Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements And Marketable Securities

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Fair Value Measurements And Marketable Securities
 9 Months Ended
Sep. 30, 2011
Fair Value Measurements And Marketable Securities [Abstract]  
Fair Value Measurements And Marketable Securities

NOTE 5 — FAIR VALUE MEASUREMENTS AND MARKETABLE SECURITIES

The Company accounts for its marketable securities in accordance with ASC 820"Fair Value Measurements and Disclosures." ASC 820 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

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

Level 2—Observable inputs other than Level 1 prices 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. The Company's short-term investments primarily utilize broker quotes in a non-active market for valuation of these securities.

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 utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following table sets forth the Company's financial assets (cash equivalents and marketable securities) at fair value on a recurring basis as of September 30, 2011 and December 31, 2010:

 

(in thousands)

    Fair Value as of
September 30,
2011 		     Basis of Fair Value Measurements  
      Level 1      Level 2      Level 3  

Money market funds

    $ 3,502       $ 3,502       $ —         $ —     

Certificates of deposit

      —           —           —           —     

Corporate bonds

      6,793         —           6,793         —     

U.S.Government securities

      8,690         —           8,690         —     

Commercial paper

      6,177         —           6,177         —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total cash equivalents and marketable securities

    $ 25,162       $ 3,502       $ 21,660       $ —     
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(in thousands)

    Fair Value as of
December 31,
2010		      Basis of Fair Value Measurements  
      Level 1      Level 2      Level 3  

Money market funds

    $ 4,627       $ 4,627       $ —         $ —     

Certificates of deposit

      245         —           245         —     

Corporate bonds

      1,663         —           1,663         —     

U.S.Government securities

      3,202         —           3,202         —     

Commercial paper

      4,865         —           4,865         —     
  

 

 

     

 

 

     

 

 

     

 

 

  

Total cash equivalents and marketable securities

    $ 14,602       $ 4,627       $ 9,975       $ —     
  

 

 

     

 

 

     

 

 

     

 

 

  

The Company invests in highly-liquid, investment-grade securities. The following is a summary of the Company's available-for-sale securities at September 30, 2011 and December 31, 2010:

 

As of September 30, 2011 (in thousands):    Cost Basis     Unrealized
Gain		      Unrealized
Loss		     Fair
Value		  

Money market funds

    $ 3,502      $ —         $ —        $ 3,502   

Certificates of deposit

      —          —           —          —     

Corporate bonds

      6,803        —           (10 )      6,793   

U.S. Government securities

      8,689        2         (1 )      8,690   

Commercial paper

      6,177        —           —          6,177   
  

 

 

    

 

 

     

 

 

    

 

 

  
     25,171        2         (11 )      25,162   

Less cash equivalents

      (5,951 )      —           —          (5,951 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Total marketable securities

    $ 19,220      $ 2       $ (11 )    $ 19,211   
  

 

 

    

 

 

     

 

 

    

 

 

  
As of December 31, 2010 (in thousands):    Cost Basis     Unrealized
Gain		      Unrealized
Loss		     Fair
Value		  

Money market funds

    $ 4,627      $ —         $ —        $ 4,627   

Certificates of deposit

      245        —           —          245   

Corporate bonds

      1,662        1         —          1,663   

U.S. Government securities

      3,202        —           —          3,202   

Commercial paper

      4,865        —           —          4,865   
  

 

 

    

 

 

     

 

 

    

 

 

  
     14,601        1         —          14,602   

Less cash equivalents

      (8,594 )      —           —          (8,594 ) 
  

 

 

    

 

 

     

 

 

    

 

 

  

Total marketable securities

    $ 6,007      $ 1       $ —        $ 6,008   
  

 

 

    

 

 

     

 

 

    

 

 

  

There were no realized gains or losses in the nine months ended September 30, 2011 and 2010.

As of September 30, 2011, weighted average days to maturity for the Company's available for sale securities was 110 days, with the longest maturity being June 2012.

 

The following table provides the breakdown of the marketable securities with unrealized losses at September 30, 2011 (in thousands):

 

     In loss position for less than
twelve months		  
As of September 30, 2011 (in thousands):    Fair Value      Unrealized Loss  

Corporate bonds

    $ 6,793       $ (10 ) 

U.S. Government securities

      2,218         (1 ) 

Total marketable securities

    $ 9,011       $ (11 ) 
  

 

 

     

 

 

  

The Company determined the fair value of the liability associated with its warrants to purchase 16.6 million shares of outstanding common stock using a Black-Scholes Model. See detailed discussion in Note 3— Stockholders' Equity.