XML 22 R12.htm IDEA: XBRL DOCUMENT v3.23.2
Note 4 - Fair Value Measurements
 3 Months Ended
Jun. 30, 2023
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 4. Fair Value Measurements

 

Our financial instruments consist primarily of cash and cash equivalents, trade accounts receivable, obligations under trade accounts payable, and debt. Due to their short-term nature, the carrying values for cash and cash equivalents, trade accounts receivable, and trade accounts payable approximate fair value; they are classified within Level 1 of the fair value hierarchy. 

 

Historically, the financial instruments that subject us to the highest concentration of credit risk are cash and cash equivalents and accounts receivable. We maintain relationships and cash deposits at multiple banking institutions across the world in an effort to diversify and reduce risk of loss. Concentration of credit risk with respect to accounts receivable is limited to customers to whom we make significant sales. One distributor accounted for approximately 13% of total trade receivables as of June 30, 2023, compared to 18% as of our fiscal year ended March 31, 2023. The distributor's outstanding balance was current as of June 30, 2023, and the substantial majority has since been collected.

 

We reserve an allowance for potential write-offs of accounts receivable using historical collection experience and current and expected future economic and market conditions. To manage credit risk, we consider the creditworthiness of new and existing customers, and we regularly review outstanding balances and payment histories. We  may require pre-payments from customers under certain circumstances and  may limit future purchases until payments are made on past due amounts.

 

We have outstanding $172,500 aggregate principal of 1.375% convertible senior notes due  August 15, 2025 (the "Notes"). We estimate the fair value of the Notes based on the last actively traded price or observable market input preceding the end of the reporting period, and the fair value is approximately correlated to our stock price. The estimated fair value and carrying value of the Notes was as follows:

 

  

June 30, 2023

  

March 31, 2023

 
  

Carrying Value

  

Fair Value (Level 2)

  

Carrying Value

  

Fair Value (Level 2)

 

Notes

 $170,502  $154,495  $170,272  $161,072 

 

Amounts recognized or disclosed at fair value in the unaudited condensed consolidated financial statements on a nonrecurring basis include the initial recognition and disclosure of most assets and liabilities purchased in a business acquisition and any related measurement period adjustments. Additionally, assets such as property and equipment, operating lease assets, goodwill, and other intangible assets are adjusted to fair value if determined to be impaired. We recorded no impairments during the three months ended June 30, 2023 or 2022. Fair values of such assets and liabilities require measurement using Level 3 inputs. There were no transfers between the levels of the fair value hierarchy during the three months ended June 30, 2023 or 2022, respectively.

 

We are obligated to pay contingent consideration of $1,500 cash related to the Belyntic acquisition upon approval of pending patent applications. The fair value of the contingent consideration was $1,137 as of June 30, 2023 and is recorded in other long-term liabilities on the accompanying Condensed Consolidated Balance Sheets. We estimated the fair value of the contingent consideration at inception using a probability-weighted outcome analysis based on our expectations of patent approval, leveraging our historical experience and expert input, and we adjust the contingent consideration to estimated fair value at each reporting period through earnings.