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When a share-based compensation award is exercised and the resulting common shares are issued, the fair
value of such award as determined on the date of grant or date of vesting (in the case of a non-employee exercise) is
transferred to common shares. In the case of a share-based compensation award that is either cancelled or forfeited
prior to vesting, the amortized expense associated with the unvested awards is reversed.
Income taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax
assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax
asset will not be recognized.
Loss per share
The loss per share is computed using the weighted average number of shares outstanding during the period.
To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method.
Diluted loss per share is not presented, as the effect on the basic loss per share would be anti-dilutive. At December
31, 2015 and 2014, we had 8,928,181 and 5,818,057 in potentially dilutive securities, respectively.
Fair value of financial instruments
Our financial instruments may at times consist of cash and cash equivalents, short-term investments,
marketable securities, accounts receivable, restricted cash, derivative liabilities, accounts payable and accrued
liabilities. U.S. GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a
liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a
fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from
highest to lowest priority):
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for
identical, unrestricted assets or liabilities.
Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly or indirectly, including quoted prices for similar assets and
liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that
are not active; or other inputs that are observable or can be corroborated by observable market data by
correlation or other means.
Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value
measurement and unobservable.
The Company continually monitors its cash positions with, and the credit quality of, the financial
institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess
of U.S. federally insured limits.