Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

The Company determines the fair value of its cash equivalents and marketable securities based on one or more valuations from its investment accounting and reporting service provider. The investment service provider values the securities using a hierarchical security pricing model that relies primarily on valuations provided by an industry-recognized valuation service. Such valuations may be based on trade prices in active markets for identical assets (Level 1 inputs) or valuation models using inputs that are observable either directly or indirectly (Level 2 inputs), such as quoted prices for similar assets, yield curves, volatility factors, credit spreads, default rates, loss severity, current market and contractual prices for the underlying instruments or debt, and broker and dealer quotes, as well as other relevant economic measures.

As of December 31, 2020, cash equivalents and marketable securities measured at fair value were as follows (in thousands):

			Fair Value Measurements Using
As of December 31, 2020	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents:
Negotiable certificates of deposit	$	720	$	—	$	720	$	—
Marketable securities:
Corporate debt securities		6,679		—		6,679		—
Total	$	7,399	$	—	$	7,399	$	—

As of December 31, 2019, the Company had no cash equivalents or marketable securities measured at fair value.

Prior to completion of the IPO in June 2020, the Company had an outstanding warrant to purchase shares of its Series A convertible preferred stock. Since the underlying Series A convertible preferred stock was classified outside of permanent equity, the preferred stock warrant was classified as other long-term liabilities in the accompanying balance sheet. The preferred stock warrant liability was recorded at fair value utilizing the Black-Scholes model using significant unobservable inputs adjusted for the preferred stock warrant’s expected life and the fair value of the underlying convertible preferred stock. The Company adjusted the carrying value of the preferred stock warrant to its estimated fair value at each reporting date, with any related increase or decrease in the fair value recorded as an increase or decrease to other income (expense) in the statements of operations and comprehensive loss. In connection with the IPO, the preferred stock warrant was adjusted to become a warrant to purchase shares of the Company’s common stock and met the criteria to be classified within stockholders’ equity. Accordingly, the fair value of the warrant liability was reclassified to stockholders’ equity.

The following table provides a reconciliation of the preferred stock warrant liability measured at fair value using Level 3 unobservable inputs (in thousands):

Balance at December 31, 2017 and 2018	$	30
Change in fair value		15
Balance at December 31, 2019		45
Change in fair value		75
Reclassification of warrant liability    to stockholders’ equity		(120	)
Balance at December 31, 2020	$	—