XML 23 R12.htm IDEA: XBRL DOCUMENT v3.19.2
Fair Value Measurements
 6 Months Ended
Jun. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements

6. Fair Value Measurements

 

Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy included in U.S. GAAP gives the highest priority to Level 1 inputs, which consist of unadjusted quoted prices for identical instruments in active markets. Level 2 inputs consist of quoted prices for similar instruments. Level 3 valuations are derived from inputs that are significant and unobservable, and these valuations have the lowest priority.

 

Management believes that the carrying values of cash and equivalents, accounts receivable, accounts payable, and accrued expenses approximate fair value because of their short maturity.

 

The table below reflects all notes payable at June 30, 2019 and December 31, 2018, respectively.

 

          June 30, 2019     December 31, 2018  
          Fair Value     Fair Value  
2016 Unrelated Notes   (a)     $

1,034,841

     $ 1,000,261  
2017 Unrelated Notes   (a)      

2,279,653

       2,275,686  
2018 Unrelated Notes   (b)       1,165,732       900,000  
Total         $

4,480,225

     $ 4,175,947  

 

      June 30, 2019   December 31, 2018 
      Fair Value   Fair Value 
The $250,000 Shealy Note  (c)  $24,014   $46,807 
2016 Related Notes  (a)   446,835    433,117 
2017 Related Notes  (a)   505,150    504,271 
2018 Related Notes  (b)   518,103    400,000 
Total     $1,470,088   $1,384,195 

 

  (a) The fair value was based upon Level 2 inputs. See Note 8 for additional information about the Company’s 2016 and 2017 Unrelated Notes. See Note 9 for additional information about the Company’s 2016 and 2017 Related Notes.
  (b) The fair value was based upon Level 2 inputs as of June 30, 2019. The 2018 Unrelated and Related Notes were closed in September 2018 between market participants, therefore, given proximity of the transactions to year-end, fair value approximated carrying value at December 31, 2018. See Note 8 for additional information about the Company’s 2018 Unrelated Notes. See Note 9 for additional information about the Company’s 2018 Related Notes.
  (c) The fair value was based upon Level 2 inputs. Short term maturity and interest rate approximates rate that the Company realized with issuance of new debt in September 2018; therefore, carrying value approximates fair value. See Note 9 for additional information about the Company’s $250,000 Shealy Note.