Fair Value

Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1 — Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

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 and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

For Level 2 financial investments, the Company's investment advisor provides the Company with monthly account statements documenting the value of each investment based on prices received from an independent third-party valuation service provider. This third party evaluates the types of securities in the Company's investment portfolio and calculates a fair value using a multi-dimensional pricing model that includes a variety of inputs, including quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks and default rates that are observable at commonly quoted intervals. As the Company is ultimately responsible for the determination of the fair value of these instruments, the Company performs quarterly analyses using prices obtained from another independent provider of financial instrument valuations, to validate that the prices the Company has used are reasonable estimates of fair value.

Fair Value of Financial Instruments

The following table presents the Company's financial instruments that were measured at fair value on a recurring basis at December 31, 2013 by level within the fair value hierarchy (in thousands):



	December 31, 2013
	Level 1		Level 2		Level 3		Total
Financial Assets
Money market funds	$	16,089	$	—	$	—	$	16,089
Corporate bonds	—		1,005		—		1,005
U.S. Treasury obligations	—		2,000		—		2,000
Common shares of CO2 Solutions			795		—		795
Total	$	16,089	$	3,800	$	—	$	19,889

The following table presents the Company's financial instruments that were measured at fair value on a recurring basis at December 31, 2012 by level within the fair value hierarchy (in thousands):



	December 31, 2012
	Level 1		Level 2		Level 3		Total
Financial Assets
Money market funds	$	24,789	$	—	$	—	$	24,789
Commercial paper	—		1,500		—		1,500
Corporate bonds	—		9,522		—		9,522
U.S. Treasury obligations	—		5,516		—		5,516
Common shares of CO2 Solutions	610		—		—		610
Total	$	25,399	$	16,538	$	—	$	41,937

The Company estimated the fair value of its investment in 10,000,000 common shares of CO₂ Solutions using the market value of common shares as determined by trading on the TSX Venture Exchange. These securities have been reclassified to Level 2 at December 31, 2013 after further analysis of the fair value inputs available for this investment. The Company believes the fair value inputs do not meet all of the criteria for Level 1 classification primarily due to the low trading volume of the stock in 2013. As of December 31, 2013, the fair value of the Company's investment in CO₂ Solutions’ common stock was $795,000 with an unrealized gain of $232,000. During 2012, the Company evaluated its investment in the common shares of CO₂ Solutions and determined the impairment was other-than-temporary considering the length of time and extent to which the fair value has been less than its cost, the financial condition and near term prospects of CO₂ Solutions, and its management’s ability and intent to hold the securities until fair value recovers. As a result of the above analysis, the Company recorded an impairment of $756,000 during the year ended December 31, 2012 as an expense in its consolidated statement of operations as selling, general and administrative expense. At December 31, 2012, the estimated fair value of its investment in CO₂ Solutions' common stock was $610,000 and the unrealized gain was $47,000.

The unrealized gain for the years ended December 31, 2013 and 2012, is reflected on the consolidated statements of comprehensive loss, net of a related tax expense of $66,000 and $69,000, respectively.

Fair Value of Assets Held for Sale

As of December 31, 2013, we had assets held for sale of $2,179,000 related to lab equipment located in the Unites States and Hungary. The fair value of these assets was determined based on Level 3 inputs, primarily sales data for similar properties. Losses recognized in fiscal year 2013 due to fair value remeasurements using Level 3 inputs were $1,571,000. The fair value of assets held for sale at December 31, 2013, measured on a nonrecurring basis, is as follows (in thousands):



	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Assets held for sale	$	—	$	—	$	2,179