General form of registration statement for all companies including face-amount certificate companies

FAIR VALUE MEASUREMENTS

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FAIR VALUE MEASUREMENTS
9 Months Ended 12 Months Ended
Sep. 30, 2021
Dec. 31, 2020
Fair Value Disclosures [Abstract]    
FAIR VALUE MEASUREMENTS

 

6. 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 and warrant liability. 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:

 SCHEDULE OF FINANCIAL INSTRUMENT MEASURED ON RECURRING BASIS

    As of September 30, 2021     Fair Value Measurements  
    Carrying     Fair     As of September 30, 2021  
    Amount     Value     Level 1     Level 2     Level 3  
              (unaudited)              
Liabilities:                              
Contingent consideration:                                        
Asuragen (1)   $ 2,136     $ 2,136     $       -     $ -     $ 2,136  
Other long-term liabilities:                                        
Warrant liability (2)     158       158       -       -       158  
    $ 2,294     $ 2,294     $ -     $ -     $ 2,294  

 

    As of December 31, 2020     Fair Value Measurements  
    Carrying     Fair     As of December 31, 2020  
    Amount     Value     Level 1     Level 2     Level 3  
                               
Liabilities:                                        
Contingent consideration:                                        
Asuragen (1)   $ 2,216     $ 2,216     $ -     $ -     $ 2,216  
Other long-term liabilities:                                        
Warrant liability (2)     21       21       -       -       21  
    $ 2,237     $ 2,237     $ -     $ -     $ 2,237  

 

(1)(2) See Note 9, Accrued Expenses and Long-Term Liabilities 

 

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.

 

 

A roll forward of the carrying value of the Contingent Consideration Liability and the 2017 Underwriters’ Warrants to September 30, 2021 is as follows:

 SCHEDULE OF FAIR VALUE, ASSETS MEASURED ON RECURRING BASIS, UNOBSERVABLE INPUT RECONCILIATION

                     

Cancellation

of Obligation/

   

Adjustment

 to Fair Value/

       
    December 31, 2020     Payments     Accretion     Conversions Exercises     Mark to Market     September 30,
2021
 
    (unaudited)  
Contingent consideration liability   $ 2,216     $ (398 )   $ 375     $       -     $ (57 )   $ 2,136  
                                                 
Underwriters Warrants     21       -       -       -       137       158  
    $ 2,237     $ (398 )   $ 375     $ -     $ 80     $ 2,294  

 

Certain of the Company’s non-financial assets, such as other intangible assets and goodwill, 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. 

6. 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 consolidated financial statements include contingent consideration and warrant liability. 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 for assets and liabilities include certain unobservable inputs in the assumptions and projections used 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 December 31, 2020     Fair Value Measurements  
    Carrying     Fair     As of December 31, 2020  
    Amount     Value     Level 1     Level 2     Level 3  
                                     
Liabilities:                                        
Contingent consideration:                                        
Asuragen (1)   $ 2,216     $ 2,216     $ -     $      -     $ 2,216  
Other long-term liabilities:                                        
Warrant liability (2)     21       21       -       -       21  
    $ 2,237     $ 2,237     $ -     $ -     $ 2,237  

 

    As of December 31, 2019     Fair Value Measurements  
    Carrying     Fair     As of December 31, 2019  
    Amount     Value     Level 1     Level 2     Level 3  
                               
Liabilities:                                        
Contingent consideration:                                        
Asuragen (1)   $ 2,893     $ 2,893     $    -     $    -     $ 2,893  
Other long-term liabilities:                                        
Warrant liability (2)     82       82       -       -       82  
    $ 2,975     $ 2,975     $ -     $ -     $ 2,975  

 

In connection with the acquisition of certain assets from Asuragen, 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.

 

                      Cancellation     Adjustment        
                     

of Obligation/

   

to Fair Value/

       
    December 31,
2019
    Payments     Accretion    

Conversions

Exercises

   

Mark to

Market

    December 31,
2020
 
                                     
Asuragen   $ 2,893     $ (737 )   $ 549     $                 -     $ (489 )   $ 2,216  
                                                 
Underwriters Warrants     82       -       -       -       (61 )     21  
    $ 2,975     $ (737 )   $ 549     $ -     $ (550 )   $ 2,237  

 

 

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.