Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
6 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

3. Fair Value Measurements

Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be 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. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

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.

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.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Where quoted prices for identical securities are available in an active market, securities are classified as Level 1 of the valuation hierarchy, including cash held at overnight sweep accounts. The Company’s Level 2 valuations of marketable securities are generally derived from independent pricing services based upon quoted prices in active markets for similar securities, with prices adjusted for yield and number of days to maturity, or based on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets.

In certain cases, where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy. The Company does not have any assets or liabilities measured using Level 3 inputs as of June 30, 2018 or December 31, 2017.

As of June 30, 2018 and December 31, 2017, financial assets and liabilities measured and recognized at fair value on a recurring basis and classified under the appropriate level of the fair value hierarchy as described above were as follows (in thousands):

 

 

 

June 30, 2018

 

 

 

Amortized Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

5,497

 

 

 

 

 

 

 

 

 

5,497

 

Money market funds

 

 

89,793

 

 

 

 

 

 

 

 

 

89,793

 

U.S. Treasury securities

 

 

16,414

 

 

 

 

 

 

(2

)

 

 

16,412

 

Subtotal

 

 

111,704

 

 

 

 

 

 

(2

)

 

 

111,702

 

Level 2:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

6,682

 

 

 

1

 

 

 

 

 

 

6,683

 

Subtotal

 

 

6,682

 

 

 

1

 

 

 

 

 

 

6,683

 

Total

 

$

118,386

 

 

$

1

 

 

$

(2

)

 

$

118,385

 

Reported as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

101,973

 

Marketable securities

 

 

 

 

 

 

 

 

 

 

 

 

 

$

16,412

 

 

 

 

December 31, 2017

 

 

 

Amortized Cost

 

 

Unrealized

Gains

 

 

Unrealized

Losses

 

 

Fair Value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

804

 

 

 

 

 

 

 

 

 

804

 

Money market funds

 

 

50,229

 

 

 

 

 

 

 

 

 

50,229

 

Restricted cash

 

 

13

 

 

 

 

 

 

 

 

 

13

 

Subtotal

 

 

51,046

 

 

 

 

 

 

 

 

 

51,046

 

Total

 

$

51,046

 

 

$

 

 

$

 

 

$

51,046

 

Reported as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

$

51,033

 

Restricted cash

 

 

 

 

 

 

 

 

 

 

 

 

 

$

13

 

 

Where quoted prices are available in an active market, securities are classified as Level 1. The Company classifies money market funds as Level 1. When quoted market prices are not available for the specific security, then the Company estimates fair value by using benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. There were no transfers between Level 1 and Level 2 during the periods presented.

As of June 30, 2018, the amortized cost and estimated fair value of the Company’s available-for-sale securities by contractual maturity are shown below (in thousands):

 

 

 

Amortized

 

 

Estimated

 

 

 

Cost

 

 

Fair Value

 

Marketable securities maturing:

 

 

 

 

 

 

 

 

In one year or less

 

$

16,414

 

 

$

16,412

 

Total marketable securities

 

$

16,414

 

 

$

16,412

 

 

The Company determined that the gross unrealized losses on its marketable securities as of June 30, 2018 were temporary in nature. The Company currently does not intend to sell these securities prior to maturity and does not consider these investments to be other-than-temporarily impaired at June 30, 2018. There were no sales of available-for-sale securities in any of the periods presented.