XML 23 R12.htm IDEA: XBRL DOCUMENT
v3.21.2

Fair Value Measurements | 6 Months Ended
--- | ---
Jun. 30, 2021
Fair Value Disclosures [Abstract] |
Fair Value Measurements |
4. | Fair Value Measurements
The Company accounts for certain financial assets at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. A three-level hierarchy is used to show the extent and level of judgment used to estimate fair value measurements. Assets and liabilities measured at fair value on a recurring basis included the following as of June 30, 2021 (in thousands):
|  | Using |  |  |  |
|  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total Fair Value as of June 30, 2021 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 68,978 |  |  | $ | — |  |  | $ | — |  |  | $ | 68,978 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury Obligations |  |  | 70,469 |  |  |  | — |  |  |  | — |  |  |  | 70,469 |
Long-term investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Failed Auction Security |  |  | — |  |  |  | — |  |  |  | 2,561 |  |  |  | 2,561 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration obligations |  |  | — |  |  |  | — |  |  |  | (46 | ) |  |  | (46 | )
Assets and liabilities measured at fair value on a recurring basis included the following as of December 31, 2020 (in thousands):
|  | Using |  |  |  |
|  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total Fair Value as of December 31, 2020 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 69,493 |  |  | $ | — |  |  | $ | — |  |  | $ | 69,493 |
U.S. Treasury Obligations |  |  | 19,998 |  |  |  | — |  |  |  | — |  |  |  | 19,998 |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury Obligations |  |  | 50,166 |  |  |  | — |  |  |  | — |  |  |  | 50,166 |
Long-term investment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Failed Auction Security |  |  | — |  |  |  | — |  |  |  | 2,517 |  |  |  | 2,517 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration obligations |  |  | — |  |  |  | — |  |  |  | (227 | ) |  |  | (227 | )
As of June 30, 2021, there was insufficient observable auction rate security market information available to determine the fair value of the Failed Auction Security using Level 1 or Level 2 inputs. As such, the Company’s investment in the Failed Auction Security was deemed to require valuation using Level 3 inputs. Management, after consulting with advisors, valued the Failed Auction Security using analyses and pricing models similar to those used by market participants (i.e., buyers, sellers, and the broker-dealers responsible for execution of the Dutch auction pricing mechanism by which each issue’s interest rate was set). Management utilized a probability weighted discounted cash flow (“DCF”) model to determine the estimated fair value of this security as of June 30, 2021. The major assumptions used in preparing the DCF model were similar to those described in Note 5—Fair Value Measurements in the Notes to the Consolidated Financial Statements contained in the Company’s 2020 Form 10-K. Quantitative information about Level 3 fair value measurements as of June 30, 2021 is as follows (dollars in thousands):
|  | Fair Value |  |  | Valuation Technique |  | Unobservable Input |  | Weighted Average |
Failed Auction Security |  | $ | 2,561 |  |  | Discounted cash flow |  | Cumulative probability of earning the maximum rate until maturity |  |  | 0.15 | %
|  |  |  |  |  |  |  | Cumulative probability of principal return prior to maturity |  |  | 94.27 | %
|  |  |  |  |  |  |  | Cumulative probability of default |  |  | 5.58 | %
|  |  |  |  |  |  |  | Liquidity risk premium |  |  | 5.00 | %
|  |  |  |  |  |  |  | Recovery rate in default |  |  | 40.00 | %
The change in the estimated fair value calculated for the investment valued on a recurring basis utilizing Level 3 inputs (i.e., the Failed Auction Security) for the six months ended June 30, 2021 was as follows (in thousands):
Balance at the beginning of the period |  | $ | 2,517 |
Credit gain on available-for-sale security included in Other income (expense), net |  |  | 2 |
Gain included in Other comprehensive income |  |  | 42 |
Balance at the end of the period |  | $ | 2,561 |
The Company has classified its contingent consideration obligations as Level 3 because the fair value for these liabilities was determined using unobservable inputs. The liabilities were based on estimated sales of legacy products over the period of royalty payments at the royalty rate, discounted using the Company’s estimated cost of capital. The change in the estimated fair value c alculated for the liabilities valued on a recurring basis utilizing Level 3 inputs (i.e., the Contingent consideration obligations) for the six months ended June 30, 2021 was as follows (in thousands):
Balance at the beginning of the period |  | $ | 227 |
Payments |  |  | (107 | )
Decrease in contingent consideration obligations |  |  | (74 | )
Balance at the end of the period |  | $ | 46 |
There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the six months ended June 30, 2021.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration