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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

7.	FAIR VALUE MEASUREMENTS

Cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to their relative short-term nature. The Company’s financial liabilities reflected at fair value in the condensed consolidated financial statements include contingent consideration, warrant liability and note payable. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

Level 1:

Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

	Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

	Level 3:	Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation methodologies used for the Company’s financial instruments measured on a recurring basis at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth in the tables below:

		As of September 30, 2022								Fair Value Measurements
		Carrying				Fair				As of September 30, 2022
		Amount				Value				Level 1				Level 2				Level 3
										(unaudited)
Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾		$	1,141			$	1,141			$	-			$	-			$	1,141
Other accrued expenses:
Warrant liability ⁽²⁾			-				-				-				-				-
Note payable:
BroadOak loan			9,988				9,988				-				-				9,988
		$	11,129			$	11,129			$	-			$	-			$	11,129

(1)(2)	See Note 10, Accrued Expenses and Long-Term Liabilities
(1)	See Note 10, Accrued Expenses and Long-Term Liabilities
(2)	See Note 10, Accrued Expenses and Long-Term Liabilities

		As of December 31, 2021								Fair Value Measurements
		Carrying				Fair				As of December 31, 2021
		Amount				Value				Level 1				Level 2				Level 3
Liabilities:
Contingent consideration:
Asuragen ⁽¹⁾		$	1,871			$	1,871			$	-			$	-			$	1,871
Other accrued expenses:
Warrant liability ⁽²⁾			71				71				-				-				71
Note payable:
BroadOak loan			7,942				7,942				-				-				7,942
		$	9,884			$	9,884			$	-			$	-			$	9,884

(1)(2)	See Note 10, Accrued Expenses and Long-Term Liabilities
(1)
(2)

In connection with the acquisition of certain assets from Asuragen, Inc., the Company recorded contingent consideration related to contingent payments and other revenue-based payments. The Company determined the fair value of the contingent consideration based on a probability-weighted income approach derived from revenue estimates. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement.

In connection with the BroadOak loan, the Company records the loan at fair value. The fair value of the loan is determined by a probability-weighted approach regarding the loan’s change in control feature. See Note 14, Notes Payable, for more details. The fair value measurement is based on the estimated probability of a change in control and thus represents a Level 3 measurement.

A roll forward of the carrying value of the Contingent Consideration Liability, 2017 Underwriters’ Warrants and BroadOak loans to September 30, 2022 is as follows:

		December 31, 2021				Issued				Reclassified				Earned				Accretion/Interest Accrued				Adjustment to Fair Value/ Mark to Market				September 30, 2022
		(unaudited)
Asuragen		$	1,871			$	-			$	-			$	(542	)		$	123			$	(311	)		$	1,141

Underwriters Warrants			71				-				-				-				-				(71	)			-

BroadOak loans			7,942				-				2,000				-				-				46				9,988

BroadOak Convertible Note			-				2,000				(2,000	)			-				-				-				-
		$	9,884			$	2,000			$	-			$	(542	)		$	123			$	(336	)		$	11,129

Certain of the Company’s non-financial assets, such as other intangible assets, are measured at fair value on a nonrecurring basis when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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