Fair Value on Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value of Financial Assets and Liabilities

The Company’s financial assets and liabilities were recorded at fair value in the condensed consolidated balance sheets at September 30, 2014, as follows (in thousands):


	Total		Level 1		Level 2		Level 3
Money market funds ⁽¹⁾	$	6,185	$	6,185	$	0	$	0
Corporate debt securities ⁽²⁾		21,802		0		21,802		0
United States government agency securities ⁽²⁾		3,429		0		3,429		0

Total financial assets	$	31,416	$	6,185	$	25,231	$	0


Warrant liability ⁽³⁾	$	3,931	$	0	$	0	$	3,931

Total financial liabilities	$	3,931	$	0	$	0	$	3,931

(1)

Included in cash and cash equivalents on the Company’s accompanying unaudited condensed consolidated balance sheets.

(2)

Included in short-term investments on the Company’s accompanying unaudited condensed consolidated balance sheets.

(3)

Included in current liabilities on the Company’s accompanying unaudited condensed consolidated balance sheets.

The Company’s financial assets and liabilities were recorded at fair value in the accompanying unaudited condensed consolidated balance sheets at December 31, 2013, as follows (in thousands):


	Total		Level 1		Level 2		Level 3
Money market funds ⁽¹⁾	$	8,650	$	8,650	$	0	$	0
Corporate debt securities ⁽²⁾		23,173		0		23,173		0
United States government agency securities ⁽²⁾		5,018		0		5,018		0

Total financial assets	$	36,841	$	8,650	$	28,191	$	0


Warrant liability ⁽³⁾	$	20,390	$	0	$	0	$	20,390

Total financial liabilities	$	20,390	$	0	$	0	$	20,390

(1)

Included in cash and cash equivalents on the Company’s accompanying unaudited condensed consolidated balance sheets.

(2)

Included in short-term investments on the Company’s accompanying unaudited condensed consolidated balance sheets.

(3)

Included in current liabilities on the Company’s accompanying unaudited condensed consolidated balance sheets.

Reconciliation of Fair Value Measurement on Liabilities Using Significant Unobservable Inputs

A reconciliation of the beginning and ending balances for the warrant liability using significant unobservable inputs (Level 3) from December 31, 2013 to September 30, 2014, was as follows (in thousands):


Balance at December 31, 2013	$	20,390
Decrease in fair value of warrants		(14,263)
Settlement of warrants exercised		(2,196)

Balance at September 30, 2014	$	3,931

- 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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