Fair Value Measurements

12 Months Ended

Dec. 31, 2015

13. Fair Value Measurements


	As of December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	31,515	$	—	$	—	$	31,515
	$	31,515	$	—	$	—	$	31,515


	As of December 31, 2014
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents	$	21,462	$	—	$	—	$	21,462
	$	21,462	$	—	$	—	$	21,462

The reconciliation of the contingent consideration measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:


Balance at December 31, 2014	$	—
Addition of contingent consideration related to Bioceros acquisition		409
Remeasurement of Bioceros contingent consideration		(409)
Balance at December 31, 2015	$	—

The contingent consideration obligation represents the fair value of the net cash payout to former Bioceros shareholders, which is equal to the aggregate amount of: (a) Bioceros’ net working capital as the acquisition date; plus (b) revenue generated from Bioceros customers subsequent to the acquisition date and through December 31, 2015; in excess of (c) $1,200, calculated as set forth in the Stock Purchase Agreement.

The amount of the contingent consideration obligation is dependent on the amount of revenue generated by the Company from Bioceros customers through December 31, 2015. The estimates of fair value may not be indicative of the amounts that could be realized in a third-party exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates. The significant unobservable inputs to the valuation were management’s expectation for the amounts of the revenues generated from customers and a discount rate of 10.7%.

The fair value of the contingent consideration obligation recognized on the acquisition date was estimated by applying a risk adjusted discount rate of 10.7% to the potential revenue generated resulting from probability weighted revenue projections. The Company revised its estimate related to the net cash payout based on actual revenue generated from Bioceros customers and net working capital as of the acquisition date and determined it would be less than $1,200. Accordingly, the Company adjusted the fair value of the contingent consideration obligation to reflect a zero balance as of December 31, 2015. The Company does not anticipate to make a payment in connection with the net cash payout.

As of December 31, 2015 and 2014, the Company did not have any liabilities measured at fair value on a recurring basis.

- 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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