Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 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

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.