Financial Instruments and Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Financial Instruments and Fair Value Measurements

The following tables provide information about the Company’s financial instruments that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques utilized to determine such values as of September 30, 2022 and December 31, 2021:


	September 30, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Cash equivalents:
Money market funds	$	8,025	$	—	$	—	$	8,025
Commercial paper	—		5,646		—		5,646
Total cash equivalents	8,025		5,646		—		13,671
Marketable securities:
Corporate debt securities	32,473		—		—		32,473
U.S. treasury securities	29,073		—		—		29,073
U.S. government agency bonds	24,955		—		—		24,955
Total marketable securities	86,501		—		—		86,501
Total assets at fair value	$	94,526	$	5,646	$	—	$	100,172


	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Cash equivalents:
Money market funds	$	41,376	$	—	$	—	$	41,376
Commercial paper	—		12,098		—		12,098
Total cash equivalents	41,376		12,098		—		53,474
Marketable securities:
Corporate debt securities	55,921		—		—		55,921
U.S. treasury securities	37,190		—		—		37,190
U.S. government agency bonds	28,166		—		—		28,166
Total marketable securities	121,277		—		—		121,277
Total assets at fair value	$	162,653	$	12,098	$	—	$	174,751

The following tables summarize the cost, gross unrealized gains, gross unrealized losses and fair value of the marketable securities as of September 30, 2022 and December 31, 2021:


	September 30, 2022
	Cost or Amortized Cost		Unrealized				Fair Value
			Gains		Losses
	(in thousands)
Corporate debt securities	$	32,984	$	—	$	(511)	$	32,473
U.S. treasury securities	29,596		—		(523)		29,073
U.S. government agency bonds	25,553		—		(598)		24,955
Total	$	88,133	$	—	$	(1,632)	$	86,501


	December 31, 2021
	Cost or Amortized Cost		Unrealized				Fair Value
			Gains		Losses
	(in thousands)
Corporate debt securities	$	56,098	$	—	$	(177)	$	55,921
U.S. treasury securities	37,286		—		(96)		37,190
U.S. government agency bonds	28,258		—		(92)		28,166
Total	$	121,642	$	—	$	(365)	$	121,277

As of September 30, 2022 and December 31, 2021, the Company’s cash equivalents approximated their estimated fair value. As such, there are no unrealized gains or losses related to the Company’s cash equivalents.

For the Company’s marketable securities, which were all classified as available-for-sale, the Company utilizes third-party pricing services to obtain fair value. Third-party pricing methodologies incorporate bond terms and conditions, current performance data, proprietary pricing models, real-time quotes from contributing dealers, trade prices and other market data.

The Company’s money market funds, U.S. treasury securities, corporate debt securities and U.S. government agency bonds were valued using Level 1 inputs because they are valued using quoted prices in active markets.

The Company’s commercial paper is valued using Level 2 inputs because it is valued using quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

There were no transfers between levels during the nine months ended September 30, 2022. As of September 30, 2022, of the $86.5 million carrying amount of marketable securities, $83.0 million had a contractual maturity date of less than one year and $3.5 million had a contractual maturity date between one to two years.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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