Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements

4. Fair Value Measurements

The Company accounts for fair value measurements of its financial assets and liabilities and non-financial assets and non-financial liabilities, except those that are recognized or disclosed in the financial statements at fair value on a recurring basis. The accounting standard defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.  The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

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

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; 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 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2011 and December 31, 2010 are as follows:

($ in thousands)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for
			Identical		Significant Other		Significant
	Balance as of		Assets/Liabilities		Observable Inputs		Unobservable
Description	September 30, 2011		(Level 1)		(Level 2)		Inputs (Level 3)
Cash equivalents	$	117,641	$	117,641	$	-	$	-
Warrant liability	$	22,584	$	-	$	22,584	$	-

($ in thousands)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for
			Identical		Significant Other		Significant
	Balance as of		Assets/Liabilities		Observable Inputs		Unobservable
Description	December 31, 2010		(Level 1)		(Level 2)		Inputs (Level 3)
Cash equivalents	$	59,219	$	59,219	$	-	$	-
Warrant liability	$	27,311	$	-	$	27,311	$	-

The warrants were valued using a Black-Scholes valuation model.  See Note 7 for additional disclosures on the valuation methodology and significant assumptions.