Note 2 - Fair Value Measurement

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Fair Value Disclosures [Text Block]

2.

Fair Value Measurement

In accordance with FASB ASC Topic

820,

“Fair Value Measurements and Disclosures,” (“ASC Topic

820”

), the Company measures its cash and cash equivalents and investments at fair value on a recurring basis. The Company also measures certain assets and liabilities at fair value on a non-recurring basis when applying acquisition accounting. ASC Topic

820

clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC Topic

820

establishes a

three

-tier value fair hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level

1

– Observable inputs that reflect quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level

2

– Observable inputs other than quoted prices included in Level

1

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 related assets or liabilities.

Level

3

– Unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

As of

March 31, 2020

and

December 31, 2019,

the Company valued the Astero and CBS contingent consideration and warrant liability at fair value.

There were

no

remeasurements to fair value during the

three

months ended

March 31, 2020

of financial assets and liabilities that are

not

measured at fair value on a recurring basis.

The following tables set forth the Company’s financial assets measured at fair value on a recurring basis as of 

March 31, 2020

and 

December 

31,

2019,

based on the

three

-tier fair value hierarchy:

(In thousands)

As of March 31, 20 20	Level 1		Level 2		Level 3		Total
Assets:
Money market accounts	$	6,400	$	—	$	—	$	6,400
Convertible debt held at fair value		—		—		1,000		1,000
Total		6,400		—		1,000		7,400
Liabilities:
Contingent consideration - business combinations		—		—		1,851		1,851
Warrant liability		—		—		17,667		17,667
Total	$	—	$	—	$	19,518	$	19,518

As of December 31, 2019	Level 1		Level 2		Level 3		Total
Assets:
Money market accounts	$	6,448	$	—	$	—	$	6,448
Convertible debt held at fair value		—		—		1,000		1,000
Total		6,448		—		1,000		7,448
Liabilities:
Contingent consideration - business combinations		—		—		1,914		1,914
Warrant liability		—		—		39,602		39,602
Total	$	—	$	—	$	41,516	$	41,516

The fair values of money market funds classified as Level

1

were derived from quoted market prices as active markets for these instruments exist. The fair values of investments, warrant liability and contingent consideration classified as Level

3

were derived from management assumptions. There have been

no

transfers of assets or liabilities between the fair value measurement levels. The following table presents the changes in investments held at fair value which are measured using Level

3

inputs:

	March 31,		December 31,
(In thousands)	2020		2019
Beginning balance	$	1,000	$	1,000
Purchases		—		—
Change in fair value recognized in net income		—		—
Total	$	1,000	$	1,000

The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level

3

inputs:

	March 31,			December 31,
(In thousands)	2020			2019
Beginning balance	$	1,914		$	—
Additions		—			2,347
Change in fair value recognized in net income		(63	)		50
Payments earned, reclassified to accrued liabilities		—			(483	)
Total	$	1,851		$	1,914

The following table presents the changes in fair value of warrant liabilities which are measured using Level

3

inputs:

	March 31,			December 31,
(In thousands)	2020			2019
Beginning balance	$	39,602		$	28,516
Exercised warrants		(21	)		(1,749	)
Change in fair value recognized in net income		(21,914	)		12,835
Ending balance	$	17,667		$	39,602