Note 12 - Investments and Fair Value Measurements

3 Months Ended

Mar. 31, 2018

12.

INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company’s fair value hierarchy for its cash equivalents, marketable securities and derivative instruments, including contingent consideration, as of

March

31,

2018

and

December

31,

2017,

respectively, was as follows:

(in thousands)
March 31, 2018	Level 1		Level 2		Level 3		Total
Money market securities	$	16	$	—	$	—	$	16
Certificates of Deposit		523		—		—		523
Total assets	$	539	$	—	$	—	$	539
Derivative instrument payable	$	—	$	272	$	—	$	272
Contingent consideration		—		—		—		—
Total liabilities	$	—	$	272	$	—	$	272

December 31, 2017	Level 1		Level 2		Level 3		Total
Money market securities	$	16	$	—	$	—	$	16
Total assets	$	16	$	—	$	—	$	16
Derivative instrument payable	$	—	$	356	$	—	$	356
Contingent consideration		—		—		45		45
Total liabilities	$	—	$	356	$	45	$	401

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
(in thousands)	Contingent consideration
Balance at December 31, 2017	$	45
Payments		(45	)
Fair value adjustments		—
Balance at March 31, 2018	$	—

There were

transfers between Level

and Level

2018

as determined at the end of the reporting period. The contingent consideration liability is associated with the acquisition of Tectrol in

March 2015

and represents the present value of the expected future contingent payment based on revenue projections of select Tectrol legacy products. The inputs used to measure contingent consideration are classified as Level

within the valuation hierarchy. The valuation is

not

supported by market criteria and reflects the Company’s internal revenue forecasts. Since the valuation is

not

supported by market criteria, the valuation is completely dependent on unobservable inputs. During quarterly updates of the valuation, the calculation of the value is based on actual and reasonably estimated future revenues. The final amount of contingent consideration of

$45

thousand was paid out during the

three

months ended

March

31,

2018.

- Definition

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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