Fair value measurement

9 Months Ended

Sep. 30, 2011

Fair value measurement

Fair value measurement

6. Fair value measurement

ASC 820, Fair Value Measurements and Disclosures, establishes a three-tiered hierarchy that draws a distinction between market participant assumptions based on (i) quoted prices (unadjusted) in active markets for identical assets and liabilities (Level 1); (ii) inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and (iii) unobservable inputs that require us to use present value and other valuation techniques in the determination of fair value (Level 3). We did not make any transfers in and out of the Level 1 fair value tier.

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

At September 30, 2011 (unaudited)	Level 1		Level 3		Total
	(in thousands)
Assets:
Cash equivalents	$	69,704	$	—	$	69,704
Marketable securities	8,373		—		8,373
Restricted cash	1,066		—		1,066
Total assets	$	79,143	$	—	$	79,143

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 unaudited condensed consolidated balance sheets. The increase in the fair value of the warrants is included in interest and other (expense) income in the condensed statement of operations for the three and nine months ended September 30, 2011.  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 nine months ended September 30, 2011:

Balance at December 31, 2010	$	140
Increase in the fair value of the liability	132
Warrants to purchase preferred stock that were exercised and converted	(272		)
Balance at September 30, 2011	$	—