INVESTMENTS AND FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2016

3.	INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company’s fair value hierarchy for its cash equivalents, marketable securities and derivative instruments as of December 31, 2016 and December 31, 2015, respectively, was as follows:

(In thousands)
December 31, 2016	Level 1		Level 2		Level 3		Total
Money market securities	$	16	$	—	$	—	$	16
Total assets	$	16	$	—	$	—	$	16
Derivative instrument payable	$	—	$	467	$	—	$	467
Contingent consideration		—		—		103		103
Total liabilities	$	—	$	467	$	103	$	570

December 31, 2015	Level 1		Level 2		Level 3		Total
Money market securities	$	1,915	$	—	$	—	$	1,915
Total assets	$	1,915	$	—	$	—	$	1,915
Derivative instrument payable	$	—	$	580	$	—	$	580
Contingent consideration		—		—		216		216
Total liabilities	$	—	$	580	$	216	$	796

Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
(in thousands)	Contingent
	consideration
Balance at December 31, 2015	$	216
Payment		(59)
Quarterly fair value adjustment		(54)
Balance at December 31, 2016	$	103

There were no transfers between Level 3 and Level 2 in 2016 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 3 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. Based on the Company’s fourth quarter 2016 analysis, the Company adjusted the current value of the contingent consideration based on updated revenue projections.

- 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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