Fair Value Disclosures [Text Block] |
The following are categories of assets and liabilities measured at fair value on a recurring basis using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3):
| | September 30, 2022 | |
| | (in thousands) | |
| | | | | | | | | | | | | | | | |
Description | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total | |
Assets measured at fair value | | | | | | | | | | | | | | | | |
Cash and cash equivalents (1) | | $ | 13,870 | | | $ | - | | | $ | - | | | $ | 13,870 | |
Restricted cash | | | 1,107 | | | | - | | | | - | | | | 1,107 | |
Short-term investments | | | - | | | | 72,481 | | | | - | | | | 72,481 | |
Long-term investments | | | - | | | | 1,937 | | | | - | | | | 1,937 | |
Total assets measured at fair value | | $ | 14,977 | | | $ | 74,418 | | | $ | - | | | $ | 89,395 | |
Liabilities measured at fair value | | | | | | | | | | | | | | | | |
Contingent consideration | | $ | - | | | $ | - | | | $ | 1,203 | | | $ | 1,203 | |
Total liabilities measured at fair value | | $ | - | | | $ | - | | | $ | 1,203 | | | $ | 1,203 | |
| (1) | Includes investments that are readily convertible to cash with original maturities of 90 days or less. |
| | December 31, 2021 | |
| | (in thousands) | |
| | | | | | | | | | | | | | | | |
Description | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | | Significant Other Observable Inputs (Level 2) | | | Significant Unobservable Inputs (Level 3) | | | Total | |
Assets measured at fair value | | | | | | | | | | | | | | | | |
Cash and cash equivalents (1) | | $ | 18,129 | | | $ | - | | | $ | - | | | $ | 18,129 | |
Restricted cash | | | 1,154 | | | | - | | | | - | | | | 1,154 | |
Short-term investments | | | - | | | | 80,262 | | | | - | | | | 80,262 | |
Long-term investments | | | - | | | | 37,435 | | | | - | | | | 37,435 | |
Total assets measured at fair value | | $ | 19,283 | | | $ | 117,697 | | | $ | - | | | $ | 136,980 | |
Liabilities measured at fair value | | | | | | | | | | | | | | | | |
Contingent consideration | | $ | - | | | $ | - | | | $ | 2,371 | | | $ | 2,371 | |
Total liabilities measured at fair value | | $ | - | | | $ | - | | | $ | 2,371 | | | $ | 2,371 | |
| (1) | Includes investments that are readily convertible to cash with original maturities of 90 days or less. |
The carrying values of accounts receivable, prepaid expenses, employee retention tax credit receivables, other current assets, accounts payable, accrued employee compensation and benefits, accrued expenses, deferred revenue, and other current liabilities as of September 30, 2022, and December 31, 2021, approximate their fair values due to the short-term nature of these items.
The Company’s financial liabilities consisted of contingent consideration payable to Three Heads Investment S.r.l., related to the Company’s 2015 acquisition of the Senhance Surgical System from an assignor to Three Heads Investment S.r.l. (the “Senhance Acquisition”). Adjustments associated with the change in fair value of contingent consideration are included in the Company’s condensed consolidated statements of operations and comprehensive loss.
The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements for contingent consideration utilizing a Monte-Carlo simulation as of September 30, 2022 and December 31, 2021:
| Valuation Methodology | | Significant Unobservable Input | | September 30, 2022 | | | December 31, 2021 | |
| | | | | | | | | | | |
Contingent consideration | Probability weighted income approach | | Milestone dates | | 2031 | | | 2031 | |
| | | Discount rate | | | 16.5 | % | | | 9.5 | % |
| | | Revenue volatility | | | 45.0 | % | | | 39.0 | % |
| | | EUR-to-USD exchange rate | | | 0.98 | | | | 1.14 | |
The following table summarizes the change in fair value, as determined by Level 3 inputs for the contingent consideration for the nine months ended September 30, 2022 and 2021:
| | Fair Value Measurement at Reporting Date (Level 3) | |
| | (in thousands) | |
| | Contingent consideration | |
Balance at December 31, 2021 | | $ | 2,371 | |
Change in fair value | | | (1,168 | ) |
Balance at September 30, 2022 | | $ | 1,203 | |
| | | | |
Current portion | | $ | - | |
Long-term portion | | | 1,203 | |
Balance at September 30, 2022 | | $ | 1,203 | |
| | | | |
Balance at December 31, 2020 | | $ | 3,936 | |
Exercise of warrants | | | - | |
Change in fair value | | | 1,013 | |
Balance at September 30, 2021 | | $ | 4,949 | |
| | | | |
Current portion | | $ | - | |
Long-term portion | | | 4,949 | |
Balance at September 30, 2021 | | $ | 4,949 | |
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