Fair value measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair value measurements

Note 4 - Fair value measurements

The Company classifies its financial instruments using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

⋅ Level 1 - defined as observable inputs such as quoted prices in active markets;

⋅ Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

⋅ Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions such as expected revenue growth and discount factors applied to cash flow projections.

Financial assets and liabilities measured at fair value on a recurring basis

The Company evaluates financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level at which to classify them each reporting period. This determination requires the Company to make subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the hierarchy. The following tables present the fair value hierarchy for the Company’s financial assets and liabilities measured at fair value on a recurring basis at June 30, 2015 and December 31, 2014:

	Fair value at
	June 30, 2015		Level 1		Level 2		Level 3
Cash and cash equivalents	$	10,215,809	$	10,215,809	$	-	$	-

	Fair value at
	December 31, 2014		Level 1		Level 2		Level 3
Cash and cash equivalents	$	749,517	$	748,048	$	1,469	$	-

The Company’s Level 1 securities primarily consist of cash and cash equivalents, including money market funds and U.S Treasury Notes; the Company determines the estimated fair value for its Level 1 securities using quoted (unadjusted) prices for identical assets or liabilities in active markets.

Prior to its IPO, certain stock purchase warrants contained cash settlement features and, accordingly, the Company considered them to be derivative financial instruments and accounted for them at fair value using level 3 inputs. As a result of the Company’s IPO and elimination of the cash settlement features pursuant to their terms, those stock purchase warrants were reclassified to equity. For periods prior to the IPO, the Company determined the fair value of these derivative liabilities using a hybrid valuation method that consisted of a probability weighted expected return method that values the Company’s equity securities assuming various possible future economic outcomes while using an option pricing method (that treated all equity linked instruments as call options on the Company’s equity value with exercise prices based on the liquidation preference of the Series A Preferred Stock ) to estimate the allocation of value within one or more of the scenarios. Using this hybrid method, unobservable inputs included the Company’s equity value, the exercise price for each option value, expected timing of possible economic outcomes such as initial public offering, risk free interest rates and stock price volatility. The following tables set forth a summary of changes in the fair value of Level 3 liabilities measured at fair value on a recurring basis for the six months ended June 30, 2015:

Description	Balance at December 31,  2014		Established in 2015		Change in Fair Value		Reclassifed to Equity		Balance at June 30, 2015
Derivative warrant liability	$	-	$	72,333	$	647,342	$	(719,675)	$	-

Financial assets and liabilities carried at fair value on a non-recurring basis

The Company does not have any financial assets and liabilities measured at fair value on a non-recurring basis.

Non-financial assets and liabilities carried at fair value on a recurring basis

The Company does not have any non-financial assets and liabilities measured at fair value on a recurring basis.

Non-financial assets and liabilities carried at fair value on a non-recurring basis

The Company measures its long-lived assets, including property and equipment and intangible assets, at fair value on a non-recurring basis when they are deemed to be impaired. No such fair value impairment was recognized in the periods ended June 30, 2015 and 2014.