Capstone Financial 10-Q 20 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 03, 2015
Document And Entity Information
Entity Registrant Name	CAPSTONE FINANCIAL GROUP, INC.
Entity Central Index Key	1,558,432
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		94,364,148
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

UNAUDITED CONDENSED STATEMENTS

UNAUDITED CONDENSED STATEMENTS OF FINANCIAL CONDITION - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Investments, at fair value	$ 11,861,551	$ 28,838,301
Cash	$ 425,270	12,685
Note receivable		603,952
Prepaid expense	$ 675	86,209
Furniture and equipment, net	7,039	6,500
Deposit	85,000	65,000
Total assets	12,379,535	29,612,647
LIABILITIES
Accrued expenses	127,058	48,547
Accrued interest payable - related party	190	4,431
Short term advances payable - related party	180,151	94,306
Note payable - related party	$ 68,416	1,203,552
Deferred Revenue		116,662
Put and Call option liability	$ 387,947	$ 9,973,684
Income taxes payable	800
Deferred tax liability	4,222,599	$ 6,742,723
Total liabilities	4,987,161	18,183,905
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 2,000,000,000 shares authorized; 94,364,148 and 94,564,648 issued and outstanding as of September 30, 2015 and December 31, 2014, respectively	94,365	94,565
Additional paid in capital	957,407	1,176,633
Retained earnings (deficit)	6,340,602	10,157,544
Total stockholders' equity	7,392,374	11,428,742
Total liabilities and stockholders' equity	$ 12,379,535	$ 29,612,647

UNAUDITED CONDENSED STATEMENTS3

UNAUDITED CONDENSED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	2,000,000,000	2,000,000,000
Common stock shares issued	94,364,148	94,564,648
Common stock shares outstanding	94,364,148	94,564,648

UNAUDITED CONDENSED STATEMENTS4

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenues
Services income	$ 16,660	$ 33,335	$ 116,662	$ 33,335
Other income	$ 1,800		1,800
Interest - related party		$ 11,140	14,460	$ 29,835
Total revenue	$ 18,460	44,475	132,922	63,170
Operating expenses:
Payroll expense	137,048	57,926	228,593	180,081
Professional fees	318,808	39,745	920,402	225,267
General and administrative	451,862	120,870	760,187	486,806
Interest expense - related party	2,200	4,276	10,724	16,107
Total operating expenses	909,918	222,817	1,919,906	908,261
Realized and Unrealized Gain (Loss) on Financial Instruments
Realized gain (loss) on financial instruments, net	346,368	5,874	(480,088)	19,458
Unrealized (loss) gain on financial instruments, net	(2,213,158)	19,190,577	(4,069,194)	19,187,658
(Loss) gain on financial instruments, net	(1,866,790)	19,196,451	(4,549,282)	19,207,116
Net (loss) income before income taxes	(2,758,248)	19,018,109	(6,336,266)	18,362,025
Income tax (benefit)	(1,076,278)	7,283,827	(2,519,324)	7,283,827
Net (loss) income	$ (1,681,970)	$ 11,734,282	$ (3,816,942)	$ 11,078,198
Net (loss) income per share - basic and diluted	$ (0.02)	$ 0.12	$ (0.04)	$ 0.12
Weighted average shares outstanding - basic and diluted	94,364,181	94,089,281	94,494,161	93,353,609

UNAUDITED CONDENSED STATEMENT O

UNAUDITED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings	Total
Balance at Dec. 31, 2014	$ 94,565	$ 1,176,633	$ 10,157,544	$ 11,428,742
Balance, in shares at Dec. 31, 2014	94,564,648
Net loss			$ (3,816,942)	(3,816,942)
Treasury stock, at cost	$ (200)	$ (219,226)		(219,426)
Treasury stock, at cost, in shares	(200,500)
Balance at Sep. 30, 2015	$ 94,365	$ 957,407	$ 6,340,602	$ 7,392,374
Balance, in shares at Sep. 30, 2015	94,364,148

UNAUDITED CONDENSED STATEMENTS6

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$ (3,816,942)	$ 11,078,198
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Sale (purchase) of financial investments, net	2,841,731	(8,838)
Net change in unrealized gain on financial investments, net	4,069,194	(19,187,658)
Net change in realized gain on financial securities, net	(480,088)	$ 19,458
Depreciation	1,500
(Increase) decrease in assets:
Note receivable	400,000
Accrued interest receivable - related party	(14,459)	$ (28,806)
Prepaid expense	85,534	16,895
Deposits	$ (20,000)	35,000
Increase (decrease) in liabilities:
Accounts payable		(12,973)
Accrued expenses	$ 78,511	(8,569)
Accrued interest payable - related party	(4,241)	15,079
Deferred revenue	(116,662)	166,665
Net repayments on notes payable - related party	(1,135,136)	$ (519,429)
Net proceeds from short term advances - related party	85,845
Income taxes payable	800
Deferred tax liability	(2,520,124)	$ 7,283,827
Net cash provided by (used in) operating activities	415,639	$ (1,170,609)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and equipment	(2,039)
Net cash used in investing activities	$ (2,039)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock, net of offering costs		$ 1,308,700
Purchase of treasury stock	$ (1,015)
Net cash (used in) provided by financing activities	(1,015)	$ 1,308,700
Increase in cash	412,585	$ 138,091
Cash at beginning of period	12,685
Cash at end of period	425,270	$ 138,091
Supplemental Disclosure of Cash Flow Information:
Noncash purchase of treasury stock	$ 218,411

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	9 Months Ended
	Sep. 30, 2015
Organization And Description Of Business
ORGANIZATION AND DESCRIPTION OF BUSINESS	NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Organization The business focus of Capstone Financial Group, Inc. (the "Company") is to invest in equity securities of other companies. The Company seeks to discover, unlock and grow value in privately-held or illiquid companies, including through the exercise of friendly influence at a company in support of operational improvements and strategic initiatives. In some cases, the Company might be one of the largest shareholders of the other company. The Company seeks to work closely and constructively with the management and boards of the other companies. While the Company does not manage the day-to-day operations of these companies, the Company seeks to maintain a thorough understanding of how they operate and evaluate their performance and prospects on an ongoing basis. The Company may also seek to actively trade in its strategic investment positions and/or enter into private securities transactions with regard to those positions, to capitalize on price fluctuations and realize profits or minimize losses. The Company was incorporated on July 10, 2012 under the laws of the State of Nevada, as Creative App Solutions, Inc. On August 23, 2013, the Company amended its articles of incorporation and changed its name to Capstone Financial Group, Inc. Through December 31, 2012, the Company had not commenced significant operations and, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915, the Company was considered a development stage company. During the year ended December 31, 2013, the Company exited the development stage. Effective in 2014, the Company transitioned its business plan to its current business focus. At September 30, 2015 the Company’s investments are primarily focused in one entity, Twinlab Consolidated Holdings, Inc. (“Twinlab”). Management believes that it will be able to liquidate a sufficient portion of its investment and/or raise additional capital to avoid and/or satisfy its call obligations as and when they become due and/or are exercised. However, no assurance can be given that market conditions in the future will continue to allow the Company to sell its investments in sufficient quantities to enable full warrant exercises or to raise additional capital to do so (see Note 4).

BASIS OF PRESENTATION

BASIS OF PRESENTATION	9 Months Ended
	Sep. 30, 2015
Basis Of Presentation
BASIS OF PRESENTATION	NOTE 2 – BASIS OF PRESENTATION The accompanying financial statements have been prepared using the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the accounting and financial reporting conventions of the investment company industry and in accordance with the instructions to Form 10-Q and Article 8 of Securities and Exchange Commission (“SEC”) Regulation S-X. Accordingly, they should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2014, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 30, 2015. The unaudited condensed financial statements contain all normal recurring accruals and adjustments that in the opinion of management, are necessary to present fairly the financial position of the Company at September 30, 2015, the results of the Company’s operations for the three months and nine months periods ended September 30, 2015 and the Company’s cash flows for the nine months ended September 30, 2015. It should be understood that accounting measurements at interim dates inherently involve greater reliance on estimates than at year-end. The results of operations for the three months and nine months periods ended September 30, 2015 are not necessarily indicative of the results to be expected for the full year or any future interim periods.

RECENT ACCOUNTING PRONOUNCEMENT

RECENT ACCOUNTING PRONOUNCEMENTS	9 Months Ended
	Sep. 30, 2015
Recent Accounting Pronouncements
RECENT ACCOUNTING PRONOUNCEMENTS	NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS The Company has evaluated the recent accounting pronouncements through the date of this filing, and management does not expect adoption of such pronouncements to have a material impact on the Company’s financial position or results of operations.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Sep. 30, 2015
Debt Disclosure [Abstract]
FAIR VALUE MEASUREMENTS	NOTE 4 – FAIR VALUE MEASUREMENTS GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a fair value hierarchy that prioritizes the use of inputs used in valuation methodologies into the following three levels: • Level 1: Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. • Level 2: Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means. • Level 3: Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. The Company’s financial instruments are valued by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The valuation methodology for each investment type and discussion of key unobservable inputs is described below. The Company often invests in common stocks that are thinly traded where the closing trading price is not considered to be a fair indication of the value for which the Company can sell or buy the common stock. In such cases, as in the case of private-company limited liability company membership interests held by the Company, the common stock must be analyzed to determine what exit price the Company would receive when liquidating the position. These positions are classified as Level 3 securities. The significant unobservable inputs used in the fair value measurement of the Company’s Level 3 common stocks are recent open market and non open-market transactions with unrelated parties. Increases or decreases in any of those inputs in isolation would result in a lower or higher fair value measurement, respectively. The Company has warrants and call options to purchase common stock in illiquid public companies. Generally, there is no established market for these investments. The Company values these warrants and call options by using a model that takes into consideration the exercise or call price of the warrant or call option, the price of the underlying common stock and the expiration date of the warrant or call option. The significant unobservable inputs used in the fair value measurement of the Company’s warrants and call options includes the price of the underlying thinly traded common stock, duration and discount rate and volatility. Increases or decreases in the premium-to-parity would result in a higher or lower fair value measurement, respectively Common Stocks Generally, when the Company invests in common stocks that are traded on the NASDAQ Markets or over-the-counter markets (such as the OTCBB, OTCQB or OTC Pink marketplaces), such common stocks are valued at the last traded price. If there is no trade on a measurement date, the Company will typically value the common stock at the closing bid price. However, in certain circumstances, the closing trading price is not considered to be a fair Limited Liability Company Interests From time to time, the Company has investments in private limited liability companies. Generally, there is no established market for these investments. The Company values these interests by means of both quantitative and qualitative measures, generally including the financial stability of the company, the economic rights of the interests and the economic prospects of the company. The significant unobservable input used in the fair value measurement of the Company’s limited liability company investments is the expected recovery of contributed capital. Increases or decreases in the expected recovery would result in a higher or lower fair value measurement, respectively. Derivative Financial Instruments Derivative financial instruments include call options and warrants at September 30, 2015 and December 31, 2014. Derivatives are accounted for at fair value with changes in fair value reported in operations. The significant unobservable inputs used in the fair value measurement of the Company’s derivative financial instruments include the underlying common stock, duration, volatility and discount rate, which are used in the option pricing model. Changes to any of those inputs in isolation would result in fluctuations in the fair value measurement. Quantitative Information about Level 3 Fair Value Measurements at September 30, 2015 Fair Value Valuation Unobservable Range Assets Common Stock $ 8,897,917 Recent sales January 2015 – October, 2015 Real Estate Company Investments 277,500 Recent sales July 2015 2014 Call Options 974,025 Option pricing model Duration 0.2 – 1.2 years Series B Warrants 1,712,109 Option pricing model Duration 0.2 – 1.2 years Total assets held at fair value $ 11,861,551 Liabilities Third-Party Call Options $ (387,947 ) Option pricing model Duration 2.5 – 2.7 years Total liabilities held at fair value $ (387,947 ) Financial instruments, net are comprised of the following at September 30, 2015. Cost Estimated ASSETS Common Stock $ 1,005,182 $ 8,897,916 Real Estate Company Investments 277,500 277,500 2014 Call Options 450 974,025 Series B Warrants — 1,712,109 1,283,132 11,861,551 LIABILITIES Third-Party Call Options $ — $ (387,947 ) $ — $ (387,947 ) Financial instruments, net are comprised of the following at December 31, 2014. Cost Estimated ASSETS Common Stocks $ 6,212 $ 8,018,621 2014 Call Options 2,492 6,644,680 Series A Warrants — 9,947,368 Series B Warrants — 4,227,632 $ 8,704 $ 28,838,301 LIABILITIES Warrant Put Option $ — $ (9,973,684 ) During the first quarter of 2014, the Company purchased shares in a company (other than Twinlab) traded on the OTC Markets for a total of $2,919. The Company currently categorizes these holdings as Level 3 assets. As of September 30, 2015, this investment is carried at $0 value under management’s valuation guidelines. In August 2014, the Company purchased 10,987,500 split-adjusted shares of common stock of Twinlab in private transactions from 25 shareholders for total consideration of $3,296. In August 2014, the Company purchased options to acquire 8,743,000 outstanding shares of Twinlab’s Common Stock (collectively, the “2014 Call Options”) in a private transaction from 14 stockholders, for total consideration of $2,623. The 2014 Call Options exercise price was $0.0001 per share and the term of the 2014 Call Options expired in August 2015. Such options were immediately exercisable and in February 2015, the Company exercised 7,244,500 of those options. In September 2014, Twinlab issued to the Company a Series A Warrant to purchase up to 52,631,579 shares of Twinlab’s Common Stock at an exercise price of $0.76 per share (the “Series A Warrant”) and a Series B Warrant to purchase up to 22,368,421 shares of Twinlab’s Common Stock at an exercise price of $0.76 per share (the “Series B Warrant”). Both the Series A Warrant and the Series B Warrant were exercisable from October 2014 through October 2017. Twinlab and the Company also entered into a Common Stock Put Agreement, dated as of September 30, 2014, as amended on December 15, 2014 (the “Put Agreement”). Pursuant to the Put Agreement, if the Company did not exercise the Series A Warrant by February 16, 2015 and thereafter at a rate of no less than 1,461,988 shares of Common Stock (the “Minimum Amount”) per month (the “Minimum Rate”) over the term of the Series A Warrant, Twinlab had the right (subject to certain conditions) to require the Company to exercise the Series A Warrant at the Minimum Rate for the duration of the Series A Warrant. During the nine months ended September 30, 2015, the Company sold an aggregate of 3,976,647 units of Twinlab securities to various unrelated third party accredited investors. Each unit consisted of one share of (unrestricted) Twinlab common stock and a detachable call option to purchase from the Company, for $1.00 per share, one (restricted) share of Twinlab common stock. The term of each such call option was three years from the respective unit sale date. In addition, during the nine months ended September 30, 2015, the Company sold an aggregate of 1,445,360 shares of (unrestricted) Twinlab common stock (without any associated detachable call options) to various unrelated third party accredited investors, for $0.76 per share. Twinlab and the Company also entered into a Compromise Agreement and Release and an Amendment No. 1 to Series B Warrant, each dated as of May 28, 2015, pursuant to which, among other things: (a) the Company surrendered the entire remaining-unexercised portion of the Series A Warrant (51,973,684 warrants) and 4,368,421 of the warrants under the Series B Warrant; (b) the Put Agreement was terminated; (c) the remaining 18,000,000 warrants under the Series B Warrant were deemed divided into four tranches, each with an associated date beyond which it would no longer be exercisable: one tranche for 2,000,000 warrant shares (no longer exercisable after November 30, 2015), one for 4,000,000 warrant shares (no longer exercisable after March 31, 2016), one for 6,000,000 warrant shares (no longer exercisable after July 31, 2016) and another for 6,000,000 warrant shares (no longer exercisable after November 30, 2016); and (d) the Company granted Twinlab three contingent call options, at $0.01 per share, to acquire Twinlab shares from the Company to the extent that upon effective expiration of the second, third and fourth tranches the Company had not exercised the warrants within such tranches (the “Contingent Call Options”). The three Contingent Call Options would be for a number of Twinlab shares equal to 25% of such unexercised warrants (i.e., a maximum of 1,000,000 shares if the Company exercised no warrants from the second tranche, a maximum of 1,500,000 shares if the Company exercised no warrants from the third tranche and a maximum of 1,500,000 shares if the Company exercised no warrants from the fourth tranche). In addition, Twinlab cannot exercise a Contingent Call Option unless it has satisfied such option’s “Liquidity Condition,” namely that for each of the three or four months before the tranche’s effective expiration date Twinlab must have a financial position sufficient to show a 1.15x fixed charge coverage ratio for a certain trailing period, all as defined by Twinlab’s Credit and Security Agreement dated January 22, 2015. Twinlab also agreed in the Compromise Agreement and Release that, given that the Company has identified, and may in the future identify, to Twinlab on a confidential basis persons to whom the Company might sell the Company’s Twinlab shares, Twinlab shall not, without the Company’s prior written consent, privately place Twinlab equity securities to any persons theretofore or thereafter first introduced to Twinlab by the Company; provided that Twinlab may, without the Company’s consent, privately place Twinlab equity securities to such a person at any time after the earlier of (a) the date the entire Series B Warrant has expired and/or been exercised, or (b) the first anniversary of such particular introduction. On October 1, 2015, Twinlab and the Company entered into Amendment No. 1 to Agreement for Limited Waiver of Non-Circumvention Provision and to Compromise Agreement and Release, pursuant to which a prior agreement calling for contingent payments of cash and equity to the Company was amended to remove the Company’s right to any such contingent payments of cash and equity compensation, and in return the three Contingent Call Options were immediately eliminated. The Contingent Call Options were valued at $0 at September 30, 2015. In July 2015, in exchange for $277,500, the Company acquired a 20% interest in privately-held Western New York real estate companies LC Strategic Realty, LLC and LC Strategic Holdings, LLC, as well as in all other business conducted or to be conducted by the firms’ majority holders to the extent such other business has a primary focus on (a) real estate (subject to the exclusion of certain specified projects), (b) media/entertainment/show business, or (c) endorsements/advertisements/personal appearances/use of likeness/monetization of celebrity. Fair Value of Financial Instruments The Company's financial instruments recorded at fair value have been categorized based upon a fair value hierarchy. The following fair value hierarchy table presents information about the Company's financial instruments measured at fair value. Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2015 Level 1 Level 2 Level 3 Total Assets Financial instruments, at fair value: Common Stocks $ — $ — $ 8,897,917 $ 8,897,917 Real Estate Company Investments — — 277,500 277,500 2014 Call Options — — 974,025 974,025 Series B Warrants — — 1,712,109 1,712,109 Total financial instruments, at fair value — — 11,861,551 11,861,551 Total assets held at fair value $ — $ — $ 11,861,551 $ 11,861,551 Liabilities Financial instruments, at fair value: Third-Party Call Options $ — $ — $ 387,947 $ 387,947 Total liabilities held at fair value $ — $ — $ 387,947 $ 387,947 Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2014 Level 1 Level 2 Level 3 Total Assets Financial instruments, at fair value: Common Stocks $ — $ — $ 8,018,621 $ 8,018,621 2014 Call Options — — 6,644,680 6,644,680 Series A Warrants — — 9,947,368 9,947,368 Series B Warrants — — 4,227,632 4,227,632 Total Financial instruments, at fair value — — 28,838,301 28,838,301 Total assets held at fair value $ — $ — $ 28,838,301 $ 28,838,301 Liabilities Financial instruments, at fair value: Warrant Put Option — — 9,973,684 9,973,684 Total liabilities held at fair value $ — $ — $ 9,973,684 $ 9,973,684 This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs used in valuing certain financial assets and liabilities were unavailable. In situations where there is little, if any, market activity for an asset or liability at the measurement date, the fair value measurement objective remains to measure the financial asset at the price that would be received by the holder of the financial asset (or liability) in an orderly transaction that is not a forced liquidation or distressed sale at the measurement date. The following table includes a roll forward of the amounts for the nine months ended September 30, 2015 for financial instruments classified within Level 3. The classification of a financial instrument within Level 3 is based upon the significance of the unobservable inputs to the overall fair value measurement. Level 3 Recurring Fair Value Measurements For the Three Months Ended September 30, 2015 Common Stock Real Estate Company Investments 2014 Call Options Series A Warrants Series B Warrants Put Option Liability Third-Party Call Options Liability Contingent Call Options Liability Total Fair value, net, July 1, 2015 $ 10,649,197 $ — $ 1,138,860 $ — $ 2,366,784 $ — $ (621,977 ) $ (225,599 ) $ 13,307,265 Realized / unrealized gains (losses) included in earnings (1,506,909 ) — (164,835 ) — (654,675 ) — 234,030 225,599 (1,866,790 ) Purchases 1 500,000 277,500 — — — — — — 777,500 Sales (744,371 ) — — — — — — — (744,371 ) Settlements / exercises — — — — — — — — — Transfers in and /or out of Level 3 — — — — — — — — — Fair value , net, September 30, 2015 $ 8,897,917 $ 277,500 $ 974,025 — $ 1,712,109 $ — $ (387,947 ) $ — $ 11,473,604 Unrealized gains (losses) still held $ 7,892,735 $ — $ 973,575 $ — $ 1,712,109 $ — $ (387,947 ) $ — $ 10,190,472 1 Level 3 Recurring Fair Value Measurements For the Nine Months Ended September 30, 2015 Common Stock Real Estate Company Investments 2014 Call Options Series A Warrants Series B Warrants Put Option Liability Third-Party Call Options Liability Contingent Call Options Liability Total Fair value, net, January 1, 2015 $ 8,018,621 $ — $ 6,644,680 $ 9,947,368 $ 4,227,632 $ (9,973,684 ) $ — — $ 18,864,617 Realized / unrealized gains (losses) included in earnings (2,128,941 ) — (164,835 ) (9,823,026 ) (2,515,523 ) 9,849,013 234,030 — (4,549,282 ) Purchases 1 6,505,820 277,500 — — — — — — 6,783,320 Sales (3,497,583 ) — — — — (621,977 ) — (4,119,560 ) Settlements / exercises — — (5,505,820 ) (124,342 ) — 124,671 — — (5,505,491 ) Transfers in and /or out of Level 3 — — — — — — — — — Fair value , net, September 30, 2015 $ 8,897,917 $ 277,500 $ 974,025 — $ 1,712,109 $ — $ (387,947 ) — $ 11,473,604 Unrealized gains (losses) still held $ 7,892,735 $ — $ 973,575 $ — $ 1,712,109 $ — $ (387,947 ) — $ 10,190,472 1

MARKET, CREDIT AND LIQUIDITY RI

MARKET, CREDIT AND LIQUIDITY RISK	9 Months Ended
	Sep. 30, 2015
Risks and Uncertainties [Abstract]
MARKET, CREDIT AND LIQUIDITY RISK	NOTE 5 – MARKET, CREDIT AND LIQUIDITY RISK Market risk is the potential loss the Company may incur as a result of changes in the market or fair value of a particular financial instrument. Risks arise in options and warrant contracts from changes in the market or fair value of their underlying financial instruments. Credit risk is the potential loss the Company may incur as a result of the failure of a counterparty or an issuer to make payments according to the terms of a contract. Credit risk can arise from investment activities in financially distressed issuers. To manage this risk, the Company may seek to diversify its investment portfolio with respect to specific credits, sectors and asset classes. The Company is also subject to market concentration risk since a significant portion of its investment portfolio has similar characteristics, and is therefore affected similarly by changes in economic conditions. Investments of the Company trade in relatively thin markets and throughout the year, depending upon market conditions, may be considered illiquid. As a result, the market values can be more volatile and difficult to determine relative to other securities. In addition, if the Company is required to liquidate all or a portion of its portfolio quickly, it may realize significantly less than the value at which it previously recorded its financial instruments.

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 6 – INCOME TAXES The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Income tax benefit for the nine months ended September 30, 2015 was $2,519,324 at an effective tax rate of 39.77%, which was greater than the federal statutory rate due to the state income tax expense. The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The disclosures regarding the Company's unrecognized tax benefits at December 31, 2014 included in the Company's 2014 Annual Report on Form 10-K continue to be relevant for the periods ended September 30, 2015 as to the Company’s unrecognized tax benefits at September 30, 2015.

TREASURY STOCK PURCHASES

TREASURY STOCK PURCHASES	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
TREASURY STOCK PURCHASES	NOTE 7 – TREASURY STOCK PURCHASES The Company is authorized to repurchase shares of the Company’s common stock in private transactions from time to time. During 2015, the Company repurchased 200,500 shares at an aggregate cost of approximately $220,000, which included approximately $218,000 in satisfaction of an outstanding note receivable.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
SUBSEQUENT EVENTS	NOTE 8 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date the financial statements were available to be issued. Except as noted below, there are no events which require adjustments to, or disclosure in, the financial statements for the periods ended September 30, 2015. In October 2015, the Company sold 303,947 Twinlab shares to unrelated third parties for $231,000.

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements Tables
Schedule of Investments in securities and unrealized gains	Financial instruments, net are comprised of the following at September 30, 2015. Cost Estimated ASSETS Common Stock $ 1,005,182 $ 8,897,916 Real Estate Company Investments 277,500 277,500 2014 Call Options 450 974,025 Series B Warrants — 1,712,109 1,283,132 11,861,551 LIABILITIES Third-Party Call Options $ — $ (387,947 ) $ — $ (387,947 ) Financial instruments, net are comprised of the following at December 31, 2014. Cost Estimated ASSETS Common Stocks $ 6,212 $ 8,018,621 2014 Call Options 2,492 6,644,680 Series A Warrants — 9,947,368 Series B Warrants — 4,227,632 $ 8,704 $ 28,838,301 LIABILITIES Warrant Put Option $ — $ (9,973,684 )
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. The following fair value hierarchy table presents information about the Company's financial instruments measured at fair value. Assets and Liabilities Measured at Fair Value on a Recurring Basis September 30, 2015 Level 1 Level 2 Level 3 Total Assets Financial instruments, at fair value: Common Stocks $ — $ — $ 8,897,917 $ 8,897,917 Real Estate Company Investments — — 277,500 277,500 2014 Call Options — — 974,025 974,025 Series B Warrants — — 1,712,109 1,712,109 Total financial instruments, at fair value — — 11,861,551 11,861,551 Total assets held at fair value $ — $ — $ 11,861,551 $ 11,861,551 Liabilities Financial instruments, at fair value: Third-Party Call Options $ — $ — $ 387,947 $ 387,947 Total liabilities held at fair value $ — $ — $ 387,947 $ 387,947 Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2014 Level 1 Level 2 Level 3 Total Assets Financial instruments, at fair value: Common Stocks $ — $ — $ 8,018,621 $ 8,018,621 2014 Call Options — — 6,644,680 6,644,680 Series A Warrants — — 9,947,368 9,947,368 Series B Warrants — — 4,227,632 4,227,632 Total Financial instruments, at fair value — — 28,838,301 28,838,301 Total assets held at fair value $ — $ — $ 28,838,301 $ 28,838,301 Liabilities Financial instruments, at fair value: Warrant Put Option — — 9,973,684 9,973,684 Total liabilities held at fair value $ — $ — $ 9,973,684 $ 9,973,684 Level 3 Recurring Fair Value Measurements For the Three Months Ended September 30, 2015 Common Stock Real Estate Company Investments 2014 Call Options Series A Warrants Series B Warrants Put Option Liability Third-Party Call Options Liability Contingent Call Options Liability Total Fair value, net, July 1, 2015 $ 10,649,197 $ — $ 1,138,860 $ — $ 2,366,784 $ — $ (621,977 ) $ (225,599 ) $ 13,307,265 Realized / unrealized gains (losses) included in earnings (1,506,909 ) — (164,835 ) — (654,675 ) — 234,030 225,599 (1,866,790 ) Purchases 1 500,000 277,500 — — — — — — 777,500 Sales (744,371 ) — — — — — — — (744,371 ) Settlements / exercises — — — — — — — — — Transfers in and /or out of Level 3 — — — — — — — — — Fair value , net, September 30, 2015 $ 8,897,917 $ 277,500 $ 974,025 — $ 1,712,109 $ — $ (387,947 ) $ — $ 11,473,604 Unrealized gains (losses) still held $ 7,892,735 $ — $ 973,575 $ — $ 1,712,109 $ — $ (387,947 ) $ — $ 10,190,472 1 Level 3 Recurring Fair Value Measurements For the Nine Months Ended September 30, 2015 Common Stock Real Estate Company Investments 2014 Call Options Series A Warrants Series B Warrants Put Option Liability Third-Party Call Options Liability Contingent Call Options Liability Total Fair value, net, January 1, 2015 $ 8,018,621 $ — $ 6,644,680 $ 9,947,368 $ 4,227,632 $ (9,973,684 ) $ — — $ 18,864,617 Realized / unrealized gains (losses) included in earnings (2,128,941 ) — (164,835 ) (9,823,026 ) (2,515,523 ) 9,849,013 234,030 — (4,549,282 ) Purchases 1 6,505,820 277,500 — — — — — — 6,783,320 Sales (3,497,583 ) — — — — (621,977 ) — (4,119,560 ) Settlements / exercises — — (5,505,820 ) (124,342 ) — 124,671 — — (5,505,491 ) Transfers in and /or out of Level 3 — — — — — — — — — Fair value , net, September 30, 2015 $ 8,897,917 $ 277,500 $ 974,025 — $ 1,712,109 $ — $ (387,947 ) — $ 11,473,604 Unrealized gains (losses) still held $ 7,892,735 $ — $ 973,575 $ — $ 1,712,109 $ — $ (387,947 ) — $ 10,190,472 1

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Fair Value, Measurements, Recurring [Member] - Fair Value, Inputs, Level 3 [Member]	9 Months Ended
	Sep. 30, 2015USD ($)
Assets [Member]
Fair value of Assets and Liabilities
Assets [Member] | 2014 Call Option [Member]
Fair value of Assets and Liabilities	$ 974,025
Assets [Member] | Warrant B [Member]
Fair value of Assets and Liabilities	1,712,109
Assets [Member] | Common Stock
Fair value of Assets and Liabilities	8,897,916
Assets [Member] | Real Estate Company Investments [Member]
Fair value of Assets and Liabilities	$ 277,500
Assets [Member] | Maximum [Member] | 2014 Call Option [Member]
Duration	1 year 2 months 12 days
Risk rate	0.80%
Volatility	45.00%
Assets [Member] | Maximum [Member] | Warrant B [Member]
Duration	1 year 2 months 12 days
Risk rate	0.80%
Volatility	45.00%
Assets [Member] | Minimum [Member] | 2014 Call Option [Member]
Duration	2 months 12 days
Risk rate	0.19%
Volatility	43.00%
Assets [Member] | Minimum [Member] | Warrant B [Member]
Duration	2 months 12 days
Risk rate	0.19%
Volatility	43.00%
Liabilities [Member]
Fair value of Assets and Liabilities	$ (387,947)
Liabilities [Member] | Third-Party Call Options [Member]
Fair value of Assets and Liabilities	$ (387,947)
Volatility	43.00%
Liabilities [Member] | Maximum [Member] | Third-Party Call Options [Member]
Duration	2 years 8 months 12 days
Risk rate	0.98%
Liabilities [Member] | Minimum [Member] | Third-Party Call Options [Member]
Duration	2 years 6 months
Risk rate	0.91%

FAIR VALUE MEASUREMENTS (Deta17

FAIR VALUE MEASUREMENTS (Details 2) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Unrealized gain on investment securities, net	$ (2,213,158)	$ 19,190,577	$ (4,069,194)	$ 19,187,658
Assets [Member] | Cost [Member]
Unrealized gain on investment securities, net			1,283,132		$ 8,707
Assets [Member] | Cost [Member] | Real Estate Company Investments [Member]
Unrealized gain on investment securities, net			277,500
Assets [Member] | Cost [Member] | Common Stock
Unrealized gain on investment securities, net			1,005,182		6,212
Assets [Member] | Cost [Member] | 2014 Call Option [Member]
Unrealized gain on investment securities, net			$ 450		$ 2,492
Assets [Member] | Cost [Member] | Warrant B [Member]
Unrealized gain on investment securities, net
Assets [Member] | Cost [Member] | Warrant A [Member]
Unrealized gain on investment securities, net
Assets [Member] | Estimate of Fair Value [Member]
Unrealized gain on investment securities, net			$ 11,861,551		$ 28,838,301
Assets [Member] | Estimate of Fair Value [Member] | Real Estate Company Investments [Member]
Unrealized gain on investment securities, net			277,500
Assets [Member] | Estimate of Fair Value [Member] | Common Stock
Unrealized gain on investment securities, net			8,897,917		8,018,621
Assets [Member] | Estimate of Fair Value [Member] | 2014 Call Option [Member]
Unrealized gain on investment securities, net			974,025		6,644,680
Assets [Member] | Estimate of Fair Value [Member] | Warrant B [Member]
Unrealized gain on investment securities, net			$ 1,712,109		4,227,632
Assets [Member] | Estimate of Fair Value [Member] | Warrant A [Member]
Unrealized gain on investment securities, net					$ 9,947,368
Liabilities [Member] | Cost [Member]
Unrealized gain on investment securities, net
Liabilities [Member] | Cost [Member] | Third-Party Call Options [Member]
Unrealized gain on investment securities, net
Liabilities [Member] | Cost [Member] | Warrant Put Option [Member]
Unrealized gain on investment securities, net
Liabilities [Member] | Estimate of Fair Value [Member]
Unrealized gain on investment securities, net			$ (387,947)
Liabilities [Member] | Estimate of Fair Value [Member] | Third-Party Call Options [Member]
Unrealized gain on investment securities, net			$ (387,947)
Liabilities [Member] | Estimate of Fair Value [Member] | Warrant Put Option [Member]
Unrealized gain on investment securities, net					$ (9,973,684)

FAIR VALUE MEASUREMENTS (Deta18

FAIR VALUE MEASUREMENTS (Details 3) - Fair Value, Measurements, Recurring [Member] - USD ($)	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Inputs, Level 3 [Member]
Financial Investment owned at fair value	$ 11,473,604	$ 13,307,265	$ 18,864,617
Fair Value, Inputs, Level 3 [Member] | Warrant Put Option [Member]
Financial Investment owned at fair value			(9,973,684)
Fair Value, Inputs, Level 3 [Member] | Common Stock
Financial Investment owned at fair value	$ 8,897,917	$ 10,649,197	8,018,621
Fair Value, Inputs, Level 3 [Member] | 2014 Call Option [Member]
Financial Investment owned at fair value	974,025	$ 1,138,860	$ 6,644,680
Fair Value, Inputs, Level 3 [Member] | Real Estate Company Investments [Member]
Financial Investment owned at fair value	277,500
Fair Value, Inputs, Level 3 [Member] | Third-Party Call Options [Member]
Financial Investment owned at fair value	(387,947)	$ (621,977)
Fair Value, Inputs, Level 3 [Member] | Warrant B [Member]
Financial Investment owned at fair value	$ 1,712,109	2,366,784	$ 4,227,632
Fair Value, Inputs, Level 3 [Member] | Contingent Call Options [Member]
Financial Investment owned at fair value		$ (225,599)
Fair Value, Inputs, Level 3 [Member] | Warrant A [Member]
Financial Investment owned at fair value			$ 9,947,368
Assets [Member]
Total Assets/Liabilities Held at Fair Value	$ 11,861,551		28,838,301
Assets [Member] | Common Stock
Financial Investment owned at fair value	8,897,917		8,018,621
Assets [Member] | 2014 Call Option [Member]
Financial Investment owned at fair value	974,025		6,644,680
Assets [Member] | Real Estate Company Investments [Member]
Financial Investment owned at fair value	277,500
Assets [Member] | Warrant B [Member]
Financial Investment owned at fair value	1,712,109		4,227,632
Assets [Member] | Warrant A [Member]
Financial Investment owned at fair value			9,947,368
Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Total Assets/Liabilities Held at Fair Value	11,861,551		28,838,301
Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Common Stock
Financial Investment owned at fair value	8,897,917		8,018,621
Assets [Member] | Fair Value, Inputs, Level 3 [Member] | 2014 Call Option [Member]
Financial Investment owned at fair value	974,025		6,644,680
Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Real Estate Company Investments [Member]
Financial Investment owned at fair value	277,500
Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Warrant B [Member]
Financial Investment owned at fair value	1,712,109		4,227,632
Assets [Member] | Fair Value, Inputs, Level 3 [Member] | Warrant A [Member]
Financial Investment owned at fair value			9,947,368
Liabilities [Member]
Total Assets/Liabilities Held at Fair Value	387,947		9,973,684
Liabilities [Member] | Warrant Put Option [Member]
Financial Investment owned at fair value			9,973,684
Liabilities [Member] | Contingent Call Options [Member]
Financial Investment owned at fair value	387,947
Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Total Assets/Liabilities Held at Fair Value	387,947		9,973,684
Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Warrant Put Option [Member]
Financial Investment owned at fair value			$ 9,973,684
Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Contingent Call Options [Member]
Financial Investment owned at fair value	$ 387,947

FAIR VALUE MEASUREMENTS (Deta19

FAIR VALUE MEASUREMENTS (Details 4) - Fair Value, Measurements, Recurring [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015
Fair value, net	$ 13,307,265	$ 18,864,617
Realized / unrealized gains (losses) included in earnings	(1,866,790)	(4,549,282)
Purchases	777,500	6,783,320
Sales	$ (744,371)	(4,119,560)
Settlements / exercises		$ (5,505,491)
Transfers in and /or out of Level 3
Fair value , net	$ 11,473,604	$ 11,473,604
Unrealized gains (losses) still held	10,190,472	10,190,472
Common Stock
Fair value, net	10,649,197	8,018,621
Realized / unrealized gains (losses) included in earnings	(1,506,909)	(2,128,941)
Purchases	500,000	6,505,820
Sales	$ (744,371)	$ (3,497,583)
Settlements / exercises
Transfers in and /or out of Level 3
Fair value , net	$ 8,897,917	$ 8,897,917
Unrealized gains (losses) still held	$ 7,892,735	$ 7,892,735
Real Estate Company Investments [Member]
Fair value, net
Realized / unrealized gains (losses) included in earnings
Purchases	$ 277,500	$ 277,500
Sales
Settlements / exercises
Transfers in and /or out of Level 3
Fair value , net	$ 277,500	$ 277,500
Unrealized gains (losses) still held
2014 Call Option [Member]
Fair value, net	$ 1,138,860	$ 6,644,680
Realized / unrealized gains (losses) included in earnings	$ (164,835)	$ (164,835)
Purchases
Sales
Settlements / exercises		$ (5,505,820)
Transfers in and /or out of Level 3
Fair value , net	$ 974,025	$ 974,025
Unrealized gains (losses) still held	$ 973,575	973,575
Warrant A [Member]
Fair value, net		9,947,368
Realized / unrealized gains (losses) included in earnings		$ (9,823,026)
Purchases
Sales
Settlements / exercises		$ (124,342)
Transfers in and /or out of Level 3
Fair value , net
Unrealized gains (losses) still held
Warrant B [Member]
Fair value, net	$ 2,366,784	$ 4,227,632
Realized / unrealized gains (losses) included in earnings	$ (654,675)	$ (2,515,523)
Purchases
Sales
Settlements / exercises
Transfers in and /or out of Level 3
Fair value , net	$ 1,712,109	$ 1,712,109
Unrealized gains (losses) still held	$ 1,712,109	1,712,109
Warrant Put Option [Member]
Fair value, net		(9,973,684)
Realized / unrealized gains (losses) included in earnings		$ 9,849,013
Purchases
Sales
Settlements / exercises		$ 124,671
Transfers in and /or out of Level 3
Fair value , net
Unrealized gains (losses) still held
Third-Party Call Options [Member]
Fair value, net	$ (621,977)
Realized / unrealized gains (losses) included in earnings	$ 234,030	$ 234,030
Purchases
Sales		$ (621,977)
Settlements / exercises
Transfers in and /or out of Level 3
Fair value , net	$ (387,947)	$ (387,947)
Unrealized gains (losses) still held	(387,947)	$ (387,947)
Contingent Call Options [Member]
Fair value, net	(225,599)
Realized / unrealized gains (losses) included in earnings	$ 225,599
Purchases
Sales
Settlements / exercises
Transfers in and /or out of Level 3
Fair value , net
Unrealized gains (losses) still held

TREASURY STOCK PURCHASES (Detai

TREASURY STOCK PURCHASES (Details Narrative)	9 Months Ended
	Sep. 30, 2015USD ($)shares
Treasury Stock Purchases Details Narrative
Treasury Stock Purchased	200,500
Treasury Stock Purchased value | $	$ 220,000