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Fair Value of Financial Instruments
12 Months Ended
Dec. 31, 2019
Fair Value of Financial Instruments [Abstract]  
Fair Value of Financial Instruments
12.  Fair Value of Financial Instruments

ASC 820, Fair Value Measurement (ASC 820) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principle or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The levels of the fair value hierarchy established by ASC 820 are:
Level 1: inputs are quoted prices, unadjusted, in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2: inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. A Level 2 input must be observable for substantially the full term of the asset or liability. The Monte Carlo model was used to calculate the fair value of level 2 instruments. The inputs used are current stock price, expected term, risk-free rate, number of trials, volatility and interest rates.
Level 3: inputs are unobservable and reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability. The contingent consideration was based on EBITDA.
The Company considers the recorded value of certain of its financial assets and liabilities, which consist primarily of cash equivalents, accounts receivable and accounts payable, to approximate the fair value of the respective assets and liabilities at December 31, 2019 and 2018 based upon the short-term nature of the assets and liabilities.
As of December 31, 2019, the Company had four standby letters of credit totaling $1.2 million which represent performance bonds on three contracts.

The following table presents assets and liabilities measured at fair value at December 31, 2019:

  
Quoted Prices
in Active Markets
for Identical Assets
  
Significant
Other Observable
Inputs
  
Significant
Unobservable
Inputs
    
(in thousands)
 
(Level 1)
  
(Level 2)
  
(Level 3)
  
Total
 
             
             
Money market funds
 
$
434
  
$
-
  
$
-
  
$
434
 
Foreign exchange contracts
  
-
   
49
   
-
   
49
 
                 
Total assets
 
$
434
  
$
49
  
$
-
  
$
483
 
 
Liability awards
  
-
   
(9
)
  
-
   
(9
)
Interest rate swap contract
  
-
   
(160
)
  
-
   
(160
)
                 
Total liabilities
 
$
-
  
$
(169
)
 
$
-
  
$
(169
)

The following table presents assets and liabilities measured at fair value at December 31, 2018:

  
Quoted Prices
in Active Markets
for Identical Assets
  
Significant
Other Observable
Inputs
  
Significant
Unobservable
Inputs
    
(in thousands)
 
(Level 1)
  
(Level 2)
  
(Level 3)
  
Total
 
             
             
Money market funds
 
$
824
  
$
-
  
$
-
  
$
824
 
Foreign exchange contracts
  
-
   
43
   
-
   
43
 
                 
Total assets
 
$
824
  
$
43
  
$
-
  
$
867
 
                 
Liability awards
 
$
-
  
$
(118
)
 
$
-
  
$
(118
)
Interest rate swap contract
  
-
   
(103
)
  
-
   
(103
)
                 
Total liabilities
 
$
-
  
$
(221
)
 
$
-
  
$
(221
)

During the years ended December 31, 2019 and 2018, the Company did not have any transfers into or out of Level 3.

The following table provides a roll-forward of the fair value of the contingent consideration categorized as Level 3 for the year ended December 31, 2019:
(in thousands)
Balance, January 1, 2019
 
$
-
 
Issuance of contingent consideration in connection with acquisitions
  
1,200
 
Change in fair value
  
(1,200
)
Balance, December 31, 2019
 
$
-