Fair Value Of Financial Instruments

9 Months Ended

Sep. 30, 2011

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

Assets and liabilities recorded at fair value in the condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels that 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 — Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

• Level 2 — Observable inputs other than Level 1 prices, 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.

The following table presents the Company's financial instruments that were measured at fair value on a recurring basis as of September 30, 2011 by level within the fair value hierarchy (in thousands):

	September 30, 2011
	Level 1		Level 2		Level 3		Total
Financial Assets
Cash equivalents	$	103,989	$	4,000	$	—	$	107,989
Marketable securities — available-for-sale		8,028		124,320		—		132,348
Total	$	112,017	$	128,320	$	—	$	240,337
Financial Liability
Preferred stock warrant liability	$	—	$	—	$	—	$	—

The following table presents the Company's financial instruments that were measured at fair value on a recurring basis as of December 31, 2010 by level within the fair value hierarchy (in thousands):

	December 31, 2010
	Level 1		Level 2		Level 3		Total
Financial Assets
Cash equivalents — money market funds	$	24,078	$	—	$	—	$	24,078
Marketable securities — available-for-sale		—		29,445		—		29,445
Total	$	24,078	$	29,445	$	—	$	53,523
Financial Liability
Preferred stock warrant liability	$	—	$	—	$	2,961	$	2,961

The change in the value of the preferred stock warrant liability is summarized below (in thousands):

Fair value at December 31, 2010	$	2,961
Change in fair value recorded as a loss from change in fair value of warrant liabilities		3,637
Conversion of preferred stock warrants to common stock or common stock warrants		(6,598	)
Fair value at September 30, 2011	$	—

The Company had no transactions measured at fair value on a nonrecurring basis as of September 30, 2011 and December 31, 2010.

Prior to the Company's initial public offering, outstanding warrants to purchase shares of the Company's Series A and Series B redeemable convertible preferred stock were freestanding warrants that were exercisable into convertible preferred stock that was subject to redemption and were therefore classified as liabilities on the condensed consolidated balance sheet at fair value. The estimated fair value of the warrant liabilities were revalued at each balance sheet date, with changes in value recorded as other income or expense in the condensed consolidated statements of operations. Upon the closing of the Company's initial public offering on June 2, 2011, the Series A and Series B redeemable preferred stock warrants that were previously recorded as liabilities on the Company's consolidated balance sheet were automatically converted to common stock warrants or common stock. Upon this conversion, the related preferred stock warrant liability of $6.6 million was reclassified to additional paid-in capital and will no longer be adjusted to fair value.