Business Combination

12 Months Ended

Dec. 31, 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 9)		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 in 2014. 

In connection with the acquisition, the Company is obligated to pay an earn-out of up to $550 based upon the level of revenues generated from the acquired products during the four calendar years following closing.  At the time of acquisition, the Company recorded a contingent liability of $472 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 value 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.