FAIR VALUE OF FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

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.