Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2023

3. Fair Value of Financial Instruments

The Company’s cash and cash equivalents, accounts receivable, prepaid expenses, and other current assets, accounts payable, accrued expenses and variable interest rate note payable are recorded at cost, which approximates fair value due to their short-term nature.

The following tables summarize assets measured at fair value on a recurring basis as of December 31, 2023 and 2022 and the input categories associated with those assets:


	December 31, 2023
(in thousands)	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	5,721	$	—	$	—
Totals	$	5,721	$	—	$	—

Short-term investments:
Treasury bills and notes	$	—	$	12,886	$	—
Totals	$	—	$	12,886	$	—


	December 31, 2022
(in thousands)	Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	18,148	$	—	$	—
Totals	$	18,148	$	—	$	—

There were no liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022.

The following table summarizes the carrying values and fair values of the Company's financial instruments:


	December 31, 2023
(in thousands)	Amortized Cost		Allowance for Credit Losses		Net Carrying Amount		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Short-term investments:
Treasury bills and notes	$	12,886	$	—	$	12,886	$	—	$	—	$	12,886
Total short-term investments	$	12,886	$	—	$	12,886	$	—	$	—	$	12,886

As of December 31, 2022, the Company did not hold any short-term investments. The Company has investments in U.S. Treasury Bills and U.S. Treasury Notes as of December 31, 2023, some of which mature over a period greater than 90 days but within

one year and are classified as short-term investments. The U.S. Treasury Bills and U.S. Treasury Notes are carried at amortized cost and classified as held to maturity as the Company has the intent and the ability to hold them until they mature. The carrying value of the U.S. Treasury Bills and U.S. Treasury Notes are adjusted for accretion of discounts over the remaining life of the investment. Income related to the U.S. Treasury Bills and U.S. Treasury Notes is recognized in interest income in the Company’s consolidated statement of operations.

- 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.

+ References + Details