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S-1
VITAE PHARMACEUTICALS, INC filed this Form S-1 on 08/12/2014
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Vitae Pharmaceuticals, Inc.

Notes to Unaudited Condensed Financial Statements (Continued)

As of June 30, 2014 and December 31, 2013 and
for the Six Months Ended June 30, 2014 and 2013

5. Fair Value Measurements (Continued)

measurement. The Company accounts for its convertible preferred stock warrants as liabilities in accordance with the guidance for accounting for certain financial instruments with characteristics of both liabilities and equity as the warrants entitle the holder to purchase preferred stock that is considered contingently redeemable. The warrant liability is recorded on its own line item on the Company's Condensed Balance Sheets. The warrant liability is marked-to-market each reporting period with the change in fair value recorded in the Condensed Statement of Operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument. The estimated fair value of the preferred stock warrants decreased $175,750 for the six months ended June 30, 2014.

        The table below sets forth a summary of changes in fair value of the Company's Level 3 financial instruments measured on a recurring basis:

 
  Preferred Stock
Warrant
Liability
 

Balance as of January 1, 2013

  $ 720,375  

Amounts acquired or issued

     

Transfers in and/or out of Level 3

     

Changes in estimated fair value

    (219,500 )
       

Balance as of June 30, 2013

  $ 500,875  
       
       

Balance as of January 1, 2014

  $ 477,375  

Amounts acquired or issued

     

Transfers in and/or out of Level 3

     

Changes in estimated fair value

    (175,750 )
       

Balance as of June 30, 2014

  $ 301,625  
       
       

6. Investments

Marketable Securities

        Marketable securities consisted of the following as of June 30, 2014 and December 31, 2013:

 
  Cost Basis   Unrealized Gains   Unrealized Losses   Fair Value  

June 30, 2014

                         

Corporate notes and bonds

  $ 9,422,624   $ 511   $ (777 ) $ 9,422,358  
                   

Total marketable securities

  $ 9,422,624   $ 511   $ (777 ) $ 9,422,358  
                   
                   

December 31, 2013

                         

U.S. government and agency

  $ 500,066   $ 64   $   $ 500,130  

Corporate notes and bonds

    10,799,073     1,964     (1,961 )   10,799,076  
                   

Total marketable securities

  $ 11,299,139   $ 2,028   $ (1,961 ) $ 11,299,206  
                   
                   

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