Note 19 - Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 19 Fair Value Measurements

We record fair values at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of December 31, 2023, we have equity securities and an equity method fair value option (refer to Note 5), forward foreign currency exchange contracts for inventory purchases (refer to Note 20) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics and OPKO Renal that are required to be measured at fair value on a recurring basis. In addition, in connection with our investment and our consulting agreement with BioCardia, we record the related BioCardia options at fair value as well as the warrants from COCP.

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:

	Fair value measurements as of December 31, 2023
	Quoted
	prices in
	active		Significant
	markets for		other		Significant
	identical		observable		unobservable
	assets		inputs		inputs
(In thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Money market funds	$	32,404	$	—	$	—	$	32,404
Equity securities		116		—		—		116
Equity Method - fair value option		9,786		—		—		9,786
Common stock options/warrants		—		2		—		2
Total assets	$	42,306	$	2	$	—	$	42,308
Liabilities:
Forward contracts	$	—	$	29	$	—	$	29
Total liabilities	$	—	$	29	$	—	$	29

	Fair value measurements as of December 31, 2022
	Quoted
	prices in
	active		Significant
	markets for		other		Significant
	identical		observable		unobservable
	assets		inputs		inputs
(In thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Assets:
Money market funds	$	102,773	$	—	$	—	$	102,773
Equity securities		648		—		—		648
Equity Method - fair value option		21,120		—		—		21,120
Common stock options/warrants		—		28		—		28
Total assets	$	124,541	$	28	$	—	$	124,569
Liabilities:
Forward contracts	$	—	$	1,123	$	—	$	1,123
Contingent consideration:		—		—		1,036		1,036
Total liabilities	$	—	$	1,123	$	1,036	$	2,159

The carrying amount and estimated fair value of our 2025 Notes, as well as the applicable fair value hierarchy tiers, are contained in the table below. The fair value of the 2025 Notes is determined using inputs other than quoted prices in active markets that are directly observable.

	December 31, 2023
	Carrying		Total
(In thousands)	Value		Fair Value		Level 1		Level 2		Level 3
2025 Notes	$	143,250	$	142,411	$	—	$	142,411	$	—

There have been no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy.

As of December 31, 2023 and 2022, the carrying value of our other financial instrument assets approximates their fair value due to their short-term nature or variable rate of interest.

The following tables reconcile the beginning and ending balances of our Level 3 assets and liabilities as of December 31, 2023 and 2022:

	December 31, 2023
(In thousands)	Contingent consideration
Balance at December 31, 2022	$	1,036
Change in fair value:
Included in results of operations		(1,036	)
Foreign currency impact		—
Balance at December 31, 2023	$	—

	December 31, 2022
(In thousands)	Contingent consideration
Balance at December 31, 2021	$	2,837
Change in fair value
Included in results of operations		(1,312	)
Foreign currency impact		(489	)
Balance at December 31, 2022	$	1,036

The estimated fair values of our financial instruments have been determined by using available market information and what we believe to be appropriate valuation methodologies. We use the following methods and assumptions in estimating fair value:

Contingent consideration – We estimate the fair value of the contingent consideration utilizing a discounted cash flow model for the expected payments based on estimated timing and expected revenues. We use several discount rates depending on each type of contingent consideration related to OPKO Diagnostics, CURNA and OPKO Renal transactions. As of December 31, 2023, we had no contingent consideration balance recorded in accrued expenses and other long-term liabilities. As of December 31, 2022, $1.0 million of contingent consideration was recorded in accrued expenses and other long-term liabilities. As of December 31, 2021, of the $2.8 million of contingent consideration, $0.5 million is recorded in Accrued expenses and $2.3 million is recorded in Other long-term liabilities. As a result of our execution of the CAMP4 Agreement (as defined in Note 16), we will have to pay a percentage of any payments received under the CAMP4 Agreement to the former CURNA stockholders.