Estimated Fair Value of Financial Instruments

9 Months Ended

Mar. 31, 2016

Estimated Fair Value of Financial Instruments [Abstract]

Estimated Fair Value of Financial Instruments

5.Estimated Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses, and Convertible Senior Notes. The carrying amount of accounts receivable, accounts payable and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of those instruments as of March 31, 2016 and June 30, 2015.

The Company has categorized its other financial instruments, based on the priority of the inputs to the valuation technique, into a three-level fair value hierarchy as set forth below. If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

Financial instruments recorded on the condensed consolidated balance sheets as of March 31, 2016 and June 30, 2015 are categorized based on the inputs to the valuation techniques as follows (in thousands):

· Level 1 – Financial instruments whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market which the company has the ability to access at the measurement date (examples include active exchange-traded equity securities and most U.S. Government and agency securities).

· Level 2 – Financial instruments whose value are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

· Level 3 – Financial instruments whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset.

Cash equivalents and marketable securities:

	($ in thousands)
March 31, 2016	Level 1		Level 2		Level 3		Total
Money Market Funds	$	8,659	$	—	$	—	$	8,659
Marketable Securities:
U.S. Treasury Bonds		6,951		—		—		6,951
Certificate of Deposits		4,253		—		—		4,253
U.S. Government Sponsored Agencies		22,259		—		—		22,259
Corporate Debt Securities		16,907		—		—		16,907
Total	$	59,029	$	—	$	—	$	59,029

	($ in thousands)
June 30, 2015	Level 1		Level 2		Level 3		Total
Money Market Funds	$	10,138	$	—	$	—	$	10,138
Marketable Securities:
U.S. Treasury Bonds		13,389		—		—		13,389
Certificate of Deposits		6,004		—		—		6,004
U.S. Government Sponsored Agencies		40,715		—		—		40,715
Corporate Debt Securities		26,058		—		—		26,058
Total	$	96,304	$	—	$	—	$	96,304

The money market funds noted above are included in cash and cash equivalents.

Convertible Senior Notes

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows (in thousands):

	As of March 31, 2016				As of June 30, 2015
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
Convertible Senior Notes	$	97,172	$	76,223	$	96,625	$	103,800

The fair value of the Convertible Senior Notes, which differs from their carrying values, is influenced by interest rates, the Company’s stock price and stock price volatility and is determined by prices for the Convertible Senior Notes observed in market trading which are Level 2 inputs.