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Fair Value Measurements
 6 Months Ended
Jun. 30, 2012
Fair Value Measurements [Abstract]  
Fair Value Measurements

Note 6. Fair Value Measurements

The Company discloses its cash and short term investments under a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, 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 summarizes the valuation of the Company’s financial instruments that were determined by using the following inputs as of June 30, 2012 and December 31, 2011 (in thousands):

 

                                                                 
    June 30, 2012     December 31, 2011  
    Level 1     Level 2     Level 3     Total     Level 1     Level 2     Level 3     Total  

Operating cash

   $ 184     $ —       $ —       $ 184     $ 53     $ —       $ —       $ 53  

Money market funds

     6,330       —         —         6,330       3,855       —         —         3,855  

Government sponsored enterprise

     —         15,188       —         15,188       —         23,901       —         23,901  

U.S. Treasury securities

     —         —         —         —         —         6,500       —         6,500  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    $ 6,514     $ 15,188     $ —       $ 21,702     $ 3,908     $ 30,401     $ —       $ 34,309  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                 

Reported as:

                                                                

Cash and cash equivalents

                           $ 6,514                             $ 9,148  

Short term investments

                             15,188                               25,161  
                           

 

 

                            

 

 

  
                            $ 21,702                             $ 34,309  
                           

 

 

                            

 

 

  

The Level 2 assets are valued using quoted market prices for similar instruments.

In addition to Level 1 and Level 2 assets held by the Company at June 30, 2012, the Company measures its contingent put option liability related to the loan agreement with Hercules Technology Growth Capital, Inc. (“Hercules”) (see Note 8), utilizing Level 3 measurements. The fair value of the contingent put option of $0.1 million was determined by evaluating multiple potential outcomes of an event of default, including a change of control, using an income approach and discounting the values back to June 30, 2012.