Investments in Non-Marketable Securities

6 Months Ended

Jun. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments in Non-Marketable Securities

Investments in Non-Marketable Securities

Non-Marketable Debt Securities

We classify non-marketable debt securities, which are accounted for as available-for-sale, within Level 3 in the fair value hierarchy because we estimate the fair value based on a qualitative analysis using the most recent observable transaction price and other significant unobservable inputs including volatility, rights, and obligations of the securities we hold.

We determine gains or losses on the sale or extinguishment of non-marketable debt securities using a specific identification method. Unrealized gains and losses from bifurcated embedded derivatives, which represent share-settled redemption features, are recorded as other expense, net, in the unaudited condensed consolidated statements of operations. Unrealized gains and losses on non-marketable debt securities are recorded as a component of other comprehensive loss until realized. Realized gains or losses are recorded as a component of other income (expense), net.

In the three and six months ended June 30, 2021, we recognized $0.2 million and $0.3 million, respectively, in interest income from amortization of debt discount and interest earned on our investment in non-marketable debt security, and $57.5 thousand in other income and $10.5 thousand in other expense, respectively, in other income (expense), net, on the change in the fair value of an embedded bifurcated derivative. We recognized no unrealized or realized gains or losses during the three and six months ended June 30, 2021. We recognized no interest income, other expenses, and unrealized or realized gains or losses during the three and six months ended June 30, 2020.

The following table presents balances of the adjusted cost and carrying value and fair value of non-marketable debt security by contractual maturity (in thousands):

	June 30, 2021
	Adjusted Cost and Carrying Value		Fair Value
Non-marketable debt security due in 1 year or less	$	1,289	$	1,289
	December 31, 2020
	Adjusted Cost and Carrying Value		Fair Value
Non-marketable debt security due in 1 year or less	$	1,000	$	1,000

Non-Marketable Equity Securities

Non-marketable equity securities are investments in privately held companies without readily determinable market value. We measure investments in non-marketable equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. The fair value of non-marketable equity securities that have been remeasured due to impairment are classified within Level 3. We adjust the carrying value of non-marketable equity securities which have been remeasured during the period and recognize resulting gains or losses as a component of other income (expense), net. We recognized no unrealized or realized gain or losses during the three and six months ended June 30, 2021 and 2020.

The following table presents balances of the carrying value of non-marketable equity securities (in thousands):

	June 30, 2021		December 31, 2020
Non-marketable equity securities	$	3,430	$	1,450