Quarterly report pursuant to Section 13 or 15(d)

Fair Value of Financial Instruments

v3.10.0.1
Fair Value of Financial Instruments
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

 

As of June 30, 2018 and December 31, 2017, the carrying amounts of receivables, accounts payable and accrued expenses approximated their estimated fair values because of the short term nature of these financial instruments.

 

Fair value measurements-Level 2

 

Our notes payable are carried at cost and approximate fair value since the interest rates being charged approximate market rates.

  

Contingent Consideration

 

The Company’s contingent consideration of approximately $563,000 and $603,000 as of June 30, 2018 and December 31, 2017, respectively, are Level 3 liabilities. The fair value of the contingent consideration at June 30, 2018 and December 31, 2017 was primarily driven by changes in revenue estimates related to the acquisitions during 2015 and 2016, the passage of time and the associated discount rate. Due to the number of factors used to determine contingent consideration, it is not possible to determine a range of outcomes. Subsequent adjustments to the fair value of the contingent consideration liability will continue to be recorded in the Company’s results of operations until all contingencies are settled.

 

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3):

 

    Fair Value Measurement at Reporting  Date Using Significant Unobservable Inputs, Level 3  
    Six Months Ended June 30,  
    2018     2017  
Balance - January 1,   $ 603,411     $ 929,549  
Change in fair value     42,780       151,423  
Settlement in the form of shares issued     -       (331,676 )
Payments     (82,725 )     (33,114 )
Balance - June 30,   $ 563,466     $ 716,182