Annual report pursuant to Section 13 and 15(d)

FAIR VALUE MEASUREMENTS

v3.7.0.1
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
NOTE 11. FAIR VALUE MEASUREMENTS

NOTE 11 – 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:

 

Description   Fair Value at December 31, 2016   Fair Value Measurement Using  
  Level 1   Level 2   Level 3  
                           
Derivative Liabilities – Conversion Feature   $ 6,975,000   $ –   $ –   $ 6,975,000  
Liability - Black Oak Contingent Consideration     12,085,859     –     –     12,085,859  
                           
    $ 19,060,859   $ –   $ –   $ 19,060,859  
                           

 

Description   Fair Value at December 31, 2015   Fair Value Measurement Using  
  Level 1   Level 2   Level 3  
                           
Derivative Liabilities – Conversion Feature   $ 743,400   $ –   $ –   $ 743,400  
Liability - Black Oak Contingent Consideration     –     –     –     –  
                           
    $ 743,400   $ –   $ –   $ 743,400  
                           
                           
                             

 

No financial assets were measured on a recurring basis as of December 31, 2016 and 2015.

 

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 year ended December 31, 2016:

 

Balance at December 31, 2014   $ 1,253,000    
           
Change in Fair Market Value of Conversion Feature     (1,800,100 )  
Issuance of Equity Instruments with Debt Greater Than Debt Carrying Amount     561,000    
Derivative Debt Converted into Equity     (1,168,500 )  
Issuance of Debt Instruments with Derivatives     1,898,000    
           
Balance at December 31, 2015     743,400    
           
Change in Fair Market Value of Conversion Feature     489,700    
Issuance of Equity Instruments with Debt Greater Than Debt Carrying Amount     1,487,500    
Derivative Debt Converted into Equity     (14,232,100 )  
Issuance of Debt Instruments with Derivatives     18,486,500    
           
Balance at December 31, 2016   $ 6,975,000    
           

 

The following table presents a reconciliation of the Black Oak Contingent Consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2016:

 

Balance at December 31, 2015   $ –    
           
Purchase of Black Oak Gallery     12,754,553    
Change in Fair Market Valuation of Black Oak Contingent Consideration     (668,694 )  
           
Balance at December 31, 2016   $ 12,085,859    
           

 

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 years ended December 31, 2016, 2015 or 2014.