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Fair value of financial instruments
 3 Months Ended
Mar. 31, 2016
Fair Value Disclosures [Abstract]  
Fair value of financial instruments

5. Fair value of financial instruments

ASC Topic 820, “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

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.

The fair value of the Company’s cash and cash equivalents, receivables and payables, including the current portion of long-term debt approximate their carrying amount because of the short-term nature of these instruments. The long-term debt outstanding as of March 31, 2016 represented the Term Loan and Promissory Notes, as defined below, pursuant to agreements effective on December 8, 2015. As analyzed in Note 8, we regard the fair value of the long-term debt to approximate their carrying amounts as of March 31, 2016.