Fair Value Measurements

9 Months Ended

Sep. 30, 2015

6.	Fair Value Measurements

The following table sets forth the fair value of the Company’s financial liabilities measured at fair value on a recurring basis as of December 31, 2014:

	Fair Value Measurements as of December 31, 2014
	Level 1		Level 2		Level 3		Total
Liabilities:
Warrant liability	$	-	$	-	$	266,524	$	266,524

The Company had no financial assets measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014. The Company had no financial liabilities measured at fair value on a recurring basis as of September 30, 2015.

The change in the fair value of the warrant liability that falls under Level 3 of the valuation hierarchy is summarized below:

Fair value as of January 1, 2015	$	266,524
Issuance of warrants		1,677,148
Reclassification to additional paid-in capital		(1,943,672	)
Fair value as of September 30, 2015	$	-

The following table describes the valuation techniques used to calculate fair value for Level 3 liabilities. For Level 3 liabilities, the Company determines the fair value measurement valuation policies and procedures.

	Fair Value as
	of				Range
	December 31,		Valuation	Unobservable	(Weighted-
	2014		Techniques	Inputs	Average)
Warrant liability	$	266,524	Black-Scholes	Fair value of	$	1.10
			Option Pricing	Preferred Stock	$	(1.10	)
			Model

				Volatility		37.7	%
						(37.7	%)

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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