Fair value measurement

12 Months Ended

Dec. 31, 2011

Fair value measurement

Fair value measurement

8. Fair value measurement

        The following table sets forth our financial assets and financial liabilities that are measured at fair value on a recurring basis:

At December 31, 2011	Level 1		Level 3		Total
	(in thousands)
Assets:
Cash equivalents	$	81,082	$	—	$	81,082
Restricted cash		465		—		465
Total assets	$	81,547	$	—	$	81,547

At December 31, 2010	Level 1		Level 3		Total
	(in thousands)
Assets:
Cash equivalents	$	14,790	$	—	$	14,790
Marketable securities		9,373		—		9,373
Restricted cash		1,001		—		1,001
Total assets	$	25,164	$	—	$	25,164
Liabilities:
Preferred stock warrants	$	—	$	140	$	140
Total liabilities	$	—	$	140	$	140

        Our Level 3 financial liabilities, accounted for at fair value on a recurring basis, consisted of warrants to purchase shares of our Series B convertible preferred stock, which are recorded at fair value in other liabilities on the accompanying consolidated balance sheets. The fair value of the warrants was determined under the Black-Scholes model using various assumptions including the expected term of the warrants, volatility of our common stock, risk free interest rate, and the dividend rate. To determine the estimated fair value of our common stock included in this model, we used an in depth valuation analysis of our common stock prepared with the assistance of an independent valuation firm. The increase in the fair value of the warrants is included in interest and other (expense) income in the accompanying consolidated statement of operations for the years ended December 31, 2011 and 2010. The following table provides reconciliation between the beginning and ending balances of preferred stock warrants in the tables above that used significant unobservable inputs (Level 3) for the periods presented:

Balance at December 31, 2009	$	72
Increase in the fair value of the liability		68
Balance at December 31, 2010		140
Increase in the fair value of the liability		132
Exercise and conversion of preferred stock warrants into common stock		(272	)
Balance at December 31, 2011	$	—