Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (the “exit price”) in an orderly transaction between market participants at the measurement date. A three-level hierarchy is applied to prioritize the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy prioritizes the inputs into three broad levels:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – Inputs are unobservable inputs based on the Company’s assumptions.

The following table represents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2012, and December 31, 2011, and the basis of that measurement (in thousands):

As of December 31, 2012	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Money market funds	$	905	$	905	$	—	$	—
Short-term investments (See Note 4):
Obligations of U.S. government agencies	9,013		9,013		—		—
Obligations of U.S. corporations	6,952		—		6,952		—
Obligations of Non-U.S. corporations	3,336		—		3,336		—
Total short-term investments	19,301		9,013		10,288		—
TOTAL FINANCIAL ASSETS	$	20,206	$	9,918	$	10,288	$	—

As of December 31, 2011	Total Fair Value		Level 1		Level 2		Level 3
ASSETS
Money market funds	$	10,035	$	10,035	$	—	$	—
Agency bonds	275		—		275		—
Short-term investments (See Note 4):
Obligations of U.S. government agencies	6,219		6,219		—		—
Obligations of U.S. corporations	2,630		—		2,630		—
Obligations of Non-U.S. corporations	1,048		—		1,048		—
Total short-term investments	9,897		6,219		3,678		—
TOTAL FINANCIAL ASSETS	$	20,207	$	16,254	$	3,953	$	—

The Company’s financial instruments, including cash equivalents, accounts receivable and accounts payable, are carried at cost, which approximates fair value due to the short-term nature of those instruments.

Money market funds are considered Level 1 investments under the GAAP fair value hierarchy because fair value inputs are unadjusted quoted prices in active markets for identical assets or liabilities. As of March 31, 2012, obligations of U.S. government agencies are also considered Level 1 investments. The remainder of the Company’s short-term investments are considered Level 2 investments under the GAAP fair value hierarchy because the fair value inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

During the years ended December 31, 2012, and December 31, 2011, there were no transfers between Level 1 and Level 2 fair value instruments.