Note 6 - Commitments and Contingencies
Operating Leases
The Company’s corporate office space, as well as certain office equipment, is leased under
operating lease agreements. Total rent expense was approximately $309,800 and $344,800
for the years ended December 31, 2017 and 2016, respectively.
The remaining non-cancelable lease commitments for the corporate office space and leased
equipment as of December 31, 2017 were as follows:
(in thousands) Amount
2018 $ 348
2019 343
2020 333
2021 338
2022 199
Total $ 1,561
Note 7 — Financial Measurement and Fair Value of Financial Instruments
Management uses its best judgment in estimating the fair value of its financial instruments.
However, there are inherent weaknesses in any estimation technique. Therefore, for substan-
tially all financial instruments, the fair value estimates herein are not necessarily indicative of
the amounts that we could realize in a sales transaction for these instruments. The estimated
fair value amounts have been measured as of the period end and have not been reevaluated or
updated for purposes of these consolidated financial statements subsequent to those respec-
tive dates.
A fair value hierarchy is used, which prioritizes the inputs to valuation methods used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable
inputs (Level 3 measurements). The three levels of fair value hierarchy are as follows:
Level 1: Based on quoted prices in active markets for identical assets.
Level 2: Based on significant observable inputs.
Level 3: Based on significant unobservable inputs.
An asset or liability’s level within the fair value hierarchy is based on the lowest level of
input that is significant to the fair value measurement.
26
