Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2017
Notes to Financial Statements  
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
March 31,		     Fair Value Measurement Using  
Description   2017     Level 1     Level 2     Level 3  
                                 
Derivative Liabilities – Conversion Feature   $ 4,848,600     $ –     $ –     $ 4,848,600  
Liability – Contingent Consideration     16,434,620       –       –       16,434,620  
    $ 21,283,220     $ –     $ –     $ 21,283,220  

 

    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 March 31, 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 three months ended March 31, 2017 and 2016:

 

Balance at December 31, 2016   $ 6,987,000  
         
Change in Fair Market Value of Conversion Feature     (1,610,750 )
Derivative Debt Converted into Equity     (2,770,650 )
Issuance of Debt Instruments with Derivatives     2,243,000  
         
Balance at March 31, 2017   $ 4,848,600  

 

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 three months ended March 31, 2017:

 

Balance at December 31, 2016   $ 12,085,859  
         
Change in Fair Market Valuation of Contingent Consideration     4,348,761  
         
Balance at March 31, 2017   $ 16,434,620  

 

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 months ended March 31, 2017 and 2016.