Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 4 – Fair Value Measurements

Fair value is defined as the exchange price that would be received for 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.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.  The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, as follows:

· Level 1 – Quoted prices in active markets for identical assets and liabilities.

· Level 2 – Inputs other than 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.

Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are categorized in the table below as of December 31, 2011 and 2010:

	Fair Value		Fair value measurement using
(in thousands)	December 31, 2011		Level 1		Level 2		Level 3
Assets:
Money markets	$	9,377	$	9,377	$	–	$	–
Certificate of deposit		400		400		–		–
Total Assets	$	9,777	$	9,777	$	–	$	–
Liabilities:
Common stock warrant liability	$	6,996	$	$ –	$	–	$	6,996

	Fair Value		Fair value measurement using
(in thousands)	December 31, 2010		Level 1		Level 2		Level 3
Assets:
Money markets	$	9,690	$	9,690	$	–	$	–
Certificate of deposit		600		600		–		–
Total Assets	$	10,290	$	10,290	$	–	$	–
Liabilities:
Common stock warrant liability	$	2,469	$	$ –	$	–	$	2,469

The following table summarizes the activity of Level 3 inputs measured on a recurring basis for the year ended December 31, 2011:

(in thousands)

	Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs
	(Level 3)
Balance at December 31, 2010	$	2,469
Issuance of common stock warrants		8,087
Change in fair value of common stock warrant liability		(3,560	)
Balance at December 31, 2011	$	6,996