Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  



Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:


Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
 Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes those derivative instruments that the Company values using observable market data. Substantially all of these inputs are observable in the marketplace throughout the term of the derivative instrument, can be derived from observable data, or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category include non-exchange traded derivative financial instruments as well as warrants to purchase common stock and long-term incentive plan liabilities calculated using the Black-Scholes model to estimate the fair value as of the measurement date.
Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity).


As required by ASC 820-10, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.


Fair Value on a Recurring Basis


The following table sets forth by level within the fair value hierarchy the Company’s derivative financial instruments that were accounted for at fair value on a recurring basis as of September 30, 2020 and December 31, 2020, respectively:



Quoted Prices in

Active Markets for

Identical Assets
(Level 1) 


Significant Other

Observable Inputs
(Level 2)


Significant Other


(Level 3)

    Total Fair
Value as of
Derivative Financial Instrument at September 30, 2020   $       $ (1,070,551)     $       $ (1,070,551)  
Derivative Financial Instrument at December 31, 2020   $     $ (972,552)     $     $ (972,552)  



The change in derivative financial instruments for the three months ended December 31, 2020 is as follows:


September 30, 2020 balance   $ (1,070,551)  
New derivative instruments issued      
Derivative instruments extinguished     46,261  
Change in fair value     51,738  
December 31, 2020 balance   $ (972,552)  


Non-recurring fair value assessments include stock-based compensation. The Company recorded stock-based compensation of nil and $367,841 for the three months ended December 31, 2020 and 2019, respectively.