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Derivative Liabilities
9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Liabilities

Note 4. Derivative Liabilities.

 

The Company accounts for options to purchase convertible notes and warrants (refer to Note 3.) as derivative liabilities that are measured at their far value at each cut-off date, in accordance with ASC 815 (“Derivatives and Hedging”).

 

The Company uses directly observable inputs as well as significant unobservable inputs in the valuation of these derivative liabilities (level 3 measurements). The inputs used in the valuation are risk free interest rate, expected volatility, expect option term, expected dividend yield and Company specific discount rate.

 

The fair value of the derivative liabilities at September 30, 2017, as well prior to and following the effective date of the aforementioned settlement, was immaterial. The fair value of the derivative liabilities as of December 31, 2016 was $336,272. Finance expense from revaluation of the derivative liabilities included in the Company's statement of operations was $336,272 for the year ended December 31 2016 and finance income was $336,272 for the nine month period ended September 30 2017.