Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2015

Changes in the Company’s warranty liability for the nine months ended September 30, 2015 are as follows:


(in thousands)	2015
Warranty liability, January 1	$	443
Provision for current period		150
Current period claims and adjustments		(102	)

Warranty liability, September 30	$	491

Fair Value Remeasurement Based on Significant Inputs Not Observable, Level 3 Measurement

The Company determines the fair value of purchase price obligations on a recurring basis based on a probability-weighted discounted cash flow analysis and Monte Carlo simulation. The fair value remeasurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in the fair value hierarchy. In each period, the Company reassesses its current estimates of performance relative to the stated targets and adjusts the liability to fair value. Any such adjustments are included as a component of selling, general and administrative expenses in the Consolidated Statement of Operations. Changes in the fair value of purchase price obligations during the nine months ended September 30, 2015 were as follows:


(in thousands)	2015
Fair value, January 1	$	12,355
Fair value of acquisition liabilities paid during the period		(6,322	)
Fair value of consideration issued		2,301
Change in fair value		739

Fair value, September 30	$	9,073

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

The following table presents quantitative information about Level 3 fair value measurements as of September 30, 2015:


(in thousands)	Fair Value at September 30, 2015		Valuation Technique	Unobservable Inputs
Earnout liabilities	$	7,371	Income approach	Discount rate –15.5%

Stock distribution price floor		1,352	Monte Carlo simulation	Volatility – 115%
				Risk free rate – 0.98%
				Dividend yield – 0%

Time based payments		350	Expected payments	None

Fair value, September 30, 2015	$	9,073

Summary of Changes in Allowance for Doubtful Accounts

The following summarizes the changes in the allowance for doubtful accounts for the nine months ended September 30, 2015:


(in thousands)	2015
Allowance for doubtful accounts, January 1	$	516
Additions		828
Write-offs and adjustments		(148	)

Allowance for doubtful accounts, September 30	$	1,196

Estimated Useful Lives of Property and Equipment

The estimated useful lives of property and equipment are as follows:


		Estimated useful lives
Machinery and equipment		3-7 years
Furniture and fixtures		5-7 years
Computers and software		3-7 years
Motor vehicles		5 years
Leasehold improvements		Lesser of lease term or estimated useful life