Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Financial instruments, including cash and cash equivalents, are recorded at cost, which approximates fair value. Former holders of shares of Legacy Science 37 common stock were allocated Earn-Out Shares in connection with the completion of the Merger. These Earn-Out Shares are accounted for as a liability and require fair value measurement on a recurring basis. Due to the significant unobservable inputs that are required to value these shares, they are classified as Level 3 in the fair value hierarchy. Please refer to Note 11 "Earn-Out Shares" for additional details surrounding the valuation methodology for the Earn-Out Shares.

None of the Company’s non-financial assets or liabilities are subject to fair value measurement on a non-recurring basis. There were no transfers between fair value measurement levels during the six months ended June 30, 2022.

The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of June 30, 2022:


(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	142,324	$	—	$	—	$	142,324
Total	$	142,324	$	—	$	—	$	142,324
Liabilities:
Earn-out liability related to shareholders	$	—	$	—	$	2,500	$	2,500
Total	$	—	$	—	$	2,500	$	2,500

The following table summarizes the fair values of the Company’s assets and liabilities that are measured and reported at fair value on a recurring basis as of December 31, 2021:


(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	19,033	$	—	$	—	$	19,033
Total	$	19,033	$	—	$	—	$	19,033
Liabilities:
Earn-out liability related to shareholders	$	—	$	—	$	98,900	$	98,900
Total	$	—	$	—	$	98,900	$	98,900