Fair Value Measurements

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on

three

levels of inputs, of which the

first

two

are considered observable and the last unobservable, that

may

be used to measure fair value which are the following:

•

Level

1—Quoted

prices in active markets for identical assets or liabilities;

•

Level

2—Inputs

other than Level

that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are

not

active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

•

Level

3—Unobservable

inputs that are supported by little or

market activity and that are significant to the fair value of the assets or liabilities.

The following table represents the fair value hierarchy for the Company’s financial assets (cash equivalents) measured at fair value on a recurring basis as of

December 31, 2019

and

2018:

	Level 1		Level 2		Level 3
December 31, 2019
Money market funds	$	940,773	$	-	$	-
Total	$	940,773	$	-	$	-

December 31, 2018
Money market funds	$	1,706,376	$	-	$	-
Total	$	1,706,376	$	-	$	-

Money market funds are highly liquid investments. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level

of the fair value hierarchy.

The carrying amount of financial instruments such as accounts receivable, accounts payable, and accrued liabilities approximate the related fair value due to the short-term maturities of these instruments.