FAIR VALUE OF FINANCIAL INSTRUMENTS |
(3) FAIR VALUE OF FINANCIAL INSTRUMENTS The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands): | | | | | | | | | | | | | | | | | | Fair Value Measurements Using | | | | | | Quoted Prices in | | | | | | | | | | | Active Markets | | Significant Other | | Significant | | | | | | for Identical | | Observable | | Unobservable | | | March 31, | | Assets | | Inputs | | Inputs | | | 2023 | | (Level 1) | | (Level 2) | | (level 3) | Assets: | | | | | | | | | | | | | Cash equivalents | | | | | | | | | | | | | Money market funds | | $ | 26,049 | | $ | 26,049 | | $ | — | | $ | — | Total cash equivalents | | | 26,049 | | | 26,049 | | | — | | | — | | | | | | | | | | | | | | Short-term investments | | | | | | | | | | | | | Commercial paper | | | 53,686 | | | — | | | 53,686 | | | — | U.S. Treasury bills | | | 12,468 | | | 12,468 | | | — | | | — | Agency bonds | | | 26,204 | | | — | | | 26,204 | | | — | Total short-term investments | | | 92,358 | | | 12,468 | | | 79,890 | | | — | | | | | | | | | | | | | | Total fair value of assets | | $ | 118,407 | | $ | 38,517 | | $ | 79,890 | | $ | — |
| | | | | | | | | | | | | | | | | | Fair Value Measurements Using | | | | | | Quoted Prices in | | | | | | | | | | Active Markets | | Significant Other | | Significant | | | | | | for Identical | | Observable | | Unobservable | | | December 31, | | Assets | | Inputs | | Inputs | | | 2022 | | (Level 1) | | (Level 2) | | (level 3) | Assets: | | | | | | | | | | | | | Cash equivalents | | | | | | | | | | | | | Money market funds | | $ | 18,436 | | $ | 18,436 | | $ | — | | $ | — | Total cash equivalents | | | 18,436 | | | 18,436 | | | — | | | — | | | | | | | | | | | | | | Short-term investments | | | | | | | | | | | | | Commercial paper | | | 55,577 | | | — | | | 55,577 | | | — | U.S. Treasury bills | | | 26,841 | | | 26,841 | | | — | | | — | Agency Bonds | | | 24,405 | | | — | | | 24,405 | | | — | Total short-term investments | | | 106,823 | | | 26,841 | | | 79,982 | | | — | | | | | | | | | | | | | | Total fair value of assets | | $ | 125,259 | | $ | 45,277 | | $ | 79,982 | | $ | — |
Cash Equivalents and Short-Term Investments Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of money market funds and commercial paper, and short-term investments consisted of U.S. Treasury bills, corporate debt securities and commercial paper. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers. The following tables summarize the Company’s short-term investments (in thousands): | | | | | | | | | | | | | | | | | | | | As of March 31, 2023 | | | | | | | | | Gross | | Gross | | | | | | | | | Amortized | | unrealized | | unrealized | | Estimated fair | | | | Maturity | | cost | | gains | | losses | | value | | Commercial paper | | 1 year or less | | | 53,734 | | | 5 | | | (53) | | | 53,686 | | U.S. Treasury bills | | 2 years or less | | | 12,525 | | | — | | | (57) | | | 12,468 | | Agency bond | | 2 years or less | | | 26,300 | | | 2 | | | (98) | | | 26,204 | | | | | | $ | 92,559 | | $ | 7 | | $ | (208) | | $ | 92,358 | |
| | | | | | | | | | | | | | | | | | | | As of December 31, 2022 | | | | | | | | | Gross | | Gross | | | | | | | | | Amortized | | unrealized | | unrealized | | Estimated fair | | | | Maturity | | cost | | gains | | losses | | value | | Commercial paper | | 1 year or less | | $ | 55,645 | | $ | 16 | | $ | (84) | | $ | 55,577 | | U.S. Treasury bills | | 1 year or less | | | 27,108 | | | — | | | (267) | | | 26,841 | | Agency bond | | 2 years or less | | | 24,536 | | | 2 | | | (133) | | | 24,405 | | | | | | $ | 107,289 | | $ | 18 | | $ | (484) | | $ | 106,823 | |
The following tables summarize the Company’s short-term investments with unrealized losses for less than 12 months and 12 months or greater (in thousands): | | | | | | | | | | | | | | | | | | | | As of March 31, 2023 | | | Less than 12 months | | 12 months or Greater | | | | | | | | | Unrealized | | | | Unrealized | | Total | | Total Unrealized | | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | Commercial paper | $ | 35,656 | | $ | (53) | | $ | — | | $ | — | | $ | 35,656 | | $ | (53) | U.S. Treasury bills | | 1,980 | | | (3) | | | 10,488 | | | (54) | | | 12,468 | | | (57) | Agency bond | | 23,985 | | | (98) | | | — | | | — | | | 23,985 | | | (98) | | $ | 61,621 | | $ | (154) | | $ | 10,488 | | $ | (54) | | $ | 72,109 | | $ | (208) |
| | | | | | | | | | | | | | | | | | | | As of December 31, 2022 | | | Less than 12 months | | 12 months or Greater | | | | | | | | | Unrealized | | | | Unrealized | | Total | | Total Unrealized | | | Fair Value | | Losses | | Fair Value | | Losses | | Fair Value | | Losses | Commercial paper | $ | 34,928 | | $ | (84) | | $ | — | | $ | — | | $ | 34,928 | | $ | (84) | U.S. Treasury bills | | 1,971 | | | (6) | | | 24,833 | | | (261) | | | 26,804 | | | (267) | Agency bond | | 22,964 | | | (133) | | | — | | | — | | | 22,964 | | | (133) | | $ | 59,863 | | $ | (223) | | $ | 24,833 | | $ | (261) | | $ | 84,696 | | $ | (484) |
The Company considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s available-for-sale securities as of March 31, 2023 and December 31, 2022 were caused by fluctuations in market value and interest rates as a result of the economic environment and not credit risk. As of March 31, 2023 and December 31, 2022, no allowance for credit losses was recorded. During the three months ended March 31, 2023 the Company did not recognize any impairment losses related to its short-term investments. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. Unrealized gains and losses are included in accumulated other comprehensive loss. Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. Accrued interest receivable related to short-term investments was $0.3 million as of March 31, 2023 and December 31, 2022.
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