Fair Value on Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value of Financial Assets and Liabilities

The fair values of certain of the Company’s financial assets and liabilities were determined using the following inputs at September 30, 2013 (in thousands):


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds ⁽¹⁾	$	7,862	$	7,862	$	—	$	—
Corporate debt securities ⁽²⁾		24,948		—		24,948		—
United States government agency securities ⁽²⁾		4,023		—		4,023		—

Total financial assets	$	36,833	$	7,862	$	28,971	$	—


Warrant liability	$	22,706	$	—	$	—	$	22,706

Total financial liabilities	$	22,706	$	—	$	—	$	22,706

(1)	Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

(2)	Included in short-term investments on the Company’s condensed consolidated balance sheets.

The fair values of certain of the Company’s financial assets and liabilities were determined using the following inputs at December 31, 2012 (in thousands):


	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market funds ⁽¹⁾	$	10,268	$	10,268	$	—	$	—

Total financial assets	$	10,268	$	10,268	$	—	$	—


Warrant liability	$	5,903	$	—	$	—	$	5,903

Total financial liabilities	$	5,903	$	—	$	—	$	5,903

(1)	Included in cash and cash equivalents on the Company’s condensed consolidated balance sheets.

Reconciliation of Fair Value Measurement on Liabilities Using Significant Unobservable Inputs

A reconciliation of the beginning and ending balances for warrant liability using significant unobservable inputs (Level 3) from December 31, 2012, to September 30, 2013, was as follows (in thousands):


Balance at December 31, 2012	$	5,903
Increase in fair value of warrants		16,803
Settlement of warrants exercised		—

Balance at September 30, 2013	$	22,706

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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