Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial instruments recorded at fair value on the Company’s Consolidated Balance Sheets are categorized as follows:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Include other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The following table provides the carrying value and fair value of certain financial assets and liabilities of the Company measured at fair value on a recurring basis as of September 30, 2019 and December 31, 2018:

	Carrying Value		Fair Value Measurement at September 30, 2019
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	45,039	$	45,039	$	—	$	—
Restricted cash	$	525	$	525	$	—	$	—
Marketable securities—held-to-maturity:
U.S. Government securities	$	—	$	—	$	—	$	—

	Carrying Value		Fair Value Measurement at December 31, 2018
			Level 1		Level 2		Level 3
	(Unaudited - In thousands)
Cash and cash equivalents	$	7,703	$	7,703	$	—	$	—
Restricted cash equivalents	$	500	$	500	$	—	$	—
Marketable securities—held-to-maturity:
U.S. Government securities	$	37,955	$	37,955	$	—	$	—
Credit facility repayment feature liability	$	5,060	$	—	$	—	$	5,060

Held-to-maturity securities are carried at amortized cost, which, due to the short-term maturity of these instruments, approximates fair value using quoted prices in active markets for identical assets or liabilities defined as Level 1 inputs under the fair value hierarchy. As of December 31, 2018, $5.1 million was recorded as a credit facility repayment feature liability due to the provision in the Credit Facility that required prepayments of outstanding principal amounts when the Company’s qualified cash at any quarter end date exceeded $50.0 million. The prepayment feature was an embedded derivative that was accounted for as a liability separate from the Credit Facility. The liability was adjusted to zero upon repayment of the Credit Facility, which occurred in July 2019. Management's cash forecasts are defined as Level 3 inputs under the fair value hierarchy.