Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value of Warrants that were Accounted for on a Recurring Basis Classified as Level 3 Assets

The following table reconciles the beginning and ending balances of the Company’s Level 3 recurring assets:


	2016
Fair value of warrants at beginning of period	$	-
Fair value of new warrants, recorded during the year (included as a discount on notes receivable)		55,378
Unrealized loss on fair valuation of warrants		(4,081)
Fair value of warrants at end of period	$	51,297

Summary of Valuation Techniques and Significant Unobservable Inputs Used

The following table summarizes the valuation techniques and significant unobservable inputs used for the Company’s recurring and non-recurring fair value calculation/adjustments categorized as Level 3 in the fair value hierarchy at December 31, 2016:


December 31, 2016
	Valuation	Valuation	Unobservable	Range of
Name	Frequency	Technique	Inputs	Input Values
Warrants	Recurring	Black-Scholes formulation	Stock price	$2.54 - $2.98
			Exercise price	$2.54 - $3.98
			Time to maturity (in years)	9.63 - 14.95
			Risk-free interest rate	2.43% - 2.62%
			Annualized volatility	49.08% - 108.99%

Estimated Fair Values of Financial Instruments

The following tables present estimated fair values of the Company’s financial instruments in accordance with the guidance provided by the Financial Instruments Topic of the FASB Accounting Standards Codification at December 31, 2016 and 2015:


	December 31, 2016
	Carrying Amount	Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents	$ 3,429,446	$ 3,429,446	$ -	$ -	$ 3,429,446
Notes receivable, net	1,451,285	-	-	1,451,285	1,451,285
Fair value of warrants	51,297	-	-	51,297	51,297

	December 31, 2015
	Carrying Amount	Level 1	Level 2	Level 3	Total
Financial assets:
Cash and cash equivalents	$ 500	$ 500	$ -	$ -	$ 500