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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2018
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 6. FAIR VALUE MEASUREMENTS Assets and liabilities recorded at fair value in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. For certain of our financial instruments including amounts receivable and accounts payable the carrying values approximate fair value due to their short-term nature. ASC 820 “Fair Value Measurements and Disclosures” specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In accordance with ASC 820, these inputs are summarized in the three broad levels listed below:
| • | Level 1 – Quoted prices in active markets for identical securities.
| • | Level 2 – Other significant inputs that are observable through corroboration with market data (including quoted prices in active markets for similar securities).
| • | Level 3 – Significant unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability.
As quoted prices in active markets are not readily available for certain financial instruments, we obtain estimates for the fair value of financial instruments through third-party pricing service providers. In determining the appropriate levels, we performed a detailed analysis of the assets and liabilities that are subject to ASC 820. We invest our excess cash in accordance with investment guidelines that limit the credit exposure to any one financial institution other than securities issued by the U.S. Government. These securities are not collateralized and mature within one year. A description of the valuation techniques applied to our financial instruments measured at fair value on a recurring basis follows. Financial Instruments Cash Significant amounts of cash are held on deposit with large well-established U.S. and Canadian financial institutions. Money Market Securities Money market securities are classified within Level I of the fair value hierarchy and are valued based on quoted prices in active markets for identical securities. U.S. Government and Agency Securities U.S. Government Securities U.S. government securities are valued using quoted market prices. Valuation adjustments are not applied. Accordingly, U.S. government securities are categorized in Level 1 of the fair value hierarchy. U.S. Agency Securities U.S. agency securities are comprised of two main categories consisting of callable and non-callable agency issued debt securities. Non-callable agency issued debt securities are generally valued using quoted market prices. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. Actively traded non-callable agency issued debt securities are categorized in Level 1 of the fair value hierarchy. Callable agency issued debt securities are categorized in Level 2 of the fair value hierarchy. Corporate and Other Debt Corporate Bonds and Commercial Paper The fair value of corporate bonds and commercial paper is estimated using recently executed transactions, market price quotations (where observable), bond spreads or credit default swap spreads adjusted for any basis difference between cash and derivative instruments. The spread data used are for the same maturity as the bond. If the spread data does not reference the issuer, then data that reference a comparable issuer are used. When observable price quotations are not available, fair value is determined based on cash flow models with yield curves, bond or single name credit default swap spreads and recovery rates based on collateral values as significant inputs. Corporate bonds and commercial paper are generally categorized in Level 2 of the fair value hierarchy; in instances where prices, spreads or any of the other aforementioned key inputs are unobservable, they are categorized in Level 3 of the hierarchy. Warrants As of September 30, 2018, the fair value of the warrant liability was insignificant. We reassess the fair value of the common stock warrants classified as liabilities at each reporting date utilizing a Black-Scholes pricing model. Inputs used in the pricing model include estimates of stock price volatility, expected warrant life and risk-free interest rate. The computation of expected volatility was based on the historical volatility of comparable companies from a representative peer group selected based on industry and market capitalization for a period that coincides with the expected life of the warrants that are classified as liabilities. Warrants that are classified as liabilities are categorized in Level 3 of the fair value hierarchy. A small change in the estimates used may have a relatively large change in the estimated valuation. Warrants that are classified as equity are not considered liabilities and therefore are not reassessed for their fair values at each reporting date. The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value (in thousands):
September 30, 2018 |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 2,936 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,936 |
Money market securities (cash equivalents) |  |  | 8,819 |  |  |  | — |  |  |  | — |  |  |  | 8,819 |
Restricted cash (Note 6) |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | 50 |
Corporate bonds and commercial paper (short term investments) |  |  | — |  |  |  | 1,390 |  |  |  | — |  |  |  | 1,390 |
Total assets |  | $ | 11,805 |  |  | $ | 1,390 |  |  | $ | — |  |  | $ | 13,195 |
Cash, cash equivalents and short-term investments consist of the following (in thousands):
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated |
September 30, 2018 |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Cash |  | $ | 2,936 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,936 |
Money market securities |  |  | 8,819 |  |  |  | — |  |  |  | — |  |  |  | 8,819 |
Total cash and cash equivalents |  | $ | 11,755 |  |  | $ | — |  |  | $ | — |  |  | $ | 11,755 |
Money market securities (restricted cash) |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | 50 |
Total restricted cash |  | $ | 50 |  |  | $ | — |  |  | $ | — |  |  | $ | 50 |
Corporate bonds and commercial paper |  | $ | 1,390 |  |  |  | — |  |  |  | — |  |  | $ | 1,390 |
Total short-term investments |  | $ | 1,390 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,390 |
Our gross realized gains and losses on sales of available-for-sale securities were not material for the three and nine months ended September 30, 2018 and 2017. We only invest in A (or equivalent) rated securities. All securities included in cash and cash equivalents had maturities of 90 days or less at the time of purchase. All securities included in short-term investments have maturities of within one year of the balance sheet date. The cost of securities sold is based on the specific identification method.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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