The Company’s cash equivalents and marketable securities at September 30, 2019 and March 31, 2019 are classified on the balance sheet as follows:

	September 30, 2019		March 31, 2019
	(in $000's)
Cash equivalents	$	73,694	$	80,089
Short-term marketable securities		295,041		370,677
Long-term marketable securities		106,025		21,718
	$	474,760	$	472,484

The Company’s cash equivalents and marketable securities at September 30, 2019 and March 31, 2019 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
September 30, 2019:	(in $000's)
Money market funds	$	53,694	$	—	$	—		$	53,694
Repurchase agreements		20,000		—		—			20,000
Short-term U.S. Treasury mutual fund securities		28,012		39		—			28,051
Short-term government-backed securities		124,117		129		(24	)		124,222
Short-term corporate debt securities		92,865		183		—			93,048
Short-term commercial paper		49,230		29		(4	)		49,255
Long-term U.S. Treasury mutual fund securities		6,964		6		—			6,970
Long-term government-backed securities		43,898		28		(18	)		43,908
Long-term corporate debt securities		55,127		486		(1	)		55,612
	$	473,907	$	900	$	(47	)	$	474,760

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
March 31, 2019:	(in $000's)
Money market funds	$	60,089	$	—	$	—		$	60,089
Repurchase agreements		20,000		—		—			20,000
Short-term U.S. Treasury mutual fund securities		58,786		13		(12	)		58,787
Short-term government-backed securities		126,336		60		(15	)		126,381
Short-term corporate debt securities		128,626		97		(9	)		128,714
Short-term commercial paper		56,780		16		(1	)		56,795
Long-term corporate debt securities		21,529		189		—			21,718
	$	472,146	$	375	$	(37	)	$	472,484

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 1 primarily consists of financial instruments whose values are based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The following tables presents the Company’s fair value hierarchy for its financial instruments measured at fair value as of September 30, 2019 and March 31, 2019:

	Level 1		Level 2		Level 3		Total
September 30, 2019:	(in $000's)
Assets
Money market funds	$	53,694	$	—	$	—	$	53,694
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury mutual fund securities		—		28,051		—		28,051
Short-term government-backed securities		—		124,222		—		124,222
Short-term corporate debt securities		—		93,048		—		93,048
Short-term commercial paper		—		49,255		—		49,255
Long-term U.S. Treasury mutual fund securities				6,970		—		6,970
Long-term government-backed securities		—		43,908		—		43,908
Long-term corporate debt securities		—		55,612		—		55,612
Investment in Shockwave Medical		50,248		—		—		50,248
Liabilities
Contingent consideration		—		—		10,236		10,236

	Level 1		Level 2		Level 3		Total
March 31, 2019:	(in $000's)
Assets
Money market funds	$	60,089	$	—	$	—	$	60,089
Repurchase agreements		—		20,000		—		20,000
Short-term U.S. Treasury mutual fund securities		—		58,787		—		58,787
Short-term government-backed securities		—		126,381		—		126,381
Short-term corporate debt securities		—		128,714		—		128,714
Short-term commercial paper		—		56,795		—		56,795
Long-term corporate debt securities		—		21,718		—		21,718
Investment in Shockwave Medical		56,195		—		—		56,195
Liabilities
Contingent consideration		—		—		9,575		9,575

The Company has determined that the estimated fair value of its money market funds and its investment in Shockwave Medical, a publicly traded medical device company, are reported as Level 1 financial assets as they are valued at quoted market prices in active markets. The investment in Shockwave Medical is classified within other assets in the consolidated balance sheet.

The Company has determined that the estimated fair value of its repurchase agreements, U.S. Treasury mutual fund securities, government-backed securities, corporate debt securities and commercial paper are reported as Level 2 financial assets as they are based on model-driven valuations in which all significant inputs are observable, or can be derived from or corroborated by observable market data for substantially the full term of the asset.

The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH, or ECP, and AIS GmbH Aachen Innovative Solutions, or AIS, in July 2014. The Company acquired ECP and AIS for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of CE Mark approval in the European Union and a revenue-based milestone related to the development of the future Impella ECP^TM expandable catheter pump technology. These potential milestone payments may be made, at the Company’s option, by a combination of cash or Company common stock. As of September 30, 2019, the Company used a combination of an income approach, based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn out itself, the related projections, and the overall business. The revenue-based milestone is valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans.

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

Milestone Payment

Fair Value at

September 30, 2019

Valuation Methodology

Significant Unobservable Input

Weighted Average (range, if applicable)

(in $000's)

Clinical and regulatory milestone

7,000

5,544

Probability weighted income approach

Projected fiscal year of milestone payments

2021 to 2023

Discount rate

3.1% to 3.3%

Probability of occurrence

Probability adjusted level of 45% for the base case scenario and 15% to 40% for various downside and upside scenarios

Revenue-based milestone

8,000

4,692

Monte Carlo simulation model

Projected fiscal year of milestone payments

2025 to 2035

Discount rate

17%

Expected volatility for forecasted revenues

50%

Probability of payment (risk-neutral)

73%

15,000

10,236

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and six months ended September 30, 2019 and 2018:

	For the Three Months Ended September 30,				For the Six Months Ended September 30,
		2019		2018		2019		2018
	(in $000's)
Beginning balance	$	9,931	$	10,331	$	9,575	$	10,490
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		305		162		661		3
Ending balance	$	10,236	$	10,493	$	10,236	$	10,493

The change in fair value of the contingent consideration was primarily due to estimates related to development timelines and the passage of time on the fair value measurement of milestones. Adjustments associated with the change in fair value of contingent consideration are included in research and development expenses in the Company’s consolidated statements of operations. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value reflected in the Company’s consolidated statement of operations. There is no assurance that any of the conditions for the milestone payments will be met.