Note 15 - Fair Value of Financial Instruments

12 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

15. 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,
	2019		2018
Marketable securities (Level 1)	$	3,212,587	$	2,552,774
Interest rate swaps (Level 2)	$	227,214	$	66,706
Acquisition contingent consideration obligations (Level 3)	$	488,905	$	1,955,987
Redeemable non-controlling interest (Level 3)	$	5,476,000	$	1,992,939

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 combination of market approach and income approach 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 as of April 1, 2018	$	1,955,987		$	1,992,939
Payment of contingent consideration		(1,533,041	)		-
Contribution from non-controlling member		-			210,000
Distribution to non-controlling member		-			(75,508	)
Net income attributable to non-controlling interests		-			2,026,053
Fair value adjustment		-			1,322,516
Interest accrued on contingent consideration		65,959			-
Ending Balance as of March 31, 2019	$	488,905		$	5,476,000

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, 2019

and

2018.