Enom 2010 Annual Report Download - page 117

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
2. Summary of Significant Accounting Policies (Continued)
Financial assets and liabilities carried at fair value on a recurring basis were as follows:
December 31, 2009
Level 1 Level 2 Level 3 Total
Assets
Cash equivalents(1) $ — $ 31,861 $ — $ 31,861
Corporate obligations(2) — 800 — 800
Total assets at fair value $ — $ 32,661 $ — $ 32,661
Liabilities
Series C preferred stock warrants(3) — — 225 225
Total liabilities at fair value $ — $ — $ 225 $ 225
December 31, 2010
Level 1 Level 2 Level 3 Total
Assets
Cash equivalents(1) $ — $ 18,702 $ — $ 18,702
Total assets at fair value $ — $ 18,702 $ — $ 18,702
Liabilities
Series C preferred stock warrants(3) — — 477 477
Total liabilities at fair value $ — $ — $ 477 $ 477
comprises money market funds which are included in Cash and cash equivalents in the accompanying balance sheet
included in Marketable securities in the accompanying balance sheet
included in Other liabilities in the accompanying balance sheet
(1)
(2)
(3)
The Company chose not to elect the fair value option for its financial assets and liabilities that had not been previously carried at fair value. Therefore,
material financial assets and liabilities not carried at fair value, such as the revolving line of credit and trade accounts receivable and payables, are reported at
their carrying values.
For financial assets that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including quoted
market prices (Level 1 inputs) or inputs that are derived principally from or corroborated by observable market data (Level 2 inputs). The fair value of the
Company's Series C preferred stock warrants (Note 16) was classified as a Level 3 instrument, as it uses unobservable inputs and requires management
judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments.
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