FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS |
9 Months Ended |
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Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 15 - FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS
Fair Value Measurements
Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the measurement of fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date
Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for substantially the full term of the asset or liability
Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any market activity for the asset or liability at measurement date
As of September 30, 2022 and December, 31 2021, the fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximated their carrying values due to the short-term nature of these instruments.
Recurring Fair Value Measurements
For the nine months ended September 30, 2022 and 2021, the Company did not have any recurring measurements for the fair value of assets and liabilities.
The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the nine months ended September 30, 2022 and 2021, the Company had no transfers of its assets or liabilities between levels of the fair value hierarchy.
Significant Concentrations
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions. Cash deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. As of September 30, 2022, the Company had cash and cash equivalents with two financial institutions in the United States with an aggregate balance of $6.7 million. As of September 30, 2021, the Company had cash and cash equivalents with two financial institutions in the United States with an aggregate balance of $28.5 million. The Company has never experienced any losses related to its investments in cash, cash equivalents and restricted cash.
Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s customer base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain customers and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts.
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