Financial Instruments

6 Months Ended

Jun. 30, 2014

2. Financial Instruments

The following is a summary of the Company’s financial instruments measured at fair value (in thousands):



June 30, 2014	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	892	$	--	$	--	$	892
U.S. Treasury debt securities		22,000		--		--		22,000
Restricted securities:
Money market funds		973		--		--		973
Total assets	$	23,865	$	--	$	--	$	23,865
Long-term liabilities:
Contingent consideration	$	--	$	--	$	(1,588)	$	(1,588)
Total liabilities	$	--	$	--	$	(1,588)	$	(1,588)


December 31, 2013	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	5,349	$	--	$	--	$	5,349
Certificates of deposit		749		--		--		749
Restricted securities:
Money market funds		350		--		--		350
Total assets	$	6,448	$	--	$	--	$	6,448
Long-term liabilities:
Contingent consideration	$	--	$	--	$	(1,884)	$	(1,884)
Total liabilities	$	--	$	--	$	(1,884)	$	(1,884)

The Company used prices quoted from its investment management companies to determine the Level 1 valuation of its investments in money market funds, U.S. Treasury debt securities, and certificates of deposit. The Company recorded a contingent consideration liability, classified as Level 3, as a result of its acquisition of Hemosphere, Inc. (“Hemosphere”) in May 2012. Refer to Note 5 for further discussion of the Level 3 contingent consideration liability.

Changes in fair value of Level 3 liabilities are listed below (in thousands):


	Contingent Consideration
Balance as of December 31, 2013	$	1,884
Gain on remeasurement of contingent consideration		(296)
Balance as of June 30, 2014	$	1,588

- 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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