INVESTMENTS, AT FAIR VALUE (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Assets and Liabilities measured at Fair Value on a Recurring Basis

The Company's financial instruments recorded at fair value have been categorized based upon a fair value hierarchy in accordance with accounting guidance. The following fair value hierarchy tables set forth the Company’s recurring fair value measurements at June 30, 2016 and December 31, 2015.

	Assets and Liabilities Measured at
	Fair Value on a Recurring Basis
	June 30, 2016
	Level 1		Level 2		Level 3		Total
Assets
Financial instruments, at fair value:
Common Stocks	$	—	$	—	$	8,149,214	$	8,149,214
Real Estate Company Investments		—		—		277,500		277,500
2014 Call Options		—		—		1,135,863		1,135,863
Series B Warrants		—		—		840,047		840,047
Total Financial instruments, at fair value		—		—		10,402,624		10,402,624
Total assets held at fair value	$	—	$	—	$	10,402,624	$	10,402,624

Liabilities
Financial instruments, at fair value:
Third Party Call Options		—		—		550,544		550,544
Total liabilities held at fair value	$	—	$	—	$	550,544	$	550,544

	Assets and Liabilities Measured at
	Fair Value on a Recurring Basis
	December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets
Financial instruments, at fair value:
Common Stocks	$	—	$	—	$	9,896,605	$	9,896,605
Real Estate Company Investments		—		—		277,500		277,500
2014 Call Options		—		—		1,135,863		1,135,863
Series B Warrants		—		—		1,851,750		1,851,750
Total Financial instruments, at fair value		—		—		13,161,718		13,161,718
Total assets held at fair value	$	—	$	—	$	13,161,718	$	13,161,718

Liabilities
Financial instruments, at fair value:
Third Party Call Options		—		—		619,122		619,122
Total liabilities held at fair value	$	—	$	—	$	619,122	$	619,122

Schedule of Investments in securities and unrealized gains

Details of the Company’s recurring fair value measurements are as follow:

June 30, 2016	Cost		Estimated Fair Value			Unrealized Gain (Loss)
ASSETS
Common Stocks	$	1,004,300	$	8,149,214		$	7,144,914
Real Estate Company Investments		277,500		277,500			—
2014 Call Options		450		1,135,863			1,135,413
Series B Warrants		—		840,047			840,047
	$	1,282,250	$	10,402,624		$	9,120,374

LIABILITIES
Third-Party Call Options	$	—	$	(550,544	)	$	(550,544	)

December 31, 2015	Cost		Estimated Fair Value			Unrealized Gain (Loss)
ASSETS
Common Stocks	$	1,004,992	$	9,896,605		$	8,891,613
Real Estate Company Investments		277,500		277,500			—
2014 Call Options		450		1,135,863			1,135,413
Series B Warrants		—		1,851,750			1,851,750
	$	1,282,942	$	13,161,718		$	11,878,776

LIABILITIES
Third Party Call Options	$	—	$	(619,122	)	$	(619,122	)

Schedule of significant unobservable inputs used in the fair value measurements

		Quantitative Information about Level 3
		Fair Value Measurements at June 30, 2016
		Fair	Valuation	Unobservable	Range
		Value	Technique	Inputs
Assets
Common Stock	$	8,149,214	Discounted cash flow Guideline company transactions method Guideline publicly-traded company method	Growth rate Risk premium factors Revenue multiple EBITDA multiple	13.00%-15.20% (2.50%)-7.00% 1.10-2.10 9.30-13.80
2014 Call Options		1,135,863	Discounted cash flow Guideline company transactions method Guideline publicly-traded company method	Growth rate Risk premium factors Revenue multiple EBITDA multiple	13.00%-15.20% (2.50%)-7.00% 1.10-2.10 9.30-13.80
Series B Warrants		840,047	Option pricing model	Duration Risk-free interest rate Volatility	0.09-0.42 years 0.20%-0.33% 50%
Investment in Real Estate Companies		277,500	Recent transaction
Total assets held at fair value	$	10,402,624

Liabilities
Call option liability	$	550,544	Option pricing model	Duration Risk-free interest rate Volatility	1.73-1.91 years 0.54%-0.57% 50%

Total liabilities held at fair value	$	550,544

		Quantitative Information about Level 3
		Fair Value Measurements at December 31, 2015
		Fair	Valuation	Unobservable	Range
		Value	Technique	Inputs
Assets
Common Stock	$	9,896,605	Discounted cash flow Guideline company transactions method Guideline publicly-traded company method	Growth rate Risk premium factors Revenue multiple EBITDA multiple	13.00%-15.20% (2.50%)-7.00% 1.10-2.10 9.30-13.80
2014 Call Options		1,135,863	Discounted cash flow Guideline company transactions method Guideline publicly-traded company method	Growth rate Risk premium factors Revenue multiple EBITDA multiple	13.00%-15.20% (2.50%)-7.00% 1.10-2.10 9.30-13.80
Series B Warrants		1,851,750	Option pricing model	Duration Risk-free interest rate Volatility	0.25-0.92 years 0.16%-0.62% 50%
Investment in Real Estate Companies		277,500	Recent transaction
Total assets held at fair value	$	13,161,718

Liabilities
Call option liability	$	619,122	Option pricing model	Duration Risk-free interest rate Volatility	2.23-2.40 years 1.12%-1.16% 50%

Total liabilities held at fair value	$	619,122

CAPSTONE FINANCIAL GROUP, INC. 10-Q