Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

Note 4. Fair Value of Financial Instruments

The carrying value of the Company’s cash, cash equivalents, accounts receivable, accounts payable, accrued liabilities, and other current liabilities approximate fair value based on the short-term maturities of these instruments. The carrying value of the Company’s notes receivable also approximates fair value based on the associated credit risk.

The Company classifies money market funds, U.S. treasury bills, certificates of deposit, and U.S. government securities as Level 1 within the fair value hierarchy as the fair value is based on quoted prices. The Company classifies U.S. government agency bonds as Level 2 within the fair value hierarchy as the fair value is based upon quoted market prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. The Company classifies its warrant derivative liabilities as Level 3 within the fair value hierarchy as the Company estimates the fair value of the warrant liabilities using

recently quoted market prices of the Company's common stock and the Black-Scholes option pricing model, refer to Note 9, Warrant Liabilities.

The following table sets forth by level, within the fair value hierarchy, the Company's assets and liabilities at fair value as of March 31, 2024 and December 31, 2023:


	March 31, 2024
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	10,115	$	—	$	—	$	10,115
U.S. treasury bills		2,973	—		—			2,973
Certificates of deposit		1,226	—		—			1,226
U.S. government securities		489	—		—			489
U.S. government agency bonds	—			500	—			500
Total assets	$	14,803	$	500	$	—	$	15,303

Liabilities
Warrant derivative liabilities	$	—	$	—	$	7,962	$	7,962
Total liabilities	$	—	$	—	$	7,962	$	7,962

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	11,171	$	—	$	—	$	11,171
U.S. treasury bills		5,942	—		—			5,942
Certificates of deposit		983	—		—			983
Total assets	$	18,096	$	—	$	—	$	18,096

Liabilities
Warrant derivative liabilities	$	—	$	—	$	8,457	$	8,457
Total liabilities	$	—	$	—	$	8,457	$	8,457

There were no assets or liabilities measured at fair value as of March 31, 2023. There were no transfers between fair value hierarchy levels during three months ended March 31, 2024.

The fair value of the Company’s financial assets that are measured at fair value on a recurring basis as of March 31, 2024 are as follows:


	March 31, 2024
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents
Money market funds	$	10,115	$	—	$	—		$	10,115
Short-term investments
U.S. treasury bills		2,974		—		(1	)		2,973
Certificates of deposit		490		—		—			490
U.S. government securities		490		—		(1	)		489
Long-term investments
Certificates of deposit		735		1		—			736
U.S. government agency bonds		500		—		—			500
Total	$	15,304	$	1	$	(2	)	$	15,303

	December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Cash equivalents
Money market funds	$	11,171	$	—	$	—		$	11,171
U.S. treasury bills		2,989		1		—			2,990
Short-term investments
U.S. treasury bills		2,952		—		—			2,952
Certificates of deposit		490		1		—			491
Long-term investments
Certificates of deposit		490		2		—			492
Total	$	18,092	$	4	$	—		$	18,096

The change in fair value of warrant liabilities measured on a recurring basis using unobservable Level 3 inputs for the period ended March 31, 2024 is set forth below:


	Fair Value at December 31, 2023		Change in Fair Value			Fair Value at March 31, 2024
Series A Warrant	$	4,462	$	(248	)	$	4,214
Series B Warrant		3,995		(247	)		3,748
Total warrant liabilities	$	8,457	$	(495	)	$	7,962

- 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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