Business Combination

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Business Combination

Note 2.  Business Combination

On February 18, 2014, the Company acquired Harvest Engineering, Inc.’s wireless hazard monitoring technology system and Insta-Link product family, together with related technology and intellectual property rights, for a total purchase price of $1,643.

The fair value of the consideration transferred on the acquisition date consisted of the following:

Cash consideration	$	400
Note payable issued to seller (Note 8)		771
Contingent earn-out liability		472
Total consideration	$	1,643

The transaction was recorded as a business combination and the results of operations have been included in the consolidated statement of comprehensive income since the date of acquisition. Acquisition fees of approximately $15 incurred in connection with the transaction were recorded in operating expenses for the nine months ended September 30, 2014. 

In connection with the acquisition, the Company is obligated to pay an earn-out of up to $550, based on the level of revenues generated from the acquired products during the four calendar years following closing.  The Company currently has a contingent liability of $455 representing the fair value estimate of the earn-out based upon the Company’s projected likelihood of meeting the revenue targets.  

The following table summarizes the estimated fair values of the assets acquired at the acquisition date:

In-process research and development	$	1,478
Noncompete agreement		120
Deferred service costs		45
Total assets acquired	$	1,643

The noncompete agreement is being amortized over a five-year period.  The fair value of the noncompete agreement was estimated using a discounted cash flow model.  The unobservable inputs are considered Level 3 inputs in the fair value hierarchy.