at the new dispensaries in an effort to gain market share. The herbs and produce segment increase was related to the expiration of the floral product contract.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended June 30, 2017 were $6.03 million, compared to $5.36 million for the three months ended June 30, 2016, an increase of $665,000 or 12.4 percent. The increase was primarily due to salaries for the MediFarm dispensaries in Las Vegas, Nevada.

Operating Income (Loss)

We realized an operating loss of $4.52 million for the three months ended June 30, 2017, compared to an operating loss of $3.82 million for the three months ended June 30, 2016, an increase of $706,000 or 18.5 percent.

Other Income (Expense)

Other income for the three months ended June 30, 2017 was $3.62 million, compared to other expense of $973,000 for the three months ended June 30, 2016, an increase of $4.59 million. This increase was primarily attributable to: (i) a $4.99 million gain on settlement of contingent consideration related to the Black Oak acquisition (see “Note 9 – Contingent Consideration Liability” for further information); (ii) a $4.43 million loss on fair market valuation of contingent consideration; (iii) an increase in loss on extinguishment of debt of $1.64 million, which was $1.64 million for the three months ended June 30, 2017, compared to zero in the prior year period; (iv) an increase in amortization of debt discount of $298,000, which was $516,000 for the three months ended June 30, 2017, compared to $218,000 in the prior year period; (v) a decrease in gain (loss) on fair market valuation of derivatives of $1.19 million, which was a gain of $987,000 for the three months ended June 30, 2017, compared to a loss of $206,000 in the prior year period; and (vi) a decrease in loss from derivatives issued with debt greater than debt carrying value of $488,000, which was zero for the three months ended June 30, 2017, compared to $488,000 in the prior year period.

Net Loss Attributable to Terra Tech Corp.

We incurred a net loss attributable to Terra Tech Corp. of $454,000, or $0.00 per share, for the three months ended June 30, 2017, compared to a net loss attributable to Terra Tech Corp. of $4.93 million, or $0.01 per share, for the three months ended June 30, 2016. The primary reasons for the decrease were a decrease in revenue, an increase in selling, general and administrative expenses, and an increase in gain on settlement of contingent consideration during the three months ended June 30, 2017, compared to the prior year period.

Management will continue its efforts to lower operating expenses and increase revenue. We will continue to invest in further expanding our operations and a comprehensive marketing campaign with the goal of accelerating the education of potential clients and promoting our name and our products. Given the fact that most of the operating expenses are fixed or have a quasi-fixed character, management expects that, as revenue increases, those expenses, as a percentage of revenue, will significantly decrease. Nevertheless, there can be no assurance that we will be able to increase our revenues in succeeding quarters.

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Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

Revenues

For the six months ended June 30, 2017, we generated revenues of $14.67 million, compared to $11.25 million for the six months ended June 30, 2016, an increase of $3.42 million or 30.4 percent. The increase was primarily due to revenue generated by: (i) the Black Oak, MediFarm and MediFarm I dispensaries; (ii) IVXX from the sale of its cannabis products; and (iii) Edible Garden from the sale of its herbs and produce products; partially offset by a decrease in revenues from floral sales resulting from the expiration of a contract for floral product that expired at December 31, 2016. The floral revenues were $4.79 million for the six months ended June 30, 2016 versus zero for the six months ended June 30, 2017. At this stage in our development, revenues are not yet sufficient to cover ongoing operating expenses.

Cost of Goods Sold

For the six months ended June 30, 2017, cost of goods sold was $12.80 million, compared to $9.69 million for the six months ended June 30, 2016, an increase of $3.11 million or 32.1%. The increase in cost of goods sold was attributable to: (i) an increase of $7.70 million from the cannabis segment, which had $10.51 million and $2.81 million cost of goods sold for the six months ended June 30, 2017 and 2016, respectively; and (ii) a decrease of $4.54 million from the herbs and produce segment, which had $2.30 million and $6.84 million cost of goods sold for the six months ended June 30, 2017 and 2016, respectively. The cannabis segment increase was related to: (i) a full six months of cost of goods sold for Black Oak during the six months ended June 30, 2017 versus cost of goods sold for only three months of ownership for the six months ended June 30, 2016; and (ii) two additional MediFarm dispensaries and one additional MediFarm I dispensary that were open during the six months ended June 30, 2017 versus not being open during the six months ended June 30, 2016. The herbs and produce segment decrease was related to the expiration of the floral product contract.

Gross Profit

Our gross profit for the six months ended June 30, 2017 was $1.87 million, compared to a gross profit of $1.56 million for the six months ended June 30, 2016, an increase of $304,000 or 19.5 percent. Our gross margin percentage for the six months ended June 30, 2017 was 12.7 percent, compared to 13.9 percent for the six months ended June 30, 2016. The decrease in gross margin percentage was attributable to: (i) the cannabis segment, which had $1.43 million and $1.09 million gross profit for the six months ended June 30, 2017 and 2016, respectively, or 12.0 percent and 28.0 percent gross margin for the six months ended June 30, 2017 and 2016, respectively; and (ii) the herbs and produce segment, which had $399,000 and $437,000 gross profit for the six months ended June 30, 2017 and 2016, respectively, or 14.8 percent and 6.0 percent gross margin for the six months ended June 30, 2017 and 2016, respectively. The cannabis segment increase was related to: (i) a full six months of gross profit for Black Oak during the six months ended June 30, 2017 versus only three months of ownership that contributed to gross profit for the six months ended June 30, 2016; and (ii) two additional MediFarm dispensaries and one additional MediFarm I dispensary that were open and contributed to gross profit for the six months ended June 30, 2017 versus not being open during the six months ended June 30, 2016. The cannabis products gross margin percentage decreased due to discounting of the products sold at the new dispensaries in an effort to gain market share. The herbs and produce segment decrease in gross profit was partially offset by an increase in gross margin percentage related to the expiration of the floral products contract.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended June 30, 2017 were $12.42 million, compared to $7.29 million for the six months ended June 30, 2016, an increase of $5.13 million or 70.4 percent. The increase was primarily due to two factors: (i) an increase in salaries and wages for operations at the MediFarm dispensaries, which includes $1.36 million of stock compensation expense issued to employees during the six months ended June 30, 2017, compared to no stock compensation issued to employees during the six months ended June 30, 2016; and (ii) three additional months of activity for the Black Oak operations acquired on April 1, 2016.

Operating Income (Loss)

We realized an operating loss of $10.55 million for the six months ended June 30, 2017, compared to an operating loss of $5.73 million for the six months ended June 30, 2016, an increase of $4.82 million or 84.1 percent.

Other Income (Expense)

Other expense for the six months ended June 30, 2017 was $930,000, compared to $3.20 million for the six months ended June 30, 2016, a decrease of $2.27 million or 71.0 percent. This decrease was primarily attributable to: (i) a $4.99 million gain on settlement of contingent consideration related to the Black Oak acquisition (see “Note 9 – Contingent Consideration Liability” for further information); (ii) a $4.43 million loss on fair market valuation of contingent consideration; (iii) an increase in loss on extinguishment of debt of $1.76 million, which was $2.68 million for the six months ended June 30, 2017, compared to $921,000 in the prior year period; (iv) an increase in amortization of debt discount of $814,000, which was $1.13 million for the six months ended June 30, 2017, compared to $313,000 in the prior year period; (v) a decrease in gain (loss) on fair market valuation of derivatives of $3.96 million, which was a gain of $2.60 million for the six months ended June 30, 2017, compared to a loss of $1.37 million in the prior year period; and (vi) a decrease in loss from derivatives issued with debt greater than debt carrying value of $488,000, which was zero for the six months ended June 30, 2017, compared to $488,000 in the prior year period.

Net Loss Attributable to Terra Tech Corp.

We incurred a net loss attributable to Terra Tech Corp. of $10.57 million, or $0.02 per share, for the six months ended June 30, 2017, compared to a net loss attributable to Terra Tech Corp. of $9.06 million, or $0.03 per share, for the six months ended June 30, 2016. The primary reasons for the increase were a decrease in revenue, and an increase in selling, general and administrative expenses during the six months ended June 30, 2017, compared to the prior year period.

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DISCLOSURE ABOUT OFF-BALANCE SHEET ARRANGEMENTS

We do not have any transactions, agreements or other contractual arrangements that constitute off-balance sheet arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section discusses our unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. These accounting policies are described in “Note 2 - Summary of Significant Accounting Policies” of the Notes to Unaudited Consolidated Financial Statements included in this report.

LIQUIDITY AND CAPITAL RESOURCES

We have never reported net income. We incurred net losses for the six months ended June 30, 2017, and have an accumulated deficit of $83.44 million as of June 30, 2017, compared to an accumulated deficit of $72.87 million at December 31, 2016. As of June 30, 2017, we had working capital of $6.51 million, compared to a working capital deficit of $9.56 million at December 31, 2016. At June 30, 2017, we had a cash balance of $9.13 million, compared to a cash balance of $9.75 million at December 31, 2016.

We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Since our inception, we have raised capital through private sales of preferred stock, common stock, and debt securities. Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations.

We anticipate requiring additional capital for the commercial development of our subsidiaries. Black Oak, Blüm San Leandro and the Hegenberger facility, together, will require approximately $3.0 million in capital to complete. Construction for the completion of the packaging facility for Edible Garden will require approximately $1.2 million. The estimated construction budget for the development of the cultivation and production facilities under MediFarm II is approximately $2.0 million. Forever Green NV, LLC, a member of MediFarm II, has agreed to contribute approximately $750,000 in the form of debt to MediFarm II. We will be obligated to contribute the remaining amount.

We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenues to a point of positive cash flow. We believe our existing and available capital resources will be sufficient to satisfy our funding requirements through the second quarter of 2018. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling common stock. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all.

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The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

Operating Activities

Cash used in operating activities for the six months ended June 30, 2017 was $7.15 million, compared to $3.30 million for the six months ended June 30, 2016, an increase of $3.85 million, or 116.4 percent. Increases in cash used in operating activities were primarily due to: (i) a $11.48 million net loss for the six months ended June 30, 2017, compared to a $9.32 million loss for the six months ended June 30, 2016, an increase of $2.16 million; (ii) a decrease in gain (loss) on fair market valuation of derivatives of $3.96 million, which was a gain of $2.60 million for the six months ended June 30, 2017, compared to a loss of $1.37 million in the prior year period; and (iii) a decrease in accounts payable and accrued expenses of $1.35 million. Decreases in cash used in operating activities were primarily due to: (i) an increase in loss on extinguishment of debt of $1.76 million, which was $2.68 million for the six months ended June 30, 2017, compared to $921,000 in the prior year period; and (ii) an increase in amortization of debt discount of $814,000, which was $1.13 million for the six months ended June 30, 2017, compared to $313,000 in the prior year period.

Investing Activities

Cash used in investing activities for the six months ended June 30, 2017 was $1.04 million, compared to cash used in investing activities of $1.90 million for the six months ended June 30, 2016, a decrease of $864,000, or 45.5 percent. During the first six months of 2017, cash used in investing activities was primarily comprised of expenditures related to: (i) the construction of the San Leandro and Oakland facilities; and (ii) capital expenditures at Edible Garden in Belvidere, N.J.

Financing Activities

Cash provided by financing activities for the six months ended June 30, 2017 was $7.57 million, compared to $6.46 million for the six months ended June 30, 2016, an increase of $1.11 million, or 17.2 percent. Cash provided by financing activities for the six months ended June 30, 2017 was primarily due to: (i) $6.00 million from the issuance of debt; (ii) $3.75 million from the sale of common stock; partially offset by (iii) payment of $2.09 million for the contingent consideration related to the Black Oak acquisition.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Our primary market risks are attributable to fluctuations in commodity prices and interest rates. These fluctuations can affect revenues and cash flow from operating, investing and financing activities.

Commodity Price Risk

Our most significant market risk relates to fluctuations in marijuana prices. Management expects the prices of these commodities to remain volatile and unpredictable. As these prices decline or rise significantly, revenues and cash flow will also decline or rise significantly.

Interest Rate Risk

As of June 30, 2017, we had no outstanding variable-rate debt and $3.65 million of principal fixed-rate debt.

Credit Risk

Our exposure to non-payment or non-performance by our customers and counterparties presents a credit risk. Generally, non-payment or non-performance results from a customer’s or counterparty’s inability to satisfy obligations. We may also be exposed to credit risk due to the concentration of our customers in the medical marijuana industry, as our customers may be similarly affected by changes in regulatory and legal conditions in the states and municipalities in which we operate.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our SEC reports is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of June 30, 2017.

There were no changes in our internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not currently subject to any legal proceedings. From time to time, we may become subject to litigation or proceedings in connection with our business, as either a plaintiff or defendant. There are no such pending legal proceedings to which we are a party that, in the opinion of management, is likely to have a material adverse effect on our business, financial condition or results of operations.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risk factors disclosed in Part I, Item 1A, “Risk Factors”, of our Annual Report on Form 10-K for the year ended December 31, 2016. Please refer to that section for disclosures regarding the risk and uncertainties relating to our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

Exhibit		Description

3.1		Certificate of Amendment to Certificate of Designation of Series B Preferred Stock, dated July 26, 2017 (1)

4.1		Form of 12% Senior Convertible Promissory Note (2)

4.2		Form of 12% Senior Convertible Promissory Note (3)

10.1		Operations and Asset Management Agreement dated March 31, 2016, by and among Platinum Standard, LLC, Black Oak Gallery, and Terra Tech Corp. (4)

10.2		Form of Security Agreement, dated as of June 23, 2017 (2)

10.3		Form of Security Agreement, dated as of February 22, 2017 (3)

31.1		Certification of Derek Peterson, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2		Certification of Michael C. James, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32.1		Certification of Derek Peterson, Chief Executive Officer, pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. *

32.2		Certification of Michael C. James, Chief Financial Officer, pursuant to Sections 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. *

101.INS		XBRL Instance Document *

101.SCH		XBRL Taxonomy Extension Schema Document *

101.CAL		XBRL Taxonomy Extension Calculations Linkbase Document *

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document *

101.LAB		XBRL Taxonomy Extension Label Linkbase Document *

101.PRE		XBRL Taxonomy Presentation Linkbase Document *

______________

* Filed herewith

(1) Incorporated by reference to Current Report on Form 8-K filed with the SEC on July 26, 2017.

(2) Incorporated by reference to Current Report on Form 8-K filed with the SEC on June 23, 2017.

(3) Incorporated by reference to Current Report on Form 8-K filed with the SEC on February 22, 2017.

(4) Incorporated by reference to Quarterly Report on Form 10-Q filed with the SEC on May 12, 2016.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TERRA TECH CORP.

Date: August 8, 2017	By:	/s/ Michael C. James
		Michael C. James
		Chief Financial Officer Chief Accounting Officer

EX-31.1 2 trtc_ex311.htm CERTIFICATION trtc_ex311.htm

EXHIBIT 31.1

Certifications pursuant to Securities and Exchange Act of 1934

Rule 13a-14 as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Derek Peterson, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of the Terra Tech Corp. (the “Registrant”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.

The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: August 8, 2017

By:

/s/ Derek Peterson

Derek Peterson

President and Chief Executive Officer

EX-31.2 3 trtc_ex312.htm CERTIFICATION trtc_ex312.htm

EXHIBIT 31.2

Certifications pursuant to Securities and Exchange Act of 1934

Rule 13a-14 as adopted pursuant to Section 302 of Sarbanes-Oxley Act of 2002

I, Michael C. James, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q of Terra Tech Corp. (the “Registrant”);

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.

The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the Registrant and have:

d.

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

Date: August 8, 2017

By:

/s/ Michael C. James

Michael C. James

Chief Financial Officer

EX-32.1 4 trtc_ex321.htm CERTIFICATION trtc_ex321.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Terra Tech Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 (the “Form 10-Q”), I, Derek Peterson, Chief Executive Officer of the Company, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge, that the Company’s Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2017

By:

/s/ Derek Peterson

Derek Peterson

President and Chief Executive Officer

EX-32.2 5 trtc_ex322.htm CERTIFICATION trtc_ex322.htm

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Terra Tech Corp. (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 (the “Form 10-Q”), I, Michael C. James, Chief Financial Officer of the Company, certify, as of the date hereof, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge, that the Company’s Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q, fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2017

By:

/s/ Michael C. James

Michael C. James

Chief Financial Officer

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Raw materials consist of Edible Gardens herb product lines and material for IVXXs line of cannabis pure concentrates. Work-in-progress consists of live plants grown for Edible Gardens herb product lines and live plants grown at Black Oak. Finished goods consists of IVXXs line of cannabis packaged products to be sold into dispensaries, and Edible Gardens products to be sold via food, drug, and mass channels.   Cost of goods sold is calculated using the average costing method. The Company reviews its inventory periodically to determine NRV. The Company writes down inventory, if required, based on forecasted demand. These factors are impacted by market and economic conditions, new products introductions, and require estimates that may include uncertain elements.      As of June 30, 2017 and December 31, 2016, inventory consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Raw Materials</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,010,401</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">486,119</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Work-in-Progress</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,179,647</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">570,145</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Finished Goods</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">1,043,024</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">853,066</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total Inventory</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,233,072</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,909,330</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Land and Building</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,454,124</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,454,124</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Furniture and Equipment</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,376,758</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,141,244</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Computer Hardware and Software</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">438,210</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">396,479</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Leasehold Improvements</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,458,734</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">7,568,465</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Construction in Progress</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">297,041</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">459,327</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Subtotal</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">14,024,867</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">13,019,639</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less Accumulated Depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(3,443,602</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(2,554,875</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Property, Equipment and Leasehold Improvements, Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">10,581,265</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">10,464,764</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Depreciation expense related to property, equipment and leasehold improvements for the three months ended June 30, 2017 and 2016 was $456,659 and $222,939, respectively, and for the six months ended June 30, 2017 and 2016 was $919,732 and $373,668, respectively.

As of June 30, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Accounts Payable</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,742,666</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,986,907</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Sales Tax Payable</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">360,176</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">122,470</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Accrued Interest Payable</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">110,217</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">96,633</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Accrued Expenses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">1,313,439</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">211,390</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total Accounts Payable and Accrued Expenses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,526,498</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">2,417,400</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, notes payable consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. The remaining balance of the note and accrued interest was converted into common stock in April 2017.</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">64,324</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">500,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">500,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. The remaining balance of the note and accrued interest was converted into common stock in January 2017.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">102,582</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">75,705</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">31,615</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,220,155</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated June 23, 2017, issued to accredited investors, which matures December 23, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.1362, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">736,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total Debt</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,311,995</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,918,676</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less Short-Term Portion</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">575,705</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">564,324</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Long-Term Portion</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">736,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,354,352</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   As of June 30, 2017 and December 31, 2016, total debt was $1,311,995 and $1,918,676, respectively, which included unamortized debt discount of $2,338,005 and $4,295,648, respectively. Senior secured promissory notes are secured by shares of common stock. There was accrued interest payable of $110,217 and $96,633 as of June 30, 2017 and December 31, 2016, respectively.   See Note 16 Subsequent Events for additional disclosure regarding changes in notes payable subsequent to June 30, 2017.      Securities Purchase Agreement Dated June 23, 2017 and 12% Senior Convertible Promissory Note Due December 23, 2018   On June 23, 2017, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company sold to the accredited investor a 12% Senior Convertible Promissory Note due December 23, 2018 (Note A) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (Offering A). There were no fees or expenses deducted from the net proceeds received by the Company in Offering A. Note A and the shares of the Companys common stock, par value $0.001 per share (the Common Stock) issuable upon conversion of Note A are collectively referred to herein as the Securities.   All principal and interest due and owing under Note A is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.1362 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (Conversion Price A), which Conversion Price A is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price of Note A will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.   In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days notice, that the holder convert Note A at Conversion Price A.   The Company may prepay in cash any portion of the outstanding principal amount of Note A and any accrued and unpaid interest by, upon ten (10) days written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note A; (ii) 115% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note A; or (iii) 125% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note A.   Securities Purchase Agreement Dated February 22, 2017 and 12% Senior Convertible Promissory Note Due August 22, 2018   On February 22, 2017, the Company entered into a Securities Purchase Agreement with an accredited investor pursuant to which the Company sold to the accredited investor a 12% Senior Convertible Promissory Note due August 22, 2018 (Note B) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (Offering B). There were no fees or expenses deducted from the net proceeds received by the Company in Offering B. Note B and the shares of the Common Stock issuable upon conversion of Note B are collectively referred to herein as the Securities.   All principal and interest due and owing under Note B is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (Conversion Price B), which Conversion Price B is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. Upon certain events of default, the conversion price of Note B will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. All interest payments under the Note are payable, at the Companys option, in cash or shares of Common Stock.    In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days notice, that the holder convert Note B at Conversion Price B.   The Company may prepay in cash any portion of the outstanding principal amount of Note B and any accrued and unpaid interest by, upon ten (10) days written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note B; (ii) 115% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note B; or (iii) 125% of the sum of the then-outstanding principal amount of Note B plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note B.

For the three and six months ended June 30, 2017 and 2016, the Company had no income tax expense (benefit).   As of June 30, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; text-align: justify">Deferred Income Tax Assets:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Warrants Expense</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">4,832,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">4,186,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Derivatives Expense</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">6,443,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">4,067,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Net Operating Losses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">19,105,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">15,242,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Deferred Income Tax Liabilities:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(1,818,000</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(1,334,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">28,562,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">22,161,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Valuation Allowance</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(28,562,000</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(22,161,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Net Deferred Tax Liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   For the three and six months ended June 30, 2017 and 2016, certain of the Companys subsidiaries produced and sold cannabis or cannabis pure concentrates, subjecting the Company to the limits of IRC Section 280E. Pursuant to IRC Section 280E, the Company is allowed only to deduct expenses directly related to sales of product.   Permanent differences include ordinary and necessary business expenses deemed by the Company as a non-allowable deduction under IRC Section 280E, and tax deductions related to equity compensation that are less than the compensation recognized for financial reporting.   As of June 30, 2017 and December 31, 2016, the Company had net operating loss carryforwards of $42,623,000 and $34,940,000, respectively, which, if unused, will expire beginning in the year 2034. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under Internal Revenue Code (IRC) Section 382, which will limit their utilization. The Company has yet to assess the effect of these limitations, but expects these losses to be substantially limited. Accordingly, the Company has placed a reserve against any assets associated with these losses.   The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2012 to 2015 are subject to examination.   Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred through the period ended June 30, 2017. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future growth. On the basis of this evaluation, as of June 30, 2017, a valuation allowance has been recorded against all deferred tax assets as these assets are more likely than not to be unrealized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

The Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Companys financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of June 30, 2017, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.   The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Terra Techs annual report on Form 10-K for the year ended December 31, 2016.

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: 32 years for buildings; three to eight years for furniture and equipment; and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred.

Intangible assets are stated at historical cost and amortized over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer Relationships</td> <td style="vertical-align: top; width: 2%; text-align: justify"> </td> <td style="vertical-align: top; width: 15%; text-align: center">5 to 12 Years</td> <td style="width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Trade Names</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">2 to 8 Years</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Dispensary License</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">14 Years</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Patent</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">2 Years</td> <td style="text-align: justify"> </td></tr> </table>   We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Intangible assets that have indefinite useful lives are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value.

We recognize revenue in accordance with ASC 605, Revenue Recognition, by recognizing as revenue the fees we charge customers because persuasive evidence of an arrangement exists, the fees we charge are substantially fixed or determinable during the period that we provide the goods or services, we and our customers understand the specific nature and terms of the agreed upon transactions, and payment is made for the goods or services when they have been rendered.   Cannabis Dispensary, Cultivation and Production   We recognize revenue from manufacturing and distribution product sales and upon transfer of title and risk to the customer, which occurs either at shipping (F.O.B. terms), or upon sell through, depending on the arrangement.   Revenue from our retail dispensaries is recognized net of discounts, rebates, promotional adjustments, price adjustments and returns, and net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Revenue is recorded upon transfer of title and risk to the customer, which occurs at the time customers take delivery of our products at our retail dispensaries. Upon purchase, we have no further performance obligations and collection is assured as sales are paid for at time of purchase.   Revenue related to the sale of consignment inventory is not recognized until the product is pulled from inventory and sold directly to end-customers. We recognize revenue from the sale of consignment inventory on a gross basis, as we have determined that: 1) we are the primary obligor to the customer; 2) we have latitude in establishing the sales prices and profit margins of our products; 3) we have discretion in selecting our suppliers; 4) we are responsible for loss or damage to consigned inventory; and 5) our customer validation process performs an important part of the process of providing such products to authorized customers. We believe that these factors outweigh the fact that we do not have title to the consigned inventory prior to its sale.   Herbs and Produce Products   We recognize revenue from products grown in our greenhouses and sold net of discounts, rebates, promotional adjustments, price adjustments, and estimated returns and upon transfer of title and risk to the customer, which occurs at shipping (F.O.B. terms). Upon shipment, we have no further performance obligations, selling price is fixed, and collection is reasonably assured.

Cannabis Dispensary, Cultivation and Production   Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, other expenses for services, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. It also includes the cost incurred in producing the oils, waxes, shatters, and clears sold by IVXX.   Herbs and Produce Products   Cost of goods sold are for the plants grown, packaging, other supplies and purchased plants that are sold into the retail marketplace by Edible Garden. Other expenses include freight, allocations of rent, repairs and maintenance, and utilities.

Research and development costs are expensed as incurred.

We provide for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2017 and December 31, 2016, such net operating losses were offset entirely by a valuation allowance.   The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.

In accordance with the provisions of ASC 260, Earnings Per Share, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2017 and 2016. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for both periods.

We have adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification (ASC) for our long-lived assets. Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

As of June 30, 2017 and December 31, 2016, inventory consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Raw Materials</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,010,401</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">486,119</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Work-in-Progress</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,179,647</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">570,145</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Finished Goods</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">1,043,024</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">853,066</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total Inventory</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,233,072</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,909,330</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following:  	 <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Land and Building</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,454,124</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,454,124</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Furniture and Equipment</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,376,758</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">3,141,244</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Computer Hardware and Software</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">438,210</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">396,479</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Leasehold Improvements</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,458,734</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">7,568,465</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Construction in Progress</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">297,041</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">459,327</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Subtotal</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">14,024,867</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">13,019,639</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less Accumulated Depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(3,443,602</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(2,554,875</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Property, Equipment and Leasehold Improvements, Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">10,581,265</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">10,464,764</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Accounts Payable</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,742,666</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,986,907</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Sales Tax Payable</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">360,176</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">122,470</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Accrued Interest Payable</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">110,217</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">96,633</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Accrued Expenses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">1,313,439</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">211,390</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total Accounts Payable and Accrued Expenses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,526,498</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">2,417,400</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, notes payable consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. The remaining balance of the note and accrued interest was converted into common stock in April 2017.</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">64,324</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">500,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">500,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. The remaining balance of the note and accrued interest was converted into common stock in January 2017.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">102,582</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">75,705</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">31,615</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,220,155</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Senior convertible promissory note dated June 23, 2017, issued to accredited investors, which matures December 23, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.1362, subject to adjustment.</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">736,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total Debt</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,311,995</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,918,676</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less Short-Term Portion</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">575,705</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">564,324</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Long-Term Portion</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">736,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,354,352</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell">Fair Value at June 30,</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="10" style="border-bottom: black 1pt solid; text-align: center">Fair Value Measurement Using</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1pt solid; text-align: justify">Description</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 1</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 2</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 3</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Derivative Liabilities Conversion Feature</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right">3,163,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right">3,163,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="text-align: center">Fair Value at December 31, </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="8" style="border-bottom: black 1pt solid; text-align: center">Fair Value Measurement Using</td> <td style="text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; border-bottom: black 1pt solid">Description</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">2016</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Level 1</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 2</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 3</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Derivative Liabilities Conversion Feature</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Liability Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">12,085,859</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">12,085,859</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">19,072,859</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">19,072,859</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

As of June 30, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">December 31, 2016</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; text-align: justify">Deferred Income Tax Assets:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Warrants Expense</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">4,832,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">4,186,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Derivatives Expense</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">6,443,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">4,067,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Net Operating Losses</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">19,105,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">15,242,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Deferred Income Tax Liabilities:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(1,818,000</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(1,334,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">28,562,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">22,161,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Valuation Allowance</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(28,562,000</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(22,161,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Net Deferred Tax Liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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Operating Lease Commitments   The Company leases certain business facilities under operating lease agreements that specify minimum rentals. Many of these have renewal provisions. The Companys net rent expense for the three months ended June 30, 2017 and 2016 was $312,254 and $298,092, respectively, and for the six months ended June 30, 2017 and 2016 was $627,067 and $431,959, respectively.   Production Operating Agreement   On May 23, 2017, the Company entered into a one-year operating agreement with Panther Gap Farms pursuant to which Panther Gap Farms will grow up to approximately one metric ton of the Companys IVXX cannabis annually. The operating agreement is renewable for up to three additional terms of one year each. The agreement also requires the Company to issue common stock, with a value of $1,150,000, upon execution of the agreement, which the Company had not issued as of June 30, 2017. In addition to the common stock, the Company is required to issue common stock for the profit share of the cannabis ultimately sold by the Company upon execution of the agreement. The shares to be received by Panther Gap Farms under the profit share agreement are dependent on the ultimate profit recognized by the Company when the cannabis product is sold. As of June 30, 2017, the Company has not issued the required shares.   The Company and Panther Gap Farms also entered into a lease agreement pursuant to which the Company leases the property on which the cannabis is grown. The lease agreement requires monthly payments of $30,000 for eight months and is also renewable for up to three additional terms of one year each.

Non-controlling interest is shown as a component of shareholders equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations.

We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its current estimated net realizable value (NRV). ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, defines NRV as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods.

Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized for accounting purposes.    We review the goodwill allocated to each of our reporting units for possible impairment annually on August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting units carrying amount, including goodwill, to the estimated fair value of the reporting unit.

Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.

The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, Compensation, which requires fair value measurement on the grant date and recognition of compensation expense for all share-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations.

ASC 815-40, Contracts in Entitys Own Equity, requires freestanding contracts that are settled in a companys own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of ASC 815-40, a contract designated as an asset or a liability must be carried at fair value on a companys balance sheet, with any changes in fair value recorded in the companys results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments are required from period to period.   ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the balance sheet at fair value. Furthermore, ASC 815 precludes contracts issued or held by a reporting entity that are both (1) indexed to its own stock and (2) classified as stockholders equity in its statement of financial position from being treated as derivative instruments.

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="width: 51%; text-align: justify">Customer Relationships</td> <td style="width: 1%; text-align: justify"> </td> <td style="width: 48%; text-align: center">5 to 12 Years</td></tr> <tr style="vertical-align: top; background-color: white"> <td style="text-align: justify">Trade Names</td> <td style="text-align: justify"> </td> <td style="text-align: center">2 to 8 Years</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="text-align: justify">Dispensary License</td> <td style="text-align: justify"> </td> <td style="text-align: center">14 Years</td></tr> <tr style="vertical-align: top; background-color: white"> <td style="text-align: justify">Patent</td> <td style="text-align: justify"> </td> <td style="text-align: center">2 Years</td></tr> </table>

A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="14" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">For the Three Months Ended</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom-style: solid; border-bottom-width: 1pt">Type of Award</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Options</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">8,250,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">157,430</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">47,589</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Grants:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Employees (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,535,780</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">294,632</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Series B Preferred Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Directors (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,090,909</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">184,473</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">NonEmployee Consultants (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">2,391,358</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">446,348</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total Stock-Based Compensation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">13,268,047</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,082,883</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">47,589</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table> A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="14" style="border-bottom: black 1pt solid; text-align: center">For the Six Months Ended</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1pt solid">Type of Award</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Options</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">8,250,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">205,019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,700,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">95,178</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Grants:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,635,780</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">320,732</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Series B Preferred Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">600,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,035,406</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Directors (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,215,909</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">221,973</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">350,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">60,550</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">NonEmployee Consultants (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">2,859,005</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">591,359</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">70,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">20,727</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total StockBased Compensation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">14,560,694</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">2,374,489</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">7,120,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">176,455</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Change in Fair Market Value of Conversion Feature</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,597,950</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Derivative Debt Converted into Equity</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(5,672,050</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Issuance of Debt Instruments with Derivatives</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">4,446,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

12085859

12754553

16434620

-4991571

4991571

-4991571

1100000

4991571

Preferred Stock   Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Companys common stock.   Each share of Series B Preferred Stock: (i) is entitled to 100 votes for each share of common stock into which a share of Series B Preferred Stock is convertible and (ii) is convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of the Companys common stock.   See Note 16 Subsequent Events for additional disclosure regarding changes to the Companys Series B Preferred Stock subsequent to June 30, 2017.   During the six months ended June 30, 2017, the Company issued 600,000 shares of Series B Preferred Stock for compensation in the amount of $1,035,406.   During the six months ended June 30, 2017, the Company cancelled 4,279,841 shares of Series B Preferred Stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See Note 9 Contingent Consideration Liability for further information.   Common Stock   During the six months ended June 30, 2017, senior secured convertible promissory notes and accrued interest in the amount of $8,839,084 were converted into 50,710,473 shares of common stock.   During the six months ended June 30, 2017, the Company issued 17,674,027 shares of common stock for cash in the amount of $3,750,000 pursuant to an equity financing facility with an accredited investor.   During the six months ended June 30, 2017, the Company issued 1,215,909 shares of common stock for director fees in the amount of $221,973, issued 2,859,005 shares of common stock for services performed in the amount of $591,359 and issued 1,635,780 shares of common stock for compensation in the amount of $320,732.   During the six months ended June 30, 2017, the Company cancelled 9,291,744 shares of common stock that had been previously issued and held in escrow in connection with the contingent consideration related to the Black Oak acquisition. See Note 9 Contingent Consideration Liability for further information.   During the six months ended June 30, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock.   During the six months ended June 30, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor.     Stock-Based Compensation Expense   A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="14" id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">For the Three Months Ended</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom-style: solid; border-bottom-width: 1pt">Type of Award</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Options</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">8,250,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">157,430</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">47,589</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Grants:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Employees (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,535,780</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">294,632</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Series B Preferred Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Directors (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,090,909</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">184,473</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">NonEmployee Consultants (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">2,391,358</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">446,348</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total Stock-Based Compensation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">13,268,047</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">1,082,883</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">47,589</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="14" style="border-bottom: black 1pt solid; text-align: center">For the Six Months Ended</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="6" style="border-bottom: black 1pt solid; text-align: center">June 30, 2016</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1pt solid">Type of Award</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Number of Shares or Options Granted</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Stock-Based Compensation Expense</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Options</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">8,250,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">205,019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,700,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">95,178</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Stock Grants:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,635,780</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">320,732</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Employees (Series B Preferred Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">600,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,035,406</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Directors (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">1,215,909</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">221,973</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">350,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">60,550</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">NonEmployee Consultants (Common Stock)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">2,859,005</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">591,359</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">70,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">20,727</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total StockBased Compensation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">14,560,694</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">2,374,489</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">7,120,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">176,455</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

The Companys operating and reportable segments are currently organized around the following products that it offers as part of its core business strategy:   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr> <td style="width: 4%"> </td> <td style="vertical-align: top; width: 4%">·</td> <td style="vertical-align: top">Herbs and Produce Products Includes herbs and leafy greens that are grown using classic Dutch hydroponic farming methods.</td></tr> <tr> <td> </td> <td> </td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: top">·</td> <td style="vertical-align: top">Cannabis Dispensary, Cultivation and Production Includes cannabis-focused retail, cultivation and production.</td></tr> </table>     These two reportable segments, which are described in greater detail below, had previously been reported on a combined basis as they had been operated and evaluated as one operating segment. The Company experienced significant growth over the last few years in most of our product areas. As the Company has grown organically, and as the Company previously added to its capabilities through acquisitions, its products have increased in scale and become more strategically important and distinctly organized and managed under these two groupings. In addition, Derek Peterson, the Companys Chief Operating Decision Maker (CODM), reviews results, manages and allocates resources between these two strategic business groupings, and budgets using these business segments. The Companys CODM reviews revenues including intersegment revenues, gross profit and operating income (loss) before income taxes when evaluating segment performance and allocating resources to each segment. Accordingly, intersegment revenue is included in the segment revenues presented in the tables below and is eliminated from revenues and cost of goods sold in the Eliminations and Other column. The Eliminations and Other column also includes various income and expense items that the Company does not allocate to its operating segments. These income and expense amounts include the results of the Companys hydroponic equipment, which are not material, interest income, interest expense, corporate overhead, and corporate-wide expense items such as legal and professional fees as well as expense items for which we have not identified a reasonable basis for allocation. The accounting policies of the reportable segments are the same as those described in Note 2 - Summary of Significant Accounting Policies of the Notes to Unaudited Consolidated Financial Statements.   Herbs and Produce Products   Either independently or in conjunction with third parties, we are a retail seller of locally grown hydroponic herbs, produce, and floral products, which are distributed through major grocery stores throughout the East and Midwest regions of the U.S.   Cannabis Dispensary, Cultivation and Production   Either independently or in conjunction with third parties, we operate medical marijuana retail dispensaries, medical marijuana cultivation and production facilities in California and Nevada. We own real property in Nevada on which we plan to build a medical marijuana dispensary. All of our retail dispensaries in California and Nevada offer a broad selection of medical cannabis products including flowers, concentrates and edibles. We also produce and sell a line of medical cannabis flowers, as well as a line of medical cannabis-extracted products, which include concentrates, cartridges, vape pens and wax products.     Summarized financial information concerning the Companys reportable segments is shown in the following tables. Total assets at June 30, 2017 and 2016 exclude intercompany receivable balances eliminated in consolidation.   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" id="hdcell" style="border-bottom: black 1px solid; text-align: center">For the Three Months Ended June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td id="ffcell" colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">1,777,067</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">6,049,319</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">16,487</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">7,842,873</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,325,729</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,010,771</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,336,500</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">451,338</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,038,548</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">16,487</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,506,373</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">855,999</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,210,475</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,962,813</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,029,287</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(404,661</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,171,927</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(2,946,326</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(4,522,914</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(515,654</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(515,654</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,639,137</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,639,137</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Gain on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">987,200</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">987,200</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Expense</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(130,510</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(130,510</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px">Loss on Fair Market Valuation of Contingent Consideration</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">(77,286</td> <td>)</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">(77,286</td> <td>)</td></tr> <tr style="background-color: #ffffff"> <td style="padding-left: 15px">Gain on Settlement of Contingent Consideration</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">4,991,571</td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">4,991,571</td> <td> </td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,914,285</td> <td style="padding-bottom: 1px; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,298,101</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">3,616,184</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(404,661</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">3,742,358</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(4,244,427</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(906,730</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2017</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">7,104,469</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">60,224,138</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">9,550,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">76,878,669</td> <td style="vertical-align: bottom"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Three Months Ended June 30, 2016</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">5,873,418</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">3,768,977</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">57,514</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">9,699,909</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,517,052</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,596,035</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">39,848</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">8,152,935</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">356,366</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,172,942</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">17,666</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,546,974</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">756,405</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,649,452</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,958,494</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,364,351</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(400,039</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(476,510</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(2,940,828</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,817,377</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(218,126</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(218,126</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss from Derivatives Issued with Debt Greater than Debt Carrying Value</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Loss on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(206,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(206,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(60,815</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(60,565</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(972,941</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(972,691</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(400,039</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(476,260</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(3,913,769</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(4,790,068</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2016</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">6,834,863</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">57,142,755</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">2,784,814</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">66,762,432</td> <td style="vertical-align: bottom"> </td></tr> </table>    <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Six Months Ended June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">2,694,210</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">11,936,357</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">36,762</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">14,667,329</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,295,544</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">10,506,349</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">12,801,893</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">398,666</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,430,008</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">36,762</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,865,436</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,515,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,837,480</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,063,045</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">12,415,587</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,116,396</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,407,472</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(6,026,283</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(10,550,151</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,126,270</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,126,270</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(2,678,595</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(2,678,595</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Gain on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">2,597,950</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">2,597,950</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Expense</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(288,343</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(288,343</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px">Loss on Fair Market Valuation of Contingent Consideration</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(4,426,047</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(4,426,047</td> <td>)</td></tr> <tr style="background-color: #ffffff"> <td style="padding-left: 15px">Gain on Settlement of Contingent Consideration</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">4,991,571</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">4,991,571</td> <td> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">565,524</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,495,258</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(929,734</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(1,116,396</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(2,841,948</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(7,521,541</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(11,479,885</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2017</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">7,104,469</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">60,224,138</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">9,550,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">76,878,669</td> <td style="vertical-align: bottom"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Six Months Ended June 30, 2016</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">7,274,861</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">3,899,180</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">74,035</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">11,248,076</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,837,431</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,809,296</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">39,848</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">9,686,575</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">437,430</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,089,884</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">34,187</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,561,501</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,155,610</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,851,588</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,284,054</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">7,291,252</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(718,180</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(761,704</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(4,249,867</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(5,729,751</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(312,532</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(312,532</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(920,797</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(920,797</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Loss from Derivatives Issued with Debt Greater than Debt Carrying Value</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,366,700</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,366,700</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Interest Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(116,810</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(116,560</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,204,839</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,204,589</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(718,180</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(761,454</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(7,454,706</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(8,934,340</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Assets at June 30, 2016</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">6,834,863</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">57,142,755</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">2,784,814</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">66,762,432</td> <td style="vertical-align: bottom"> </td></tr> </table>

Summarized financial information concerning the Companys reportable segments is shown in the following tables. Total assets at June 30, 2017 and 2016 exclude intercompany receivable balances eliminated in consolidation.   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" id="hdcell" style="border-bottom: black 1px solid; text-align: center">For the Three Months Ended June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td id="ffcell" colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">1,777,067</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">6,049,319</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">16,487</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">7,842,873</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,325,729</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,010,771</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,336,500</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">451,338</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,038,548</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">16,487</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,506,373</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">855,999</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,210,475</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,962,813</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,029,287</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(404,661</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,171,927</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(2,946,326</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(4,522,914</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(515,654</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(515,654</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,639,137</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,639,137</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Gain on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">987,200</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">987,200</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Expense</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(130,510</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(130,510</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px">Loss on Fair Market Valuation of Contingent Consideration</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">(77,286</td> <td>)</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">(77,286</td> <td>)</td></tr> <tr style="background-color: #ffffff"> <td style="padding-left: 15px">Gain on Settlement of Contingent Consideration</td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">4,991,571</td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right"></td> <td> </td> <td> </td> <td style="border-bottom: black 1px solid"> </td> <td style="border-bottom: black 1px solid; text-align: right">4,991,571</td> <td> </td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,914,285</td> <td style="padding-bottom: 1px; vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,298,101</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">3,616,184</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(404,661</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">3,742,358</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(4,244,427</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(906,730</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2017</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">7,104,469</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">60,224,138</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">9,550,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">76,878,669</td> <td style="vertical-align: bottom"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Three Months Ended June 30, 2016</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">5,873,418</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">3,768,977</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">57,514</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">9,699,909</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,517,052</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,596,035</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">39,848</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">8,152,935</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">356,366</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,172,942</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">17,666</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,546,974</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">756,405</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,649,452</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,958,494</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">5,364,351</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(400,039</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(476,510</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(2,940,828</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,817,377</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(218,126</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(218,126</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss from Derivatives Issued with Debt Greater than Debt Carrying Value</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Loss on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(206,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(206,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(60,815</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(60,565</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(972,941</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(972,691</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(400,039</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(476,260</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(3,913,769</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(4,790,068</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2016</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">6,834,863</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">57,142,755</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">2,784,814</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">66,762,432</td> <td style="vertical-align: bottom"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Six Months Ended June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">2,694,210</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">11,936,357</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">36,762</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">14,667,329</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,295,544</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">10,506,349</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">12,801,893</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">398,666</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,430,008</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">36,762</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,865,436</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,515,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,837,480</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,063,045</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">12,415,587</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,116,396</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,407,472</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(6,026,283</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(10,550,151</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,126,270</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,126,270</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(2,678,595</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(2,678,595</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Gain on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">2,597,950</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">2,597,950</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Interest Expense</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(288,343</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(288,343</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="padding-left: 15px">Loss on Fair Market Valuation of Contingent Consideration</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(4,426,047</td> <td>)</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">(4,426,047</td> <td>)</td></tr> <tr style="background-color: #ffffff"> <td style="padding-left: 15px">Gain on Settlement of Contingent Consideration</td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">4,991,571</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"></td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">4,991,571</td> <td> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">565,524</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(1,495,258</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(929,734</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(1,116,396</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(2,841,948</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(7,521,541</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(11,479,885</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Total Assets at June 30, 2017</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">7,104,469</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">60,224,138</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">9,550,062</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">76,878,669</td> <td style="vertical-align: bottom"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; font-size-adjust: none; font-stretch: normal; width: 100%"> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="14" style="border-bottom: black 1px solid; text-align: center">For the Six Months Ended June 30, 2016</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Herbs and Produce Products</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Cannabis Dispensary, Cultivation and Production</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Eliminations and Other</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1px solid; text-align: center">Total</td> <td> </td></tr> <tr> <td> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Revenues</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">7,274,861</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">3,899,180</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">74,035</td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%"> </td> <td style="vertical-align: bottom; width: 1%">$</td> <td style="vertical-align: bottom; text-align: right; width: 9%">11,248,076</td> <td style="vertical-align: bottom; width: 1%"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Cost of Goods Sold</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">6,837,431</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">2,809,296</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">39,848</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">9,686,575</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Gross Profit</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">437,430</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,089,884</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">34,187</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">1,561,501</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Selling, General and Administrative Expenses</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,155,610</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">1,851,588</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">4,284,054</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">7,291,252</td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Loss from Operations</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(718,180</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(761,704</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(4,249,867</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(5,729,751</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top">Other Income (Expense):</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Amortization of Debt Discount</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(312,532</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(312,532</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Extinguishment of Debt</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(920,797</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(920,797</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Loss from Derivatives Issued with Debt Greater than Debt Carrying Value</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(488,000</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td style="vertical-align: top; padding-left: 15px">Loss on Fair Market Valuation of Derivatives</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,366,700</td> <td style="vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right">(1,366,700</td> <td style="vertical-align: bottom">)</td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 15px">Interest Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(116,810</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(116,560</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top; padding-left: 45px">Total Other Income (Expense)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">250</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,204,839</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom"> </td> <td style="border-bottom: black 1px solid; vertical-align: bottom; text-align: right">(3,204,589</td> <td style="padding-bottom: 1px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Loss Before Provision for Income Taxes</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(718,180</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(761,454</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(7,454,706</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td> <td style="vertical-align: bottom"> </td> <td style="border-bottom: black 3px double; vertical-align: bottom">$</td> <td style="border-bottom: black 3px double; vertical-align: bottom; text-align: right">(8,934,340</td> <td style="padding-bottom: 3px; vertical-align: bottom">)</td></tr> <tr style="background-color: #ffffff"> <td> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom"> </td></tr> <tr style="background-color: #cceeff"> <td style="vertical-align: top">Total Assets at June 30, 2016</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">6,834,863</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">57,142,755</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">2,784,814</td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom"> </td> <td style="vertical-align: bottom">$</td> <td style="vertical-align: bottom; text-align: right">66,762,432</td> <td style="vertical-align: bottom"> </td></tr> </table>

We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:   Level 1 Quoted prices in active markets for identical assets or liabilities.   Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   Level 3 Inputs that are generally unobservable and typically reflect managements estimate of assumptions that market participants would use in pricing the asset or liability.   In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. We have not elected the fair value option for any eligible financial instruments.

FASB ASU 2017-04 (Topic 350), Intangibles - Goodwill and Others Issued in January 2017, ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting units goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. We are currently evaluating the effect that ASU 2017-04 will have on our consolidated financial statements and related disclosures.   FASB ASU 2017-01 (Topic 805), Business Combinations: Clarifying the Definition of a Business Issued in January 2017, ASU 2017-01 revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on our consolidated financial statements.   FASB ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) Issued in August 2016, the amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company has not yet completed the analysis of how adopting this guidance will affect its consolidated financial statements.     FASB ASU No. 2016-02 (Topic 842), Leases Issued in February 2016, ASU No. 2016-02 will require entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new standard also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new standard will be effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.   FASB ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers Issued in May 2014, ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This amendment defers the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016- 08, Principal versus Agent Considerations (Reporting Gross versus Net), which amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers and 2016-12, Narrow-Scope Improvements and Practical Expedients, both of which provide additional clarification of certain provisions in Topic 606. These ASC updates are effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. Early adoption is permitted only as of annual reporting periods after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently in the process of evaluating all revenue streams, accounting policies, practices and reporting to identify and understand any impact on our consolidated financial statements.

Basis of Presentation   The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017.   The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Terra Techs annual report on Form 10-K for the year ended December 31, 2016.    Non-Controlling Interest   Non-controlling interest is shown as a component of shareholders equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations.   Use of Estimates   The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.   Reclassifications   Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss and shareholders equity.   Inventory   We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its current estimated net realizable value (NRV). ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, defines NRV as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods.   Prepaid Expenses   Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance and service contracts requiring up-front payments.   Property, Equipment and Leasehold Improvements   Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: 32 years for buildings; three to eight years for furniture and equipment; and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred.   Goodwill   Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized for accounting purposes.    We review the goodwill allocated to each of our reporting units for possible impairment annually as of August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting units carrying amount, including goodwill, to the estimated fair value of the reporting unit.   Intangibles   Intangible assets are stated at historical cost and amortized over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Customer Relationships</td> <td style="vertical-align: top; width: 2%; text-align: justify"> </td> <td style="vertical-align: top; width: 15%; text-align: center">5 to 12 Years</td> <td style="width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Trade Names</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">2 to 8 Years</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Dispensary License</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">14 Years</td> <td style="text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Patent</td> <td style="vertical-align: top; text-align: justify"> </td> <td style="vertical-align: top; text-align: center">2 Years</td> <td style="text-align: justify"> </td></tr> </table>   We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Intangible assets that have indefinite useful lives are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value.   Impairment of Long-Lived Assets   We have adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification (ASC) for our long-lived assets. Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.   Other Assets   Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.     Revenue Recognition   We recognize revenue in accordance with ASC 605, Revenue Recognition, by recognizing as revenue the fees we charge customers because persuasive evidence of an arrangement exists, the fees we charge are substantially fixed or determinable during the period that we provide the goods or services, we and our customers understand the specific nature and terms of the agreed upon transactions, and payment is made for the goods or services when they have been rendered.   Cannabis Dispensary, Cultivation and Production   We recognize revenue from manufacturing and distribution product sales and upon transfer of title and risk to the customer, which occurs either at shipping (F.O.B. terms), or upon sell through, depending on the arrangement.   Revenue from our retail dispensaries is recognized net of discounts, rebates, promotional adjustments, price adjustments and returns, and net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Revenue is recorded upon transfer of title and risk to the customer, which occurs at the time customers take delivery of our products at our retail dispensaries. Upon purchase, we have no further performance obligations and collection is assured as sales are paid for at time of purchase.   Revenue related to the sale of consignment inventory is not recognized until the product is pulled from inventory and sold directly to end-customers. We recognize revenue from the sale of consignment inventory on a gross basis, as we have determined that: 1) we are the primary obligor to the customer; 2) we have latitude in establishing the sales prices and profit margins of our products; 3) we have discretion in selecting our suppliers; 4) we are responsible for loss or damage to consigned inventory; and 5) our customer validation process performs an important part of the process of providing such products to authorized customers. We believe that these factors outweigh the fact that we do not have title to the consigned inventory prior to its sale.   Herbs and Produce Products   We recognize revenue from products grown in our greenhouses and sold net of discounts, rebates, promotional adjustments, price adjustments, and estimated returns and upon transfer of title and risk to the customer, which occurs at shipping (F.O.B. terms). Upon shipment, we have no further performance obligations, selling price is fixed, and collection is reasonably assured.   Cost of Goods Sold   Cannabis Dispensary, Cultivation and Production   Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, other expenses for services, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. It also includes the cost incurred in producing the oils, waxes, shatters, and clears sold by IVXX.   Herbs and Produce Products   Cost of goods sold are for the plants grown, packaging, other supplies and purchased plants that are sold into the retail marketplace by Edible Garden. Other expenses include freight, allocations of rent, repairs and maintenance, and utilities.     Stock-Based Compensation   The Company accounts for its stock-based awards in accordance with ASC Subtopic 718-10, Compensation, which requires fair value measurement on the grant date and recognition of compensation expense for all share-based payment awards made to employees and directors, including restricted stock awards. For stock options, the Company estimates the fair value using a closed option valuation (Black-Scholes) model. The fair value of restricted stock awards is based upon the quoted market price of the common shares on the date of grant. The fair value is then expensed over the requisite service periods of the awards, net of estimated forfeitures, which is generally the performance period and the related amount is recognized in the consolidated statements of operations.   Warrants   ASC 815-40, Contracts in Entitys Own Equity, requires freestanding contracts that are settled in a companys own stock, including common stock warrants, to be designated as an equity instrument, asset or a liability. Under the provisions of ASC 815-40, a contract designated as an asset or a liability must be carried at fair value on a companys balance sheet, with any changes in fair value recorded in the companys results of operations. A contract designated as an equity instrument must be included within equity, and no fair value adjustments are required from period to period.   ASC 815, Derivatives and Hedging, requires all derivatives to be recorded on the balance sheet at fair value. Furthermore, ASC 815 precludes contracts issued or held by a reporting entity that are both (1) indexed to its own stock and (2) classified as stockholders equity in its statement of financial position from being treated as derivative instruments.   Research and Development   Research and development costs are expensed as incurred.   Income Taxes   We provide for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2017 and December 31, 2016, such net operating losses were offset entirely by a valuation allowance.   The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.   Loss Per Common Share   In accordance with the provisions of ASC 260, Earnings Per Share, net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2017 and 2016. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for both periods.    Fair Value of Financial Instruments   We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:   Level 1 Quoted prices in active markets for identical assets or liabilities.   Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.   Level 3 Inputs that are generally unobservable and typically reflect managements estimate of assumptions that market participants would use in pricing the asset or liability.   In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. We have not elected the fair value option for any eligible financial instruments.   Recently Issued Accounting Standards   FASB ASU 2017-04 (Topic 350), Intangibles - Goodwill and Others Issued in January 2017, ASU 2017-04 simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting units goodwill with the carrying amount of that goodwill. ASU 2017-04 is effective for annual periods beginning after December 15, 2019 including interim periods within those periods. We are currently evaluating the effect that ASU 2017-04 will have on our consolidated financial statements and related disclosures.   FASB ASU 2017-01 (Topic 805), Business Combinations: Clarifying the Definition of a Business Issued in January 2017, ASU 2017-01 revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. This guidance will be effective for the Company in the first fiscal quarter of 2018 on a prospective basis, and early adoption is permitted. The Company does not expect the standard to have a material impact on our consolidated financial statements.   FASB ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) Issued in August 2016, the amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period. The Company has not yet completed the analysis of how adopting this guidance will affect its consolidated financial statements.     FASB ASU No. 2016-02 (Topic 842), Leases Issued in February 2016, ASU No. 2016-02 will require entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new standard also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new standard will be effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.   FASB ASU No. 2014-09 (Topic 606), Revenue from Contracts with Customers Issued in May 2014, ASU 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This amendment defers the effective date of ASU 2014-09 by one year. In March 2016, the FASB issued ASU 2016- 08, Principal versus Agent Considerations (Reporting Gross versus Net), which amends the principal versus agent guidance and clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer. In addition, the FASB issued ASU Nos. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers and 2016-12, Narrow-Scope Improvements and Practical Expedients, both of which provide additional clarification of certain provisions in Topic 606. These ASC updates are effective for annual reporting periods beginning after December 15, 2017, but early adoption is permitted. Early adoption is permitted only as of annual reporting periods after December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. We are currently in the process of evaluating all revenue streams, accounting policies, practices and reporting to identify and understand any impact on our consolidated financial statements.

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Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss and shareholders equity.

Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance and service contracts requiring up-front payments.

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The shorter of the estimated useful life or the underlying lease term for leasehold improvements

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Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement.

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Conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (the Conversion Price), which Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection.

convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.1362 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (ÂConversion Price AÂ), which Conversion Price A is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection.

2018-08-22

2018-12-23

The conversion price of the Note will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. All interest payments under the Note are payable, at the Companys option, in cash or shares of Common Stock.

The conversion price of Note A will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.

2500000 2500000 In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days notice, that the holder convert Note B at Conversion Price B. In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) days notice, that the holder convert Note A at Conversion Price A. The Company may prepay in cash any portion of the outstanding principal amount of the Note and any accrued and unpaid interest by, upon ten (10) days' written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the Note; (ii) 115% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the Note; or (iii) 125% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the Note. The Company may prepay in cash any portion of the outstanding principal amount of Note A and any accrued and unpaid interest by, upon ten (10) days written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note A; (ii) 115% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note A; or (iii) 125% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note A. 15305463 19072859 19072859 3163000 3163000

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1215909

2859005

6700000

350000

70000

8250000

1535780

1090909

2391358

2374489

176455

47589

1082883

205019

320732

1035406

221973

591359

95178

60550

20727

157430

294632

184473

446348

47589

100

1-for-5.384325537

5519660

600000

1215909

1150000

1250000

1035406

221973

4279841

50710473

13906149

15738463

8839084

961740

2092492

25715674

17674027

3208134

3750000

2859005

1635780

591359

320732

627067

431959

298092

312254

-1639137

-2678595

-920797

6834863 57142755 2784814 66762432 7104469 60224138 9550062 76878669 7104469 60224138 9550062 76878669 6834863 57142755 2784814 66762432

2597950

-1366700

-206000

987200

The Company maintains cash balances in several financial institutions that are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Companys cash balance exceeds these federal limitations.   The Company provides credit in the normal course of business to customers located throughout the U.S. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

4739638 4739638 4692697 4692697 -2088000 77286 4348761 16500000 4789638 2100000

14400000

34200000 35100000 34200000 30000

The lease agreement requires monthly payments of $30,000 for eight months and is also renewable for up to three additional terms of one year each.

117648

Certificate of Amendment to the Certificate of Designation of the Companys Series B Preferred Stock   On July 26, 2017, the Company filed a Certificate of Amendment to the Certificate of Designation of the Companys Series B Preferred Stock (the Amendment) with the Secretary of State of the State of Nevada to provide for an adjustment of the Conversion Rate of the Companys Series B Preferred Stock in the event of a reverse stock split or combination in the same ratio as the Companys common stock. A copy of the Amendment was filed as Exhibit 3.14 to the Companys Current Report on Form 8-K dated July 26, 2017.   Put on Equity Financing Facility   Subsequent to June 30, 2017, the Company sold 5,519,660 shares of common stock for the net amount of $1,250,000 pursuant to an equity financing facility with an accredited investor.   Debt and Interest Converted into Equity   Subsequent to June 30, 2017, senior convertible promissory notes and accrued interest in the amount of $2,092,492 were converted into 15,738,463 shares of common stock.   Employee Stock-Based Compensation   Subsequent to June 30, 2017, the Company issued 117,648 shares of common stock for employee stock-based compensation.

Organization   References in the Notes to Unaudited Consolidated Financial Statements to the Company, Terra Tech, we, us, or our are intended to mean Terra Tech Corp., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis.   Through MediFarm, LLC, a Nevada limited liability company (MediFarm), MediFarm I, LLC, a Nevada limited liability company (MediFarm I), and MediFarm II, LLC, a Nevada limited liability company (MediFarm II), subsidiaries in which the Company owns interests, the Company operates and/or plans to operate medical marijuana dispensary facilities, cultivation, and production facilities in Nevada. Through IVXX, LLC, a Nevada limited liability company (IVXX LLC), and IVXX, Inc., a California corporation (IVXX Inc.; together with IVXX LLC, IVXX), the Companys wholly-owned subsidiary, the Company produces and sells a line of cannabis flowers, as well as a line of cannabis pure concentrates. Most recently, the Company formed another subsidiary, MediFarm I Real Estate, LLC, a Nevada limited liability company (MediFarm I RE), which owns the real property on which a medical marijuana dispensary will be constructed. The dispensary will be operated by MediFarm I. Through Black Oak Gallery, a California corporation (Black Oak), we operate a medical marijuana retail dispensary, a medical marijuana cultivation facility, and have a second medical marijuana cultivation facility in the early stages of construction, all in Oakland, California. The Company is a wholesale seller of locally grown hydroponic produce, herbs and floral products through its wholly-owned subsidiary, Edible Garden Corp., a Nevada corporation (Edible Garden).   On April 1, 2016, the Company acquired Black Oak. Black Oak operates a medical marijuana retail dispensary in Oakland, California under the name Blüm, pursuant to that certain Agreement and Plan of Merger, dated December 23, 2015 (the Merger Agreement), with Generic Merger Sub, Inc., a California corporation and our wholly-owned subsidiary, and Black Oak.   Since the Merger was completed on April 1, 2016, Black Oaks financial results are included in our unaudited consolidated financial statements subsequent to that date.

During April 2017, in final settlement of the contingent consideration, the Company issued approximately $4.7 million in shares of its common stock, or common stock equivalent of approximately 18.1 million shares of its common stock, and made a cash payment of approximately $2.1 million. A summary is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Balance at March 31, 2017</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">16,434,620</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">77,286</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Payment of Contingent Consideration in Cash</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,088,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,739,638</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,692,697</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Gain on Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(4,991,571</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">Amount</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; text-align: justify">Contingent Consideration Summary</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">12,085,859</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">4,348,761</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Balance at March 31, 2017 and April 1, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">16,434,620</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Detail</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Performance-Based Cash Contingent Consideration </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">2,088,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Market-Based Stock Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">14,346,620</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">16,434,620</td> <td style="vertical-align: bottom; text-align: justify"></td></tr> </table>

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis    The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell">Fair Value at June 30,</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="10" style="border-bottom: black 1pt solid; text-align: center">Fair Value Measurement Using</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1pt solid; text-align: justify">Description</td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">2017</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 1</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 2</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 3</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Derivative Liabilities Conversion Feature</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right">3,163,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; width: 9%; text-align: right">3,163,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="text-align: center">Fair Value at December 31, </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="8" style="border-bottom: black 1pt solid; text-align: center">Fair Value Measurement Using</td> <td style="text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; border-bottom: black 1pt solid">Description</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: center">2016</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; text-align: center">Level 1</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 2</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Level 3</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Derivative Liabilities Conversion Feature</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right"></td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Liability Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify">$</td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">12,085,859</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">12,085,859</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">19,072,859</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">19,072,859</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   No financial assets were measured on a recurring basis as of June 30, 2017 and December 31, 2016.   The following table presents a reconciliation of the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">6,987,000</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Change in Fair Market Value of Conversion Feature</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,597,950</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Derivative Debt Converted into Equity</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(5,672,050</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 0.15in; text-align: justify">Issuance of Debt Instruments with Derivatives</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">4,446,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">3,163,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   The following table presents a reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2017:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">12,085,859</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">4,426,047</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Payment of Contingent Consideration in Cash</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,088,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,739,638</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,692,697</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Gain on Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(4,991,571</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis   Non-financial assets, such as property, equipment and leasehold improvements, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets during the three and six months ended June 30, 2017 and 2016.

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">12,085,859</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">4,426,047</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Payment of Contingent Consideration in Cash</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,088,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,739,638</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,692,697</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 10.6pt; text-align: justify">Gain on Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(4,991,571</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table> 2088000 14346620 16434620

-533808

257238

As of June 30, 2017 and December 31, 2016, intangible assets consisted of the following:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="hdcell" style="vertical-align: bottom; text-align: center"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="10" style="border-bottom: black 1pt solid; text-align: center">June 30, 2017</td> <td> </td> <td> </td> <td colspan="10" style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: center">December 31, 2016</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Estimated Useful Life in Years</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Gross Carrying Amount</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Accumulated Amortization</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid">Net Carrying Value</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Gross Carrying Amount</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Accumulated Amortization</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid">Net Carrying Value</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; text-align: justify">Amortized Intangible Assets:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Customer Relationships</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="text-align: center">5 to 12</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">8,960,700</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">(1,218,528</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">7,742,172</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">8,960,700</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">(780,960</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">8,179,740</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Trade Brands and Patent</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="text-align: center">2 to 8</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">498,598</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(145,757</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">352,841</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">498,598</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(91,061</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">407,537</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Dispensary License</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: center">14</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">10,270,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(916,965</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">9,353,035</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">10,270,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(550,179</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">9,719,821</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 7%; text-align: right"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 22.5pt; text-align: justify">Total Amortized Intangible Assets</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">19,729,298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(2,281,250</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">17,448,048</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">19,729,298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(1,422,200</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">18,307,098</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Unamortized Intangible Assets:</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Trade Name</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="text-align: center">Indefinite</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 22.5pt; text-align: justify">Total Unamortized Intangible Assets</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">5,320,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total Intangible Assets</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">25,049,298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">(2,281,250</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">22,768,048</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">25,049,298</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">(1,422,200</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">23,627,098</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $429,525 and $516,878 for the three months ended June 30, 2017 and 2016, respectively, and $859,050 and $527,498 for the six months ended June 30, 2017 and 2016, respectively.

The Company accounts for contingent consideration according to FASB ASC 805, Business Combinations. Contingent consideration typically represents the acquirers obligation to transfer additional assets or equity interests to the former owners of the acquiree if specified future events occur or conditions are met. FASB ASC 805 requires that contingent consideration be recognized at the acquisition-date fair value as part of the consideration transferred in the transaction.   In the acquisition of Black Oak, the Company valued the contingent consideration based on an analysis using a cash flow model to determine the expected contingent consideration payment, which model determined that the aggregate expected contingent consideration liability was $15,305,463 and the present value of the contingent consideration liability was $12,754,553. Accordingly, the Company recognized at April 1, 2016, the closing date of the Black Oak merger, a $12,754,553 contingent consideration liability associated with the contingent consideration paid pursuant to the Merger Agreement.   On April 1, 2017, the anniversary date of the acquisition and the settlement date of the contingent consideration, the final contingent consideration was approximately $16.5 million. A summary of the changes in the contingent consideration as well as the detail is below:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">Amount</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="vertical-align: top; text-align: justify">Contingent Consideration Summary</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Balance at December 31, 2016</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">12,085,859</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">4,348,761</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Balance at March 31, 2017 and April 1, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">16,434,620</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Detail</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Performance-Based Cash Contingent Consideration </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">2,088,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Market-Based Stock Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">14,346,620</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">16,434,620</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Changes in the fair market valuation of the contingent consideration are recognized in the consolidated statements of operations. For the three and six months ended June 30, 2017, the loss on fair market valuation of contingent consideration was $77,286, and $4,426,047, respectively.   During April 2017, in final settlement of the contingent consideration, the Company issued approximately $4.7 million in shares of its common stock, or common stock equivalent of approximately 18.1 million shares of its common stock, and made a cash payment of approximately $2.1 million. A summary is as follows:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Balance at March 31, 2017</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">16,434,620</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Change in Fair Market Valuation of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">77,286</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Payment of Contingent Consideration in Cash</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(2,088,000</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,739,638</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">(4,692,697</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; padding-left: 11.25pt; text-align: justify">Gain on Settlement of Contingent Consideration</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(4,991,571</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Contingent Consideration Balance at June 30, 2017</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right"></td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>    Pursuant to the terms of the contingent consideration as outlined in the Merger Agreement, the Company was required to release from escrow shares worth approximately $14.4 million. Of those shares, 18.1 million shares, with a value of $4,789,638, were issued in final settlement of the Market-Based Contingent Consideration, and approximately 34.2 million shares were additionally clawed-back. The Market-Based Clawback associated with common stock equivalent of approximately 35.1 million shares were clawed-back pursuant to the appreciation of the quoted price of the Companys stock underlying the market-based component of the contingent consideration. An additional common stock equivalent of approximately 34.2 million shares, with a value of $9,684,268, were clawed-back pursuant to disputes between the sellers of Black Oak and the Company with respect to certain operational and performance goals that would have impacted the appreciation of the quoted price of the Companys common stock underlying the market-based component of the contingent consideration and, in effect, increasing the number of clawback shares. For the three and six months ended June 30, 2017, the Company recognized a gain on settlement of contingent consideration of $4,991,571. The balance attributable to related parties was recorded in additional paid in capital.     See Note 10 Fair Value Measurements for further information. 9684268 18100000 12085859 16434620 12085859 16434620

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2017	Aug. 04, 2017
Document And Entity Information
Entity Registrant Name	Terra Tech Corp.
Entity Central Index Key	0001451512
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		640,043,036
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

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CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current Assets:
Cash	$ 9,131,306	$ 9,749,572
Accounts Receivable	784,071	747,792
Inventory	3,233,072	1,909,330
Prepaid Expenses	1,238,529	704,721
Total Current Assets	14,386,978	13,111,415
Property, Equipment and Leasehold Improvements, Net	10,581,265	10,464,764
Intangible Assets, Net	22,768,048	23,627,098
Goodwill	28,921,260	28,921,260
Other Assets	221,118	54,193
TOTAL ASSETS	76,878,669	76,178,730
Current Liabilities:
Accounts Payable and Accrued Expenses	3,526,498	2,417,400
Derivative Liabilities	3,163,000	6,987,000
Short-Term Debt	575,705	564,324
Income Taxes Payable	615,830	615,830
Contingent Consideration		12,085,859
Total Current Liabilities	7,881,033	22,670,413
Long-Term Liabilities:
Long-Term Debt	736,290	1,354,352
Total Long-Term Liabilities	736,290	1,354,352
Total Liabilities	8,617,323	24,024,765
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, Par Value $0.001: 990,000,000 Shares Authorized as of June 30, 2017 and December 31, 2016; 618,667,265 and 553,863,812 Shares Issued and Outstanding as of June 30, 2017 and December 31, 2016, respectively	618,667	553,864
Additional Paid-In Capital	152,354,775	124,915,182
Accumulated Deficit	(83,436,756)	(72,870,999)
Total Terra Tech Corp. Stockholders' Equity	69,569,832	52,634,873
Non-Controlling Interest	(1,308,486)	(480,908)
Total Stockholders' Equity	68,261,346	52,153,965
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	76,878,669	76,178,730
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred Stock, Value
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred Stock, Value	$ 33,146	$ 36,826

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Stockholders' Equity
Common stock, par value	$ 0.001	$ 0.001
Common stock, Authorized	990,000,000	990,000,000
Common stock, Issued	618,667,265	553,863,812
Common stock, Outstanding	618,667,265	553,863,812
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	100	100
Preferred stock, Issued	100	100
Preferred stock, Outstanding	100	100
Series B Preferred Stock [Member]
Stockholders' Equity
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	49,999,900	49,999,900
Preferred stock, Issued	33,146,112	36,825,953
Preferred stock, Outstanding	33,146,112	36,825,953

XML 15 R4.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Consolidated Statements Of Operations
Total Revenues	$ 7,842,873	$ 9,699,909	$ 14,667,329	$ 11,248,076
Cost of Goods Sold	6,336,500	8,152,935	12,801,893	9,686,575
Gross Profit	1,506,373	1,546,974	1,865,436	1,561,501
Selling, General and Administrative Expenses	6,029,287	5,364,351	12,415,587	7,291,252
Loss from Operations	(4,522,914)	(3,817,377)	(10,550,151)	(5,729,751)
Other Income (Expense):
Amortization of Debt Discount	(515,654)	(218,126)	(1,126,270)	(312,532)
Loss on Extinguishment of Debt	(1,639,137)		(2,678,595)	(920,797)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		(488,000)		(488,000)
Gain (Loss) on Fair Market Valuation of Derivatives	987,200	(206,000)	2,597,950	(1,366,700)
Interest Expense	(130,510)	(60,565)	(288,343)	(116,560)
Loss on Fair Market Valuation of Contingent Consideration	(77,286)		(4,426,047)
Gain on Settlement of Contingent Consideration	4,991,571		4,991,571
Total Other Income (Expense)	3,616,184	(972,691)	(929,734)	(3,204,589)
Loss Before Provision for Income Taxes	(906,730)	(4,790,068)	(11,479,885)	(8,934,340)
Provision for Income Taxes		381,000		381,000
Net Loss	(906,730)	(5,171,068)	(11,479,885)	(9,315,340)
Net Loss Attributable to Non-Controlling Interests	452,961	236,830	914,128	255,038
NET LOSS ATTRIBUTABLE TO TERRA TECH CORP.	$ (453,769)	$ (4,934,238)	$ (10,565,757)	$ (9,060,302)
Net Loss Per Common Share Attributable to Terra Tech Corp. Common Stockholders - Basic and Diluted		$ (0.01)	$ (0.02)	$ (0.03)
Weighted-Average Number of Common Shares Outstanding - Basic and Diluted	583,096,376	349,893,516	575,249,192	338,187,946

XML 16 R5.htm IDEA: XBRL DOCUMENT

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2017	Jun. 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$ (906,730)	$ (11,479,885)	$ (9,315,340)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
(Gain) Loss on Fair Market Valuation of Derivatives	(987,200)	(2,597,950)	1,366,700
Loss on Fair Market Valuation of Contingent Consideration	77,286	4,426,047
Gain on Settlement of Contingent Consideration	(4,991,571)	(4,991,571)
Loss on Extinguishment of Debt	1,639,137	2,678,595	920,797
Amortization of Debt Discount	515,654	1,126,270	312,532
Deferred Tax Expense			49,000
Depreciation and Amortization		1,778,782	787,178
Warrants Issued with Common Stock and Debt		211,534
Stock Issued for Compensation		1,356,138
Stock Issued for Director Fees		221,973	60,550
Stock Issued for Services		591,359	20,727
Stock Option Expense		205,019	95,177
Equity Instruments Issued with Debt Greater than Debt Carrying Value			488,000
Change in Allowance for Doubtful Accounts			102,253
Changes in Operating Assets and Liabilities:
Accounts Receivable		(36,279)	(369,557)
Inventory		(1,323,742)	(472,970)
Prepaid Expenses		(533,808)	257,238
Other Assets		(166,925)
Accounts Payable and Accrued Expenses		1,383,860	2,393,183
NET CASH USED IN OPERATING ACTIVITIES		(7,150,583)	(3,304,532)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Assumed in Acquisition			163,566
Purchase of Property, Equipment and Leasehold Improvements		(1,036,233)	(1,988,587)
Purchase of Intangible Assets - Domain Names			(75,000)
NET CASH USED IN INVESTING ACTIVITIES		(1,036,233)	(1,900,021)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Notes Payable		6,000,000	3,250,000
Cash Paid for Debt Discount		(180,000)
Proceeds from Issuance of Common Stock		3,750,000	3,208,134
Payment of Contingent Consideration		(2,088,000)
Cash Contribution from Non-Controlling Interest		86,550
NET CASH PROVIDED BY FINANCING ACTIVITIES		7,568,550	6,458,134
NET CHANGE IN CASH		(618,266)	1,253,581
Cash at Beginning of Period		9,749,572	418,082
CASH AT END OF PERIOD	9,131,306	9,131,306	1,671,663
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:
Cash Paid for Interest			10,100
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Settlement of Contingent Consideration	4,739,638	4,739,638
Gain on Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital	$ 4,692,697	4,692,697
Fair Value of Debt Discount Recorded		4,446,000	2,824,000
Issuance of Common Stock for Debt and Interest Expense		$ 8,564,324

XML 17 R6.htm IDEA: XBRL DOCUMENT

DESCRIPTION OF BUSINESS

6 Months Ended

Jun. 30, 2017

Note 1. DESCRIPTION OF BUSINESS

Organization

Since the Merger was completed on April 1, 2016, Black Oak’s financial results are included in our unaudited consolidated financial statements subsequent to that date.

XML 18 R7.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Non-Controlling Interest

Use of Estimates

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss and shareholders’ equity.

Inventory

Prepaid Expenses

Property, Equipment and Leasehold Improvements

Goodwill

Intangibles

Customer Relationships		5 to 12 Years
Trade Names		2 to 8 Years
Dispensary License		14 Years
Patent		2 Years

Impairment of Long-Lived Assets

Other Assets

Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.

Revenue Recognition

Cannabis Dispensary, Cultivation and Production

Herbs and Produce Products

Cost of Goods Sold

Cannabis Dispensary, Cultivation and Production

Herbs and Produce Products

Stock-Based Compensation

Warrants

Research and Development

Research and development costs are expensed as incurred.

Income Taxes

Loss Per Common Share

Fair Value of Financial Instruments

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Recently Issued Accounting Standards

FASB ASU No. 2016-02 (Topic 842), “Leases” – Issued in February 2016, ASU No. 2016-02 will require entities to recognize right-of-use assets and lease liabilities on the balance sheet for the rights and obligations created by all leases, including operating leases, with terms of more than 12 months. The new standard also requires additional disclosures on the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative information. The new standard will be effective for the Company on January 1, 2019. Early adoption is permitted. The Company is in the process of evaluating the impact the adoption of this standard will have on its consolidated financial statements and related disclosures.

XML 19 R8.htm IDEA: XBRL DOCUMENT

CONCENTRATIONS OF BUSINESS AND CREDIT RISK

6 Months Ended

Jun. 30, 2017

Note 3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK

XML 20 R9.htm IDEA: XBRL DOCUMENT

INVENTORY

6 Months Ended

Jun. 30, 2017

Note 4. INVENTORY

As of June 30, 2017 and December 31, 2016, inventory consisted of the following:

	June 30, 2017		December 31, 2016

Raw Materials	$	1,010,401	$	486,119
Work-in-Progress		1,179,647		570,145
Finished Goods		1,043,024		853,066

Total Inventory	$	3,233,072	$	1,909,330

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PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

6 Months Ended

Jun. 30, 2017

Note 5. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

As of June 30, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following:

	June 30, 2017			December 31, 2016

Land and Building	$	1,454,124		$	1,454,124
Furniture and Equipment		3,376,758			3,141,244
Computer Hardware and Software		438,210			396,479
Leasehold Improvements		8,458,734			7,568,465
Construction in Progress		297,041			459,327

Subtotal		14,024,867			13,019,639
Less Accumulated Depreciation		(3,443,602	)		(2,554,875	)

Property, Equipment and Leasehold Improvements, Net	$	10,581,265		$	10,464,764

XML 22 R11.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2017

Note 6. INTANGIBLE ASSETS

As of June 30, 2017 and December 31, 2016, intangible assets consisted of the following:

		June 30, 2017							December 31, 2016
	Estimated Useful Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value

Amortized Intangible Assets:
Customer Relationships	5 to 12	$	8,960,700	$	(1,218,528	)	$	7,742,172	$	8,960,700	$	(780,960	)	$	8,179,740
Trade Brands and Patent	2 to 8		498,598		(145,757	)		352,841		498,598		(91,061	)		407,537
Dispensary License	14		10,270,000		(916,965	)		9,353,035		10,270,000		(550,179	)		9,719,821

Total Amortized Intangible Assets			19,729,298		(2,281,250	)		17,448,048		19,729,298		(1,422,200	)		18,307,098

Unamortized Intangible Assets:
Trade Name	Indefinite		5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Unamortized Intangible Assets			5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Intangible Assets		$	25,049,298	$	(2,281,250	)	$	22,768,048	$	25,049,298	$	(1,422,200	)	$	23,627,098

XML 23 R12.htm IDEA: XBRL DOCUMENT

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2017

Note 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

As of June 30, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following:

	June 30, 2017		December 31, 2016

Accounts Payable	$	1,742,666	$	1,986,907
Sales Tax Payable		360,176		122,470
Accrued Interest Payable		110,217		96,633
Accrued Expenses		1,313,439		211,390

Total Accounts Payable and Accrued Expenses	$	3,526,498	$	2,417,400

XML 24 R13.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE

6 Months Ended

Jun. 30, 2017

Note 8. NOTES PAYABLE

As of June 30, 2017 and December 31, 2016, notes payable consisted of the following:

	June 30, 2017		December 31, 2016

Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. The remaining balance of the note and accrued interest was converted into common stock in April 2017.	$	–	$	64,324
Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment.		500,000		500,000
Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. The remaining balance of the note and accrued interest was converted into common stock in January 2017.		–		102,582
Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment.		75,705		31,615
Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment.		–		1,220,155
Senior convertible promissory note dated June 23, 2017, issued to accredited investors, which matures December 23, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.1362, subject to adjustment.		736,290		–

Total Debt		1,311,995		1,918,676

Less Short-Term Portion		575,705		564,324

Long-Term Portion	$	736,290	$	1,354,352

See “Note 16 – Subsequent Events” for additional disclosure regarding changes in notes payable subsequent to June 30, 2017.

Securities Purchase Agreement Dated June 23, 2017 and 12% Senior Convertible Promissory Note Due December 23, 2018

Securities Purchase Agreement Dated February 22, 2017 and 12% Senior Convertible Promissory Note Due August 22, 2018

XML 25 R14.htm IDEA: XBRL DOCUMENT

CONTINGENT CONSIDERATION LIABILITY

6 Months Ended

Jun. 30, 2017

Note 9. CONTINGENT CONSIDERATION LIABILITY

	Amount

Contingent Consideration Summary

Balance at December 31, 2016	$	12,085,859
Change in Fair Market Valuation of Contingent Consideration		4,348,761

Balance at March 31, 2017 and April 1, 2017	$	16,434,620

Contingent Consideration Detail

Performance-Based Cash Contingent Consideration	$	2,088,000
Market-Based Stock Contingent Consideration		14,346,620

	$	16,434,620

Contingent Consideration Balance at March 31, 2017	$	16,434,620

Change in Fair Market Valuation of Contingent Consideration		77,286
Payment of Contingent Consideration in Cash		(2,088,000	)
Settlement of Contingent Consideration		(4,739,638	)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital		(4,692,697	)
Gain on Settlement of Contingent Consideration		(4,991,571	)

Contingent Consideration Balance at June 30, 2017	$	–

See “Note 10 – Fair Value Measurements” for further information.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2017

Note 10. FAIR VALUE MEASUREMENTS

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:

	Fair Value at June 30,		Fair Value Measurement Using
Description	2017		Level 1		Level 2		Level 3

Derivative Liabilities – Conversion Feature	$	3,163,000	$	–	$	–	$	3,163,000

	$	3,163,000	$	–	$	–	$	3,163,000

	Fair Value at December 31,			Fair Value Measurement Using
Description	2016			Level 1	Level 2		Level 3

Derivative Liabilities – Conversion Feature	$	6,987,000	$	–	$	–	$	6,987,000
Liability – Contingent Consideration	$	12,085,859		–		–		12,085,859

	$	19,072,859	$	–	$	–	$	19,072,859

No financial assets were measured on a recurring basis as of June 30, 2017 and December 31, 2016.

Balance at December 31, 2016	$	6,987,000

Change in Fair Market Value of Conversion Feature		(2,597,950	)
Derivative Debt Converted into Equity		(5,672,050	)
Issuance of Debt Instruments with Derivatives		4,446,000

Balance at June 30, 2017	$	3,163,000

Balance at December 31, 2016	$	12,085,859

Change in Fair Market Valuation of Contingent Consideration		4,426,047
Payment of Contingent Consideration in Cash		(2,088,000	)
Settlement of Contingent Consideration		(4,739,638	)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital		(4,692,697	)
Gain on Settlement of Contingent Consideration		(4,991,571	)

Balance at June 30, 2017	$	–

Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

XML 27 R16.htm IDEA: XBRL DOCUMENT

INCOME TAXES

6 Months Ended

Jun. 30, 2017

Note 11. INCOME TAXES

For the three and six months ended June 30, 2017 and 2016, the Company had no income tax expense (benefit).

As of June 30, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following:

	June 30, 2017			December 31, 2016

Deferred Income Tax Assets:
Warrants Expense	$	4,832,000		$	4,186,000
Derivatives Expense		6,443,000			4,067,000
Net Operating Losses		19,105,000			15,242,000

Deferred Income Tax Liabilities:
Depreciation		(1,818,000	)		(1,334,000	)

Total		28,562,000			22,161,000
Valuation Allowance		(28,562,000	)		(22,161,000	)

Net Deferred Tax Liabilities	$	–		$	–

The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2012 to 2015 are subject to examination.

XML 28 R17.htm IDEA: XBRL DOCUMENT

EQUITY

6 Months Ended

Jun. 30, 2017

Note 12. EQUITY

Preferred Stock

Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Company’s common stock.

See “Note 16 – Subsequent Events” for additional disclosure regarding changes to the Company’s Series B Preferred Stock subsequent to June 30, 2017.

During the six months ended June 30, 2017, the Company issued 600,000 shares of Series B Preferred Stock for compensation in the amount of $1,035,406.

Common Stock

During the six months ended June 30, 2017, senior secured convertible promissory notes and accrued interest in the amount of $8,839,084 were converted into 50,710,473 shares of common stock.

During the six months ended June 30, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock.

During the six months ended June 30, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor.

Stock-Based Compensation Expense

A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:

For the Three Months Ended

June 30, 2017

June 30, 2016

Type of Award

Number of Shares or Options Granted

Stock-Based Compensation Expense

Number of Shares or Options Granted

Stock-Based Compensation Expense

Stock Options

8,250,000

157,430

–

47,589

Stock Grants:

Employees (Common Stock)

1,535,780

294,632

–

Employees (Series B Preferred Stock)

–

Directors (Common Stock)

1,090,909

184,473

–

Non–Employee Consultants (Common Stock)

2,391,358

446,348

–

Total Stock-Based Compensation

13,268,047

1,082,883

–

47,589

A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:

	For the Six Months Ended
	June 30, 2017				June 30, 2016
Type of Award	Number of Shares or Options Granted		Stock-Based Compensation Expense		Number of Shares or Options Granted		Stock-Based Compensation Expense

Stock Options		8,250,000	$	205,019		6,700,000	$	95,178

Stock Grants:
Employees (Common Stock)		1,635,780		320,732		–		–
Employees (Series B Preferred Stock)		600,000		1,035,406		–		–
Directors (Common Stock)		1,215,909		221,973		350,000		60,550
Non–Employee Consultants (Common Stock)		2,859,005		591,359		70,000		20,727

Total Stock–Based Compensation		14,560,694	$	2,374,489		7,120,000	$	176,455

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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+ Details

XML 29 R18.htm IDEA: XBRL DOCUMENT

COMMITMENTS

6 Months Ended

Jun. 30, 2017

Note 13. COMMITMENTS

Operating Lease Commitments

Production Operating Agreement

XML 30 R19.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2017

Note 14. SEGMENT INFORMATION

The Company’s operating and reportable segments are currently organized around the following products that it offers as part of its core business strategy:

	·	*Herbs and Produce Products* – Includes herbs and leafy greens that are grown using classic Dutch hydroponic farming methods.

	·	*Cannabis Dispensary, Cultivation and Production* – Includes cannabis-focused retail, cultivation and production.

Herbs and Produce Products

Cannabis Dispensary, Cultivation and Production

	For the Three Months Ended June 30, 2017
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	1,777,067		$	6,049,319		$	16,487		$	7,842,873
Cost of Goods Sold		1,325,729			5,010,771			–			6,336,500

Gross Profit		451,338			1,038,548			16,487			1,506,373

Selling, General and Administrative Expenses		855,999			2,210,475			2,962,813			6,029,287

Loss from Operations		(404,661	)		(1,171,927	)		(2,946,326	)		(4,522,914	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(515,654	)		(515,654	)
Loss on Extinguishment of Debt		–			–			(1,639,137	)		(1,639,137	)
Gain on Fair Market Valuation of Derivatives		–			–			987,200			987,200
Interest Expense		–			–			(130,510	)		(130,510	)
Loss on Fair Market Valuation of Contingent Consideration		–			(77,286	)		–			(77,286	)
Gain on Settlement of Contingent Consideration		–			4,991,571			–			4,991,571

Total Other Income (Expense)		–			4,914,285			(1,298,101	)		3,616,184

Loss Before Provision for Income Taxes	$	(404,661	)	$	3,742,358		$	(4,244,427	)	$	(906,730	)

Total Assets at June 30, 2017	$	7,104,469		$	60,224,138		$	9,550,062		$	76,878,669

	For the Three Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	5,873,418		$	3,768,977		$	57,514		$	9,699,909
Cost of Goods Sold		5,517,052			2,596,035			39,848			8,152,935

Gross Profit		356,366			1,172,942			17,666			1,546,974

Selling, General and Administrative Expenses		756,405			1,649,452			2,958,494			5,364,351

Loss from Operations		(400,039	)		(476,510	)		(2,940,828	)		(3,817,377	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(218,126	)		(218,126	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(206,000	)		(206,000	)
Interest Income (Expense)		–			250			(60,815	)		(60,565	)

Total Other Income (Expense)		–			250			(972,941	)		(972,691	)

Loss Before Provision for Income Taxes	$	(400,039	)	$	(476,260	)	$	(3,913,769	)	$	(4,790,068	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

	For the Six Months Ended June 30, 2017
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	2,694,210		$	11,936,357		$	36,762		$	14,667,329
Cost of Goods Sold		2,295,544			10,506,349			–			12,801,893

Gross Profit		398,666			1,430,008			36,762			1,865,436

Selling, General and Administrative Expenses		1,515,062			4,837,480			6,063,045			12,415,587

Loss from Operations		(1,116,396	)		(3,407,472	)		(6,026,283	)		(10,550,151	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(1,126,270	)		(1,126,270	)
Loss on Extinguishment of Debt		–			–			(2,678,595	)		(2,678,595	)
Gain on Fair Market Valuation of Derivatives		–			–			2,597,950			2,597,950
Interest Expense		–			–			(288,343	)		(288,343	)
Loss on Fair Market Valuation of Contingent Consideration		–			(4,426,047	)		–			(4,426,047	)
Gain on Settlement of Contingent Consideration		–			4,991,571			–			4,991,571

Total Other Income (Expense)		–			565,524			(1,495,258	)		(929,734	)

Loss Before Provision for Income Taxes	$	(1,116,396	)	$	(2,841,948	)	$	(7,521,541	)	$	(11,479,885	)

Total Assets at June 30, 2017	$	7,104,469		$	60,224,138		$	9,550,062		$	76,878,669

	For the Six Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	7,274,861		$	3,899,180		$	74,035		$	11,248,076
Cost of Goods Sold		6,837,431			2,809,296			39,848			9,686,575

Gross Profit		437,430			1,089,884			34,187			1,561,501

Selling, General and Administrative Expenses		1,155,610			1,851,588			4,284,054			7,291,252

Loss from Operations		(718,180	)		(761,704	)		(4,249,867	)		(5,729,751	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(312,532	)		(312,532	)
Loss on Extinguishment of Debt		–			–			(920,797	)		(920,797	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(1,366,700	)		(1,366,700	)
Interest Income (Expense)		–			250			(116,810	)		(116,560	)

Total Other Income (Expense)		–			250			(3,204,839	)		(3,204,589	)

Loss Before Provision for Income Taxes	$	(718,180	)	$	(761,454	)	$	(7,454,706	)	$	(8,934,340	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 35
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8984-108599

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9054-108599

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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8906-108599

+ Details

XML 31 R20.htm IDEA: XBRL DOCUMENT

LITIGATION AND CLAIMS

6 Months Ended

Jun. 30, 2017

Note 15. LITIGATION AND CLAIMS

XML 32 R21.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

Note 16. SUBSEQUENT EVENTS

Certificate of Amendment to the Certificate of Designation of the Company’s Series B Preferred Stock

Put on Equity Financing Facility

Subsequent to June 30, 2017, the Company sold 5,519,660 shares of common stock for the net amount of $1,250,000 pursuant to an equity financing facility with an accredited investor.

Debt and Interest Converted into Equity

Subsequent to June 30, 2017, senior convertible promissory notes and accrued interest in the amount of $2,092,492 were converted into 15,738,463 shares of common stock.

Employee Stock-Based Compensation

Subsequent to June 30, 2017, the Company issued 117,648 shares of common stock for employee stock-based compensation.

XML 33 R22.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

Summary Of Significant Accounting Policies Policies

Basis of Presentation

Non-Controlling Interest

Use of Estimates

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications did not affect net loss and shareholders’ equity.

Inventory

Prepaid Expenses

Property, Equipment and Leasehold Improvements

Goodwill

We review the goodwill allocated to each of our reporting units for possible impairment annually on August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit.

Intangibles

Customer Relationships		5 to 12 Years
Trade Names		2 to 8 Years
Dispensary License		14 Years
Patent		2 Years

Impairment of Long-Lived Assets

Other Assets

Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.

Revenue Recognition

Cannabis Dispensary, Cultivation and Production

Herbs and Produce Products

Cost of Goods Sold

Cannabis Dispensary, Cultivation and Production

Herbs and Produce Products

Stock-Based Compensation

Warrants

Research and Development

Research and development costs are expensed as incurred.

Income Taxes

Loss Per Common Share

Fair Value of Financial Instruments

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

Recently Issued Accounting Standards

XML 34 R23.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2017

Summary Of Significant Accounting Policies Tables

Useful Lives for amortization of our Intangible assets

Customer Relationships		5 to 12 Years
Trade Names		2 to 8 Years
Dispensary License		14 Years
Patent		2 Years

XML 35 R24.htm IDEA: XBRL DOCUMENT

INVENTORY (Tables)

6 Months Ended

Jun. 30, 2017

Inventory Tables

Inventory

As of June 30, 2017 and December 31, 2016, inventory consisted of the following:

	June 30, 2017		December 31, 2016

Raw Materials	$	1,010,401	$	486,119
Work-in-Progress		1,179,647		570,145
Finished Goods		1,043,024		853,066

Total Inventory	$	3,233,072	$	1,909,330

XML 36 R25.htm IDEA: XBRL DOCUMENT

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)

6 Months Ended

Jun. 30, 2017

Property Equipment And Leasehold Improvements Tables

Property, equipment, and leasehold improvements

As of June 30, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following:

	June 30, 2017			December 31, 2016

Land and Building	$	1,454,124		$	1,454,124
Furniture and Equipment		3,376,758			3,141,244
Computer Hardware and Software		438,210			396,479
Leasehold Improvements		8,458,734			7,568,465
Construction in Progress		297,041			459,327

Subtotal		14,024,867			13,019,639
Less Accumulated Depreciation		(3,443,602	)		(2,554,875	)

Property, Equipment and Leasehold Improvements, Net	$	10,581,265		$	10,464,764

XML 37 R26.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2017

Intangible Assets Tables

Intangible assets

As of June 30, 2017 and December 31, 2016, intangible assets consisted of the following:

		June 30, 2017							December 31, 2016
	Estimated Useful Life in Years	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value

Amortized Intangible Assets:
Customer Relationships	5 to 12	$	8,960,700	$	(1,218,528	)	$	7,742,172	$	8,960,700	$	(780,960	)	$	8,179,740
Trade Brands and Patent	2 to 8		498,598		(145,757	)		352,841		498,598		(91,061	)		407,537
Dispensary License	14		10,270,000		(916,965	)		9,353,035		10,270,000		(550,179	)		9,719,821

Total Amortized Intangible Assets			19,729,298		(2,281,250	)		17,448,048		19,729,298		(1,422,200	)		18,307,098

Unamortized Intangible Assets:
Trade Name	Indefinite		5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Unamortized Intangible Assets			5,320,000		–			5,320,000		5,320,000		–			5,320,000

Total Intangible Assets		$	25,049,298	$	(2,281,250	)	$	22,768,048	$	25,049,298	$	(1,422,200	)	$	23,627,098

XML 38 R27.htm IDEA: XBRL DOCUMENT

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2017

Accounts Payable And Accrued Expenses Tables

Accounts payable and accrued expenses

As of June 30, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following:

	June 30, 2017		December 31, 2016

Accounts Payable	$	1,742,666	$	1,986,907
Sales Tax Payable		360,176		122,470
Accrued Interest Payable		110,217		96,633
Accrued Expenses		1,313,439		211,390

Total Accounts Payable and Accrued Expenses	$	3,526,498	$	2,417,400

XML 39 R28.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2017

Notes Payable Tables

Notes payable

As of June 30, 2017 and December 31, 2016, notes payable consisted of the following:

	June 30, 2017		December 31, 2016

Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. The remaining balance of the note and accrued interest was converted into common stock in April 2017.	$	–	$	64,324
Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment.		500,000		500,000
Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. The remaining balance of the note and accrued interest was converted into common stock in January 2017.		–		102,582
Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment.		75,705		31,615
Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment.		–		1,220,155
Senior convertible promissory note dated June 23, 2017, issued to accredited investors, which matures December 23, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.1362, subject to adjustment.		736,290		–

Total Debt		1,311,995		1,918,676

Less Short-Term Portion		575,705		564,324

Long-Term Portion	$	736,290	$	1,354,352

XML 40 R29.htm IDEA: XBRL DOCUMENT

CONTINGENT CONSIDERATION LIABILITY (Tables)

6 Months Ended

Jun. 30, 2017

The summary of contingent consideration

Contingent Consideration Balance at March 31, 2017	$	16,434,620

Change in Fair Market Valuation of Contingent Consideration		77,286
Payment of Contingent Consideration in Cash		(2,088,000	)
Settlement of Contingent Consideration		(4,739,638	)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital		(4,692,697	)
Gain on Settlement of Contingent Consideration		(4,991,571	)

Contingent Consideration Balance at June 30, 2017	$	–

The summary of additional market-based contingent consideration clawbacks

	Amount

Contingent Consideration Summary

Balance at December 31, 2016	$	12,085,859
Change in Fair Market Valuation of Contingent Consideration		4,348,761

Balance at March 31, 2017 and April 1, 2017	$	16,434,620

Contingent Consideration Detail

Performance-Based Cash Contingent Consideration	$	2,088,000
Market-Based Stock Contingent Consideration		14,346,620

	$	16,434,620

XML 41 R30.htm IDEA: XBRL DOCUMENT

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2017

Fair Value Measurements Tables

Fair value hierarchy financial assets measured

The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:

	Fair Value at June 30,		Fair Value Measurement Using
Description	2017		Level 1		Level 2		Level 3

Derivative Liabilities – Conversion Feature	$	3,163,000	$	–	$	–	$	3,163,000

	$	3,163,000	$	–	$	–	$	3,163,000

	Fair Value at December 31,			Fair Value Measurement Using
Description	2016			Level 1	Level 2		Level 3

Derivative Liabilities – Conversion Feature	$	6,987,000	$	–	$	–	$	6,987,000
Liability – Contingent Consideration	$	12,085,859		–		–		12,085,859

	$	19,072,859	$	–	$	–	$	19,072,859

Reconciliation of the Derivative Liabilities measured

Balance at December 31, 2016	$	6,987,000

Change in Fair Market Value of Conversion Feature		(2,597,950	)
Derivative Debt Converted into Equity		(5,672,050	)
Issuance of Debt Instruments with Derivatives		4,446,000

Balance at June 30, 2017	$	3,163,000

Reconciliation of the Contingent Consideration Liability

Balance at December 31, 2016	$	12,085,859

Change in Fair Market Valuation of Contingent Consideration		4,426,047
Payment of Contingent Consideration in Cash		(2,088,000	)
Settlement of Contingent Consideration		(4,739,638	)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital		(4,692,697	)
Gain on Settlement of Contingent Consideration		(4,991,571	)

Balance at June 30, 2017	$	–

XML 42 R31.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2017

Income Taxes Tables

Deferred tax assets and liabilities

As of June 30, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following:

	June 30, 2017			December 31, 2016

Deferred Income Tax Assets:
Warrants Expense	$	4,832,000		$	4,186,000
Derivatives Expense		6,443,000			4,067,000
Net Operating Losses		19,105,000			15,242,000

Deferred Income Tax Liabilities:
Depreciation		(1,818,000	)		(1,334,000	)

Total		28,562,000			22,161,000
Valuation Allowance		(28,562,000	)		(22,161,000	)

Net Deferred Tax Liabilities	$	–		$	–

XML 43 R32.htm IDEA: XBRL DOCUMENT

EQUITY (Tables)

6 Months Ended

Jun. 30, 2017

Equity Tables

Stock-Based Compensation Expense

A summary of stock-based compensation for the three months ended June 30, 2017 and 2016 is as follows:

For the Three Months Ended

June 30, 2017

June 30, 2016

Type of Award

Number of Shares or Options Granted

Stock-Based Compensation Expense

Number of Shares or Options Granted

Stock-Based Compensation Expense

Stock Options

8,250,000

157,430

–

47,589

Stock Grants:

Employees (Common Stock)

1,535,780

294,632

–

Employees (Series B Preferred Stock)

–

Directors (Common Stock)

1,090,909

184,473

–

Non–Employee Consultants (Common Stock)

2,391,358

446,348

–

Total Stock-Based Compensation

13,268,047

1,082,883

–

47,589

A summary of stock-based compensation for the six months ended June 30, 2017 and 2016 is as follows:

	For the Six Months Ended
	June 30, 2017				June 30, 2016
Type of Award	Number of Shares or Options Granted		Stock-Based Compensation Expense		Number of Shares or Options Granted		Stock-Based Compensation Expense

Stock Options		8,250,000	$	205,019		6,700,000	$	95,178

Stock Grants:
Employees (Common Stock)		1,635,780		320,732		–		–
Employees (Series B Preferred Stock)		600,000		1,035,406		–		–
Directors (Common Stock)		1,215,909		221,973		350,000		60,550
Non–Employee Consultants (Common Stock)		2,859,005		591,359		70,000		20,727

Total Stock–Based Compensation		14,560,694	$	2,374,489		7,120,000	$	176,455

XML 44 R33.htm IDEA: XBRL DOCUMENT

SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2017

Segment Information Tables

Summarized financial information

	For the Three Months Ended June 30, 2017
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	1,777,067		$	6,049,319		$	16,487		$	7,842,873
Cost of Goods Sold		1,325,729			5,010,771			–			6,336,500

Gross Profit		451,338			1,038,548			16,487			1,506,373

Selling, General and Administrative Expenses		855,999			2,210,475			2,962,813			6,029,287

Loss from Operations		(404,661	)		(1,171,927	)		(2,946,326	)		(4,522,914	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(515,654	)		(515,654	)
Loss on Extinguishment of Debt		–			–			(1,639,137	)		(1,639,137	)
Gain on Fair Market Valuation of Derivatives		–			–			987,200			987,200
Interest Expense		–			–			(130,510	)		(130,510	)
Loss on Fair Market Valuation of Contingent Consideration		–			(77,286	)		–			(77,286	)
Gain on Settlement of Contingent Consideration		–			4,991,571			–			4,991,571

Total Other Income (Expense)		–			4,914,285			(1,298,101	)		3,616,184

Loss Before Provision for Income Taxes	$	(404,661	)	$	3,742,358		$	(4,244,427	)	$	(906,730	)

Total Assets at June 30, 2017	$	7,104,469		$	60,224,138		$	9,550,062		$	76,878,669

	For the Three Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	5,873,418		$	3,768,977		$	57,514		$	9,699,909
Cost of Goods Sold		5,517,052			2,596,035			39,848			8,152,935

Gross Profit		356,366			1,172,942			17,666			1,546,974

Selling, General and Administrative Expenses		756,405			1,649,452			2,958,494			5,364,351

Loss from Operations		(400,039	)		(476,510	)		(2,940,828	)		(3,817,377	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(218,126	)		(218,126	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(206,000	)		(206,000	)
Interest Income (Expense)		–			250			(60,815	)		(60,565	)

Total Other Income (Expense)		–			250			(972,941	)		(972,691	)

Loss Before Provision for Income Taxes	$	(400,039	)	$	(476,260	)	$	(3,913,769	)	$	(4,790,068	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

	For the Six Months Ended June 30, 2017
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	2,694,210		$	11,936,357		$	36,762		$	14,667,329
Cost of Goods Sold		2,295,544			10,506,349			–			12,801,893

Gross Profit		398,666			1,430,008			36,762			1,865,436

Selling, General and Administrative Expenses		1,515,062			4,837,480			6,063,045			12,415,587

Loss from Operations		(1,116,396	)		(3,407,472	)		(6,026,283	)		(10,550,151	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(1,126,270	)		(1,126,270	)
Loss on Extinguishment of Debt		–			–			(2,678,595	)		(2,678,595	)
Gain on Fair Market Valuation of Derivatives		–			–			2,597,950			2,597,950
Interest Expense		–			–			(288,343	)		(288,343	)
Loss on Fair Market Valuation of Contingent Consideration		–			(4,426,047	)		–			(4,426,047	)
Gain on Settlement of Contingent Consideration		–			4,991,571			–			4,991,571

Total Other Income (Expense)		–			565,524			(1,495,258	)		(929,734	)

Loss Before Provision for Income Taxes	$	(1,116,396	)	$	(2,841,948	)	$	(7,521,541	)	$	(11,479,885	)

Total Assets at June 30, 2017	$	7,104,469		$	60,224,138		$	9,550,062		$	76,878,669

	For the Six Months Ended June 30, 2016
	Herbs and Produce Products			Cannabis Dispensary, Cultivation and Production			Eliminations and Other			Total

Total Revenues	$	7,274,861		$	3,899,180		$	74,035		$	11,248,076
Cost of Goods Sold		6,837,431			2,809,296			39,848			9,686,575

Gross Profit		437,430			1,089,884			34,187			1,561,501

Selling, General and Administrative Expenses		1,155,610			1,851,588			4,284,054			7,291,252

Loss from Operations		(718,180	)		(761,704	)		(4,249,867	)		(5,729,751	)

Other Income (Expense):
Amortization of Debt Discount		–			–			(312,532	)		(312,532	)
Loss on Extinguishment of Debt		–			–			(920,797	)		(920,797	)
Loss from Derivatives Issued with Debt Greater than Debt Carrying Value		–			–			(488,000	)		(488,000	)
Loss on Fair Market Valuation of Derivatives		–			–			(1,366,700	)		(1,366,700	)
Interest Income (Expense)		–			250			(116,810	)		(116,560	)

Total Other Income (Expense)		–			250			(3,204,839	)		(3,204,589	)

Loss Before Provision for Income Taxes	$	(718,180	)	$	(761,454	)	$	(7,454,706	)	$	(8,934,340	)

Total Assets at June 30, 2016	$	6,834,863		$	57,142,755		$	2,784,814		$	66,762,432

XML 45 R34.htm IDEA: XBRL DOCUMENT

DESCRIPTION OF BUSINESS (Details Narrative)	6 Months Ended
DESCRIPTION OF BUSINESS (Details Narrative)	Jun. 30, 2017
Description Of Business Details Narrative
State of Incorporation	Nevada

XML 46 R35.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	6 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 30, 2017
Customer Relationships [Member] \| Minimum [Member]
Useful Life (in Years)	5 years
Customer Relationships [Member] \| Maximum [Member]
Useful Life (in Years)	12 years
Trade Name [Member] \| Minimum [Member]
Useful Life (in Years)	2 years
Trade Name [Member] \| Maximum [Member]
Useful Life (in Years)	8 years
Dispensary license [Member]
Useful Life (in Years)	14 years
Patent [Member]
Useful Life (in Years)	2 years

XML 47 R36.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	6 Months Ended
	Jun. 30, 2017
Tax benefit	Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement.
Building [Member]
Estimated useful life	32 years
Furniture and Equipment [Member] \| Minimum [Member]
Estimated useful life	3 years
Furniture and Equipment [Member] \| Maximum [Member]
Estimated useful life	8 years
Leasehold Improvements [Member]
Estimated useful lives	The shorter of the estimated useful life or the underlying lease term for leasehold improvements

XML 48 R37.htm IDEA: XBRL DOCUMENT

INVENTORY (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Inventory Details
Raw Materials	$ 1,010,401	$ 486,119
Work-In-Progress	1,179,647	570,145
Finished Goods	1,043,024	853,066
Total Inventory	$ 3,233,072	$ 1,909,330

XML 49 R38.htm IDEA: XBRL DOCUMENT

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Property, Equipment and Leasehold Improvements, Gross	$ 14,024,867	$ 13,019,639
Less accumulated depreciation	(3,443,602)	(2,554,875)
Property, Equipment and Leasehold Improvements, Net	10,581,265	10,464,764
Land and Building [Member]
Property, Equipment and Leasehold Improvements, Gross	1,454,124	1,454,124
Furniture and Equipment [Member]
Property, Equipment and Leasehold Improvements, Gross	3,376,758	3,141,244
Computer Hardware and Software [Member]
Property, Equipment and Leasehold Improvements, Gross	438,210	396,479
Leasehold Improvements [Member]
Property, Equipment and Leasehold Improvements, Gross	8,458,734	7,568,465
Construction in Progress [Member]
Property, Equipment and Leasehold Improvements, Gross	$ 297,041	$ 459,327

XML 50 R39.htm IDEA: XBRL DOCUMENT

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Property Equipment And Leasehold Improvements Details Narrative
Depreciation expense	$ 456,659	$ 222,939	$ 919,732	$ 373,668

XML 51 R40.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details) - USD ($)	6 Months Ended
INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Gross Carrying Amount	$ 25,049,298	$ 25,049,298
Accumulated Amortization	(2,281,250)	(1,422,200)
Net carrying value	$ 22,768,048	23,627,098
Customer Relationships [Member] \| Minimum [Member]
Useful Life (in Years)	5 years
Customer Relationships [Member] \| Maximum [Member]
Useful Life (in Years)	12 years
Dispensary license [Member]
Useful Life (in Years)	14 years
Amortized Intangible Assets [Member]
Gross Carrying Amount	$ 19,729,298	19,729,298
Accumulated Amortization	(2,281,250)	(1,422,200)
Net carrying value	17,448,048	18,307,098
Amortized Intangible Assets [Member] \| Customer Relationships [Member]
Gross Carrying Amount	8,960,700	8,960,700
Accumulated Amortization	(1,218,528)	(780,960)
Net carrying value	$ 7,742,172	8,179,740
Amortized Intangible Assets [Member] \| Customer Relationships [Member] \| Minimum [Member]
Useful Life (in Years)	5 years
Amortized Intangible Assets [Member] \| Customer Relationships [Member] \| Maximum [Member]
Useful Life (in Years)	12 years
Amortized Intangible Assets [Member] \| Trade Brands and Patent [Member]
Gross Carrying Amount	$ 498,598	498,598
Accumulated Amortization	(145,757)	(91,061)
Net carrying value	$ 352,841	407,537
Amortized Intangible Assets [Member] \| Trade Brands and Patent [Member] \| Minimum [Member]
Useful Life (in Years)	2 years
Amortized Intangible Assets [Member] \| Trade Brands and Patent [Member] \| Maximum [Member]
Useful Life (in Years)	8 years
Amortized Intangible Assets [Member] \| Dispensary license [Member]
Gross Carrying Amount	$ 10,270,000	10,270,000
Accumulated Amortization	(916,965)	(550,179)
Net carrying value	$ 9,353,035	9,719,821
Useful Life (in Years)	14 years
Unamortized Intangible Assets [Member]
Gross Carrying Amount	$ 5,320,000	5,320,000
Accumulated Amortization
Net carrying value	5,320,000	5,320,000
Unamortized Intangible Assets [Member] \| Trade Brands and Patent [Member]
Gross Carrying Amount	5,320,000	5,320,000
Accumulated Amortization
Net carrying value	$ 5,320,000	$ 5,320,000
Estimated useful lives	Indefinite

XML 52 R41.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Intangible Assets Details Narrative
Amortization expense	$ 429,525	$ 516,878	$ 859,050	$ 527,498

XML 53 R42.htm IDEA: XBRL DOCUMENT

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Accounts Payable And Accrued Expenses Details
Accounts payable	$ 1,742,666	$ 1,986,907
Sales tax payable	360,176	122,470
Accrued Interest Payable	110,217	96,633
Accrued expenses	1,313,439	211,390
Accounts payable and accrued expenses	$ 3,526,498	$ 2,417,400

XML 54 R43.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Total Debt	$ 1,311,995	$ 1,918,676
Less short-term portion	575,705	564,324
Long-term portion	736,290	1,354,352
Unsecured Promissory Demand Note [Member]
Total Debt		64,324
Convertible promissory note [Member]
Total Debt	500,000	500,000
Convertible promissory note one [Member]
Total Debt		102,582
Convertible promissory note two [Member]
Total Debt	75,705	31,615
Convertible promissory note three [Member]
Total Debt		1,220,155
Convertible promissory note four [Member]
Total Debt	$ 736,290

XML 55 R44.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE (Details Narrative)	1 Months Ended		6 Months Ended
NOTES PAYABLE (Details Narrative)	Feb. 22, 2017 USD ($)	Oct. 28, 2016	Jun. 23, 2017 USD ($) $ / shares	Jun. 30, 2017 USD ($) $ / shares	Dec. 31, 2016 USD ($) $ / shares	Dec. 16, 2016 $ / shares	Nov. 01, 2016 $ / shares	Dec. 14, 2015 $ / shares
Total Debt				$ 1,311,995	$ 1,918,676
Accrued interest				$ 110,217	$ 96,633
Common stock, par value \| $ / shares				$ 0.001	$ 0.001
Senior Convertible Promissory Note A Due December 23, 2018 [Member]
Description of conversion price			convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.1362 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (Â“Conversion Price AÂ”), which Conversion Price A is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection.
Debt instrument maturity date			Dec. 23, 2018
Term of conversion feature			The conversion price of Note A will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect.
Additional term of conversion feature			In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) day’s notice, that the holder convert Note A at Conversion Price A.
Description of prepayment			The Company may prepay in cash any portion of the outstanding principal amount of Note A and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of Note A; (ii) 115% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of Note A; or (iii) 125% of the sum of the then-outstanding principal amount of Note A plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of Note A.
Senior Convertible Promissory Note Due December 23, 2018 [Member]
Common stock, par value \| $ / shares			$ 0.001
Principal amount			$ 3,000,000
Purchase price			3,000,000
Common stock average trading volume to activate conversion feature			$ 2,500,000
Senior convertible promissoryNote B [Member]
Principal amount	$ 3,000,000
Purchase price	$ 3,000,000
Senior convertible promissory note [Member]
Description of conversion price	Conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (the Conversion Price), which Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection.
Debt instrument maturity date	Aug. 22, 2018
Term of conversion feature	The conversion price of the Note will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. All interest payments under the Note are payable, at the Company’s option, in cash or shares of Common Stock.
Additional term of conversion feature	In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) day’s notice, that the holder convert Note B at Conversion Price B.
Description of prepayment	The Company may prepay in cash any portion of the outstanding principal amount of the Note and any accrued and unpaid interest by, upon ten (10) days' written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the Note; (ii) 115% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the Note; or (iii) 125% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the Note.
Senior convertible promissory note [Member] \| Minimum [Member]
Common stock average trading volume to activate conversion feature	$ 2,500,000
Unsecured Promissory Demand Note [Member]
Total Debt					$ 64,324
Interest rate				4.00%
Common stock, par value \| $ / shares				$ 0.75
Convertible promissory note [Member]
Total Debt				$ 500,000	500,000
Interest rate		1.00%						12.00%
Conversion price \| $ / shares								$ 0.1211
Convesion price, percentage		0.90
Convertible promissory note one [Member]
Total Debt					102,582
Interest rate							12.00%
Conversion price \| $ / shares							$ 0.35
Convertible promissory note two [Member]
Total Debt				75,705	31,615
Interest rate						12.00%
Conversion price \| $ / shares						$ 0.27
Convertible promissory note three [Member]
Total Debt					$ 1,220,155
Interest rate			12.00%
Conversion price \| $ / shares			$ 0.1362

XML 56 R45.htm IDEA: XBRL DOCUMENT

CONTINGENT CONSIDERATION LIABILITY (Details) - USD ($)	3 Months Ended		6 Months Ended
CONTINGENT CONSIDERATION LIABILITY (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2017
Contingent Consideration Liability Details
Contingent Consideration, begning balance	$ 16,434,620	$ 12,085,859	$ 12,085,859
Change in Fair Market Valuation of Contingent Consideration	77,286	4,348,761
Contingent Consideration, ending babance		16,434,620
Performance-Based Cash Contingent Consideration		2,088,000
Market-Based Stock Contingent Consideration		14,346,620
Total		$ 16,434,620

XML 57 R46.htm IDEA: XBRL DOCUMENT

CONTINGENT CONSIDERATION LIABILITY (Details 1) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Contingent Consideration Liability Details 1
Contingent Consideration, begning balance	$ 16,434,620	$ 12,085,859		$ 12,085,859
Change in Fair Market Valuation of Contingent Consideration	77,286	4,348,761
Payment of Contingent Consideration in Cash	(2,088,000)
Settlement of Contingent Consideration	(4,739,638)			(4,739,638)
Settlement of Contingent Consideration Recorded Against Additional Paid-In Capital	(4,692,697)			(4,692,697)
Gain on Settlement of Contingent Consideration	(4,991,571)			(4,991,571)
Contingent Consideration, ending babance		$ 16,434,620

XML 58 R47.htm IDEA: XBRL DOCUMENT

CONTINGENT CONSIDERATION LIABILITY (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Contingent Consideration					$ 12,085,859
Expected contingent consideration liability	15,305,463		15,305,463
Gain on Settlement of Contingent Consideration Liability	(4,991,571)		(4,991,571)
Loss on Fair Market Valuation of Contingent Consideration	77,286		$ 4,426,047
Final contingent consideration	$ 16,500,000
Contingent consideration, shares issued	18,100,000
Contingent consideration, shares issued value	$ 4,789,638
Contingent consideration, cash payment	2,100,000
Shares released from escrow, value	$ 14,400,000
Additional shares clawed-back, shares	34,200,000		34,200,000
Additional shares clawed-back, value	$ 9,684,268		$ 9,684,268
Market-Based Clawback associated with common stock	35,100,000		35,100,000
Additional shares clawed-back pursuant to disputes between the sellers	34,200,000		34,200,000
Black Oak merger [Member]
Contingent Consideration	$ 12,754,553		$ 12,754,553
Gain on Settlement of Contingent Consideration Liability			1,100,000
April 1, 2016 (Acquisition Date) [Member]
Contingent Consideration	12,754,553		12,754,553
April 1, 2017 (Acquisition Date) [Member]
Contingent Consideration	$ 16,434,620		$ 16,434,620

XML 59 R48.htm IDEA: XBRL DOCUMENT

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Derivative liability - Conversion Feature	$ 3,163,000	$ 6,987,000
Contingent Consideration		12,085,859
Fair value of financial liabilities	3,163,000	19,072,859
Fair Value Measurement Using, Level 1 [Member]
Derivative liability - Conversion Feature
Contingent Consideration
Fair value of financial liabilities
Fair Value Measurement Using, Level 2 [Member]
Derivative liability - Conversion Feature
Contingent Consideration
Fair value of financial liabilities
Fair Value Measurement Using, Level 3 [Member]
Derivative liability - Conversion Feature	3,163,000	6,987,000
Contingent Consideration		12,085,859
Fair value of financial liabilities	$ 3,163,000	$ 19,072,859