Note 14 - Fair Value of Financial Instruments

12 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures and reports financial assets and liabilities at fair value, on a recurring basis. Fair value measurement is classified and disclosed in

one

of the following

three

categories:

Level 

1:

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 

2:

Quoted prices in markets that are

not

active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 

3:

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or

no

market activity).

The following consolidated balance sheet items are measured at fair value:

	Fair Value Measurements at March 31,
	2018		2017
Marketable securities (Level 1)	$	2,552,774	$	4,593,667
Interest rate swaps (Level 2)	$	66,706	$	-
Acquisition contingent consideration obligations (Level 3)	$	1,955,987	$	3,023,031
Redeemable Non-Controlling Interest (Level 3)	$	1,992,939	$	1,443,901

The fair values of our interest rate swaps are based on the market standard methodology of netting the discounted expected future variable cash receipts and the discounted future fixed cash payments. The variable cash receipts are based on an expectation of future interest rates derived from observed market interest rate forward curves. Since these inputs are observable in active markets over the terms that the instruments are held, the derivatives are classified as Level

2

in the hierarchy.

The fair value of the acquisition contingent consideration obligations is based on a discounted cash flow analysis using projected EBITDA over the earn-out period and is classified as Level

3

in the hierarchy.

The fair value of the redeemable non-controlling interest is based on a market approach using a book value multiple and is classified as Level

3

in the hierarchy.

The fair value measurements which use significant observable inputs (Level

3

), changed due to the following:

	Acquisition Contingent Consideration Obligations			Redeemable Non-Controlling Interest
Beginning Balance	$	3,023,031		$	1,443,901
Payment of contingent consideration		(1,100,000	)		-
Capital contribution by non-controlling member		-			252,000
Net income attributable to non-controlling interests		-			254,938
Fair value adjustment		-			42,100
Interest accrued on contingent consideration		32,956			-
	$	1,955,987		$	1,992,939

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, notes receivable and accounts payable approximate their fair value at

March 31, 2018

and

2017.