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Fair Value Measurement
9 Months Ended
Sep. 30, 2011
Fair Value Measurement [Abstract] 
Fair Value Measurement

Note 3. Fair Value Measurement

The following tables present our assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.

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

Level 2 — Directly or indirectly observable inputs other than in Level 1, that include quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3 — Unobservable inputs which are supported by little or no market activity that reflects the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

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.

Our cash equivalents, marketable securities, bonds payable and warrant liability are classified within Level 1 or Level 2. This is because our cash equivalents and marketable securities are valued primarily using quoted market prices, our bonds payable are valued using alternative pricing sources and models utilizing market observable inputs and our warrant liability is valued using an option pricing model that uses assumptions with observable inputs such as risk-free interest rates that are derived from the yield on U.S. Treasury debt securities, volatility and price based on our common stock as traded on NASDAQ.

We currently do not have any Level 3 financial assets or liabilities.

The following table presents financial assets and liabilities measured at fair value:

 

                         
    Fair Value Measurement
at Reporting Date Using		        
    Quoted Prices
in Active  Markets
For
Identical Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     As of
September 30,
2011		  

Financial assets Cash equivalents:

                        

Money market funds

   $ 6,467,888     $ —       $ 6,467,888  

Marketable securities: Debt securities

     5,240,400       —         5,240,400  
   

 

 

    

 

 

    

 

 

  

Total financial assets

   $ 11,708,288     $ —       $ 11,708,288  
   

 

 

    

 

 

    

 

 

  

Financial liabilities Bond payable

   $ —       $ 568,750     $ 568,750  

Warrant liability

     —         171,551       171,551  
   

 

 

    

 

 

    

 

 

  

Total financial liabilities

   $ —       $ 740,301     $ 740,301