Fair Value Measurement

12 Months Ended

Dec. 31, 2013

Fair Value Measurement [Abstract]

Fair Value Measurement

Note 12 - Fair Value Measurement

We apply fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amounts for cash and cash equivalents, investments in certificates of deposit, accounts payable and accrued expenses approximate their fair values due to the short period of time until maturity.

Certificate of deposits: Fair value measured at face value plus accrued interest.

Mutual Funds: Valued at the quoted net asset value (NAV) of shares held.

Corporate, Municipal and U.S. Agency securities:  Fair value measured at the closing price reported on the active market on which the individual securities are traded.

Series I Warrants: Fair value measured by using a Binomial valuation model. As of December 31, 2013, the assumptions used to measure fair value of the liability embedded in our outstanding Series I Warrants included a warrant exercise price of $3.59 per share, a common share price of $19.41, a discount rate of 1.75%, and a volatility of 91.55%. As of December 31, 2012, the assumptions used to measure fair value of the liability embedded in our outstanding Series I Warrants included a warrant exercise price of $3.59 per share, a common share price of $29.28, a discount rate of 0.72%, and a volatility of 94.15%.

The following table shows our cash and available-for-sale securities adjusted cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents of investments available for sale as of December 31, 2013 and 2012 respectively (in thousands):

	December 31, 2013
										Cash		Investments
	Adjusted		Unrealized		Unrealized			Fair		and Cash		Available
	Cost		Gains		Losses			Value		Equivalents		for Sale
Cash	$	11,699	$	-	$	-		$	11,699	$	11,699	$	-
Level 1:
Mutual funds		73		-		-			73		73		-
Corporate securities		10,782		-		-			10,782		2,325		8,457
Municipal securities		2,173		-		-			2,173		665		1,508
U.S agency securities		14,287		-		(25	)		14,262		4,411		9,851
		27,315		-		(25	)		27,289		7,474		19,815
Total	$	39,014	$	-	$	(25	)	$	38,988	$	19,173	$	19,815

	December 31, 2012
									Cash		Investments
	Adjusted		Unrealized		Unrealized		Fair		and Cash		Available
	Cost		Gains		Losses		Value		Equivalents		for Sale
Cash	$	19,661	$	-	$	-	$	19,661	$	19,661	$	-
Level 1:
Certificates of deposit		17,836		-		-		17,836		-		17,836
Corporate securities		8,649		8		-		8,657		-		8,657
		26,485		8		-		26,493		-		26,493
Total	$	46,146	$	8	$	-	$	46,154	$	19,661	$	26,493

The maturities of the Company's marketable securities generally range from within one to two years. Actual maturities could differ from contractual maturities due to call or prepayment provisions.

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of December 31, 2013 (in thousands):

	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
	(Level 1)			(Level 2)			(Level 3)			Total
Series l Warrants		$	—		$	—		$	2,564		$	2,564
Total		$	—		$	—		$	2,564		$	2,564

The following table sets forth, by level within the fair value hierarchy, our financial instrument liabilities as of December 31, 2012 (in thousands):

	Quoted Prices in Active Markets for Identical Assets			Significant Other Observable Inputs			Significant Unobservable Inputs
	(Level 1)			(Level 2)			(Level 3)			Total
Series l Warrants		$	—		$	—		$	4,172		$	4,172
Total		$	—		$	—		$	4,172		$	4,172

The following table sets forth a summary of changes in the fair value of our Level 3 financial instrument liability for the year ended December 31, 2013, 2012 and 2011 (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Year ended December 31, 2013			Year ended December 31, 2012			Year ended December 31, 2011
Beginning Balance	$	4,172		$	4,699		$	14,364
(Gain) losses included in losses		(1,608	)		927			5,595
Settlements		—			(1,454	)		(15,260	)
Ending Balance	$	2,564		$	4,172		$	4,699