Annual report pursuant to Section 13 and 15(d)

Note 3 - Fair Value of Financial Instruments

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Note 3 - Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

Note 3. Fair Value of Financial Instruments

 

Management believes the fair values of the obligations under the secured borrowing arrangement and the convertible notes with a related party approximate carrying value because the debt carries market rates of interest available to the Company, and are both short-term in nature. The Company’s remaining financial instruments consisted primarily of accounts receivable, accounts payable, accrued liabilities and accrued restructuring charges, all of which are short-term in nature with fair values approximating carrying value. As of December 31, 2016 and 2015, the Company held no assets or liabilities that required remeasurement at fair value on a recurring basis.

 

During the year ended December 31, 2016, management came to the conclusion that $1.8 million of long-lived assets were impaired, based on level 3 valuations regarding the termination of certain manufacturing agreements with Capstone and the termination of the Endorsement Licensing and Co-Branding Agreement related to our Arnold Schwarzenegger product line. Based on the termination of these agreements, management determined the assets related to these agreements had no future value. See additional information in Note 6 and Note 7. The Company did not recognize any impairment charges on its assets during the year ended December 31, 2015.