Quarterly report pursuant to Section 13 or 15(d)

17. Fair Value Disclosures

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17. Fair Value Disclosures
9 Months Ended
Sep. 30, 2016
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 fair value of the liability measured at fair value on a recurring basis:

 

 

    Level 1     Level 2     Level 3     Total  
As of September 30, 2016                        
Current liabilities:                        
Contingent liability (see note 11)   $ -     $ -     $ 100,000       100,000  
Non-current liabilities:                                
Contingent liability (see note 11)             -       861,606       861,606  
Derivative liability (see note 12)     -       -       233,934       233,934  
   Total non-current liabilities   $ 0     $ -     $ 1,095,540     $ 1,095,540  
As of December 31, 2015                                
Non-current liabilities:                                
Derivative liability (see note 12)   $ -     $ -     $ 953,005     $ 953,005  

 

Changes in the derivative warrant liability for the nine months ended September 30, 2016 are as follows:

 

Balance at December 31, 2015   $ 953,005  
Gain for the period:        
  Included in net loss     (1,152,121 )
  Adjustment for prior issuances and conversion of warrants (see note 12)     433,050  
Balance at September 30, 2016   $ 233,934