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Fair Value Measurements

12 Months Ended

Dec. 31, 2020

The carrying amount of cash and cash equivalents, receivables, accounts payable, accrued compensation and benefits, other accrued liabilities, and related party payables approximate fair value due to the short maturity of these instruments.

Assets

The following table presents the placement in the fair value hierarchy of financial assets that are measured at fair value on a recurring basis, including the items for which the fair value option has been elected, as of December 31, 2020:


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2020
Assets
United States government debt securities	$	—	$	48,061	$	—	$	48,061

Other	—		264		—		264
Total	$	—	$	48,325	$	—	$	48,325


	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		December 31, 2019
Assets
United States government debt securities	$	—	$	8,996	$	—	$	8,996

Other	—		264		—		264
Total	$	—	$	9,260	$	—	$	9,260

The method used to estimate the fair value of the Level 2 short-term debt investments in the tables above is based on professional pricing sources for identical or comparable instruments, rather than direct observations of quoted prices in active markets. During 2019, the Company's equity securities of AquaBounty (Note 1) and preferred stock owned in one of its collaborators (Note 18) were classified as Level 3 within the fair value hierarchy prior to disposition.

The following table summarizes the changes in the Level 3 investments during the year ended December 31, 2019.


	2019
Beginning balance	$	191



Retained interest in deconsolidated subsidiary	14,239
Dividend income from investments in preferred stock	48
Net unrealized appreciation in the fair value of the investments in equity securities and preferred stock	7,446

Proceeds from sale of equity securities	(21,587)
Proceeds to be received from preferred stock	(337)
Ending balance	$	—

Liabilities

The carrying values of the Company's long-term debt, excluding the Convertible Notes, approximates fair value due to the length of time to maturity and/or the existence of interest rates that approximate prevailing market rates.

The calculated fair value of the Convertible Notes (Note 12) was approximately $165,000 and $126,000 as of December 31, 2020 and 2019, respectively, and is based on the recent third-party trades of the instrument as of the balance sheet date. The fair value of the Convertible Notes is classified as Level 2 within the fair value hierarchy as there is not an active market for the Convertible Notes, however, third-party trades of the instrument are considered observable inputs. The Convertible Notes are reflected on the accompanying consolidated balance sheets at amortized cost, which was $168,147 and $157,560 as of December 31, 2020 and 2019, respectively.

During the year ended December 31, 2020, the Company's contingent consideration liability, which was $585 as of December 31, 2019, was reduced to $0 as the period for potential payment of this contingent consideration expired without payment in June 2020. The contingent consideration liability was remeasured to fair value at each reporting date until the contingency was resolved, and those changes in fair value were recognized in earnings. The changes in the fair value of the Level 3 liability during the years ended December 31, 2020 and 2019 were as follows:


	2020		2019
Beginning balance	$	585	$	585
Change in fair value of contingent consideration recognized in selling, general, and administrative expenses	(585)		—
Ending balance	$	—	$	585

See Notes 10 and 11 for discussion of non-recurring fair value estimates used in calculating impairment charges recorded during the year ended December 31, 2020.

- 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.

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