Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Fair Value Measurements

v3.22.1
Note 4 - Fair Value Measurements
3 Months Ended
Mar. 31, 2022
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

Note 4.  Fair Value Measurements

 

The Company 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 principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

 

 

 

Level 1—Quoted prices in active markets for identical assets or liabilities;

 

 

 

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

 

 

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The following table represents the fair value hierarchy for the Company’s financial instruments measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021:

   

March 31, 2022

 
   

Level 1

   

Level 2

   

Level 3

   

Total

 

Cash equivalents:

                               

Money market funds

  $ 151,231     $ -     $ -     $ 151,231  

Other liabilities:

                               

Fair value of contingent consideration

  $ -     $ -     $ 942,609     $ 942,609  

 

   

December 31, 2021

 
   

Level 1

   

Level 2

   

Level 3

   

Total

 

Cash equivalents:

                               

Money market funds

  $ 1,600,663     $ -     $ -     $ 1,660,663  

Other liabilities:

                               

Fair value of contingent consideration

  $ -     $ -     $ 930,000     $ 930,000  

 

The following table is a rollforward of the Level 3 fair value measurements.

 

Fair value of contingent consideration:

       

December 31, 2021

  $ 930,000  

Change in fair value

    12,609  

March 31, 2022

  $ 942,609  

 

The change in fair value of contingent consideration is included in other income (expense) on the condensed consolidated statement of operations. There were no unrealized gains or losses included in income for the three months ended March 31, 2022.