6.	Acquisition-Related Contingent Consideration

In connection with the acquisition of Solar Implant Technologies, Inc. (“SIT”), Intevac agreed to pay to the selling shareholders in cash a revenue earnout on Intevac’s net revenue from commercial sales of certain products over a specified period up to an aggregate of $9.0 million. Intevac estimated the fair value of this contingent consideration on September 30, 2017 based on probability-based forecasted revenues reflecting Intevac’s own assumptions concerning future revenue from such products.

The fair value measurement of contingent consideration is based on significant inputs not observed in the market and thus represents a Level 3 measurement. Any change in fair value of the contingent consideration subsequent to the acquisition date is recognized in income (loss) from operations within the condensed consolidated statement of operations. The following table represents a reconciliation of the change in the fair value measurement of the contingent consideration liability for the three and nine month periods ended September 30, 2017 and October 1, 2016:


	Three Months Ended					Nine Months Ended
	September 30, 2017			October 1, 2016		September 30, 2017			October 1, 2016
	(In thousands)
Opening balance	$	859		$	748	$	759		$	890
Changes in fair value		(283	)		52		(181	)		(90	)
Cash payments made		(172	)		—		(174	)		—

Closing balance	$	404		$	800	$	404		$	800

The following table displays the balance sheet classification of the contingent consideration liability account at September 30, 2017 and at December 31, 2016:


	September 30,		December 31,
	2017		2016
	(In thousands)
Other accrued liabilities	$	36	$	329
Other long-term liabilities		368		430

Total acquisition-related contingent consideration	$	404	$	759

The following table represents the quantitative range of the significant unobservable inputs used in the calculation of fair value of the continent consideration liability as of September 30, 2017. Significant increases or decreases in any of these inputs in isolation would result in a significantly lower or higher fair value measurement.


	Quantitative Information about Level 3 Fair Value Measurements at September 30, 2017
	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(In thousands, except for percentages)
Revenue Earnout	$	404	Discounted cash flow	Weighted average cost of capital Probability weighting of achieving revenue forecasts	11.9% 10.0% - 80.0% (30.0%)