Quarterly report pursuant to Section 13 or 15(d)

17. Fair Value Disclosures

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17. Fair Value Disclosures
3 Months Ended
Mar. 31, 2017
Fair Value Disclosures [Abstract]  
17. Fair Value Disclosures

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

 

Level 1—Quoted prices in active markets for identical assets or liabilities

Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3—No observable pricing inputs in the market

 

The following table represents the liabilities measured at fair value on a recurring basis:

 

    Level 1     Level 2     Level 3     Total  
As of March 31, 2017                        
Current liabilities:                        
Contingent purchase price liability     -       -     $ 912,212     $ 912,212  
Non-current liabilities:                                
Contingent purchase price liability     -       -     $ 1,315,811     $ 1,315,811  
Derivative liability (see note 12)     -       -     $ 376,321     $ 376,321  
As of December 31, 2016                                
Current liabilities:                                
Contingent purchase price liability     -       -     $ 546,488     $ 546,488  
Non-current liabilities:                                
Contingent purchase price liability     -       -     $ 890,811     $ 890,811  
Derivative liability (see note 12)     -       -     $ 348,650     $ 348,650  

 

Changes in the derivative warrant liability for the three months ended March 31, 2017 are as follows:

 

Balance at December 31, 2016   $ 348,650  
Change for the period:        
Change in fair value included in net loss     40,445  
Warrant exchange (see note 12)     (12,774 )
Balance at March 31, 2017   $ 376,321  

 

Changes in the contingent purchase price liability for the three months ended March 31, 2017 are as follows:

 

Balance at December 31, 2016   $ 1,437,299  
Change for the period:        
Acquired customer base     1,350,000  
Increase in amounts due from Technology Opportunity Group     (367,608 )
Payments made     (191,668 )
Balance at March 31, 2017   $ 2,228,023