Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2014

Note 6.

Fair Value of Financial Instruments

The Company’s disclosures of the fair value of financial instruments is based on a fair value hierarchy which prioritizes the inputs to the valuation techniques used to measure fair value into three levels. Level 1 inputs are unadjusted quoted market prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for assets or liabilities, and reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

The estimated fair value of the Company’s assets and liabilities as of June 30, 2014 and December 31, 2013 were as follows (in thousands):

	Level 1		Level 2		Level 3		Total		Carrying Value
June 30, 2014

Assets:
Cash, cash equivalents, restricted cash	$	994					$	994	$	994
Receivables		3,947						3,947		3,947
Certificate of deposit		9,000						9,000		9,000
Investment in equity securities						300		300		2,701
Total	$	13,941	$	-	$	300	$	14,241	$	16,642

Liabilities
Accounts payable and other accrued liabilities	$	2,916					$	2,916	$	2,916
Advances on line of credit		7,710						7,710		7,710
Debt obligations						26,020		26,020		26,074
Total	$	10,626	$	-	$	26,020	$	36,646	$	36,700

December 31, 2013

Assets:
Cash, cash equivalents, restricted cash	$	1,959					$	1,959	$	1,959
Receivables		4,522						4,522		4,522
Certificate of deposit		9,000						9,000		9,000
Investment in equity securities						300		300		2,701
Total	$	15,481	$	-	$	300	$	15,781	$	18,182

Liabilities
Accounts payable and other accrued liabilities	$	3,014					$	3,014	$	3,014
Advances on line of credit		8,840						8,840		8,840
Debt obligations						32,418		32,418		32,461
Total	$	11,854	$	-	$	32,418	$	44,272	$	44,315

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details