Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2016

Note 2: Fair Value of Financial Instruments

The estimated fair values of financial instruments outstanding were (in thousands):


	September 30, 2016
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	10,008	$	—	$	—	$	10,008
Short-term investments:
U.S. government-sponsored enterprise bonds	$	500	$	—	$	—	$	500
Corporate notes		2,251		—		(1)		2,250
Total short-term investments	$	2,751	$	—	$	(1)	$	2,750


	December 31, 2015
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
Cash and cash equivalents	$	5,640	$	—	$	—	$	5,640
Short-term investments:
U.S. government-sponsored enterprise bonds	$	6,243	$	—	$	—	$	6,243
Municipal bonds		200		—		—		200
Corporate notes		8,171		—		(16)		8,155
Total short-term investments	$	14,614	$	—	$	(16)	$	14,598

As of September 30, 2016, unrealized losses on available for sale securities were insignificant. As of December 31, 2015 the estimated fair values of available-for-sale securities with unrealized losses were (in thousands):


	December 31, 2015
			Unrealized
	Cost		Losses		Fair Value
Short-term investments:
Corporate notes	$	8,171	$	(16)	$	8,155
Total short-term investments	$	8,171	$	(16)	$	8,155

As of December 31, 2015, substantially all of the available-for-sale securities with unrealized losses had been in a loss position for less than 12 months.

The following table represents the Company’s fair value hierarchy for its financial assets (cash equivalents and investments) as of September 30, 2016 and December 31, 2015 (in thousands):


	September 30, 2016
	Fair Value		Level 1		Level 2		Level 3
Money market funds	$	3,203	$	3,203	$	—	$	—
U.S. government-sponsored enterprise bonds		2,900		—		2,900		—
Corporate notes		5,000		—		5,000		—
Total assets	$	11,103	$	3,203	$	7,900	$	—


	December 31, 2015
	Fair Value		Level 1		Level 2		Level 3
Money market funds	$	2,238	$	2,238	$	—	$	—
U.S. government-sponsored enterprise bonds		7,525		—		7,525		—
Municipal bonds		200		—		200		—
Corporate notes		8,255		—		8,255		—
Certificates of deposit		240		—		240		—
Total assets	$	18,458	$	2,238	$	16,220	$	—

There were no transfers in or out of Level 1 and Level 2 securities during the three or nine months ended September 30, 2016 and 2015.

- 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.

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