Note 4 - Current and Non-Current Investments

9 Months Ended

Sep. 30, 2013

4. Current and Non-Current Investments

At September 30, 2013 and December 31, 2012, current and non-current available-for-sale investments consisted of the following securities:

	September 30, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Current:
U.S. government securities	$	999	$	1	$	-		$	1,000
U.S. government agencies		9,069		8					9,077
Certificates of deposits		1,750		-		-			1,750
Corporate bonds		1,262		-		(1	)		1,261
Variable rate demand notes		2,175		-		-			2,175
Total	$	15,255	$	9	$	(1	)	$	15,263

Non-current:
U.S. government agencies	$	3,010	$	-	$	(1	)	$	3,009
Certificates of deposits		4,250		-		-			4,250
Total	$	7,260	$	-	$	(1	)	$	7,259

	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Current:
U.S. commercial paper	$	2,499	$	-	$	-		$	2,499
Municipal securities		251		-		-			251
Certificates of deposits		500		-		-			500
Variable rate demand notes		2,785		-		-			2,785
Total	$	6,035	$	-	$	-		$	6,035

Non-current:
U.S. government securities	$	10,131	$	2	$	(3	)	$	10,130
Certificates of deposits		3,000		-		-			3,000
Corporate bonds		1,281		-		(3	)		1,278
Total	$	14,412	$	2	$	(6	)	$	14,408

The Company performs fair value measurements in accordance with the Financial Accounting Standards Board’s guidance for fair value measurements and disclosures, which defines fair value as the exchange price that would be received for selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company classifies its investments into the following categories based on the three levels of inputs used to measure fair value:

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 in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities 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; or

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 Company’s assets measured at fair value on a recurring basis, including cash equivalents, which are subject to the fair value disclosure requirements, at September 30, 2013 and December 31, 2012 are as follows:

	Fair Value Measurements at Reporting Date Using
September 30, 2013 (In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
U.S. government securities	$	-	$	1,000	$	-	$	1,000
U.S. government agencies		-		12,084				12,084
U.S. commercial paper		-		6,299		-		6,299
Certificates of deposits		-		6,000		-		6,000
Corporate bonds		-		4,012		-		4,012
Money market funds		6,012		5,115		-		11,127
Variable rate demand notes		-		2,175		-		2,175
Total assets measured at fair value	$	6,012	$	36,685	$	-	$	42,697

	Fair Value Measurements at Reporting Date Using
December 31, 2012 (In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
U.S. government securities	$	-	$	10,130	$	-	$	10,130
U.S. commercial paper		-		5,998		-		5,998
Municipal securities		-		1,253		-		1,253
Certificates of deposits		-		3,500		-		3,500
Corporate bonds		-		6,286		-		6,286
Money market funds		16,274		-		-		16,274
Variable rate demand notes		-		2,785		-		2,785
Total assets measured at fair value	$	16,274	$	29,952	$	-	$	46,226

If quoted prices in active markets for identical assets and liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. This pricing methodology applies to the Company’s Level 2 investments.