Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows:

Level 1 –	Valuations are based on quoted prices in active markets for identical assets or liabilities and readily accessible by us at the reporting date.
Level 2 –	Valuations based on inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 –	Valuations based on unobservable inputs for which there is little or no market data, which require us to develop our own assumptions.

The following table sets forth the fair value of our financial assets and liabilities that are measured or disclosed on a recurring basis by level within the fair value hierarchy (in thousands):

	March 31, 2022
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	34,524	$	34,524	$	—	$	—
Commercial paper	33,355		—		33,355		—
U.S. government-sponsored agency bonds	10,755		—		10,755		—
Corporate bonds	2,511		—		2,511		—
Asset-backed securities	1,004		—		1,004		—
Total	$	82,149	$	34,524	$	47,625	$	—
Liabilities:
Derivative liability for exit fees	$	1,088	$	—	$	—	$	1,088
Total	$	1,088	$	—	$	—	$	1,088

	December 31, 2021
	Total Fair Value		Level 1		Level 2		Level 3
Assets:
Money market funds	$	71,175	$	71,175	$	—	$	—
Commercial paper	31,935		—		31,935		—
Corporate bonds	7,022		—		7,022		—
Asset-backed securities	5,304		—		5,304		—
Total	$	115,436	$	71,175	$	44,261	$	—
Liabilities:
Derivative liability for exit fee	$	698	$	—	$	—	$	698
Total	$	698	$	—	$	—	$	698

Where quoted prices are available in an active market, securities are classified as Level 1. We classify money market funds as Level 1. When quoted market prices are not available for the specific security, we estimate fair value by using benchmark yields, reported trades, broker/dealer quotes and issuer spreads. We classify U.S. government-sponsored agency bonds, U.S. treasury notes, corporate bonds, commercial paper, and asset-backed securities as Level 2. In certain cases, where there is limited activity or less transparency around inputs to valuation, securities or derivative liabilities, such as the Exit Fee, as defined and discussed in Note 8, are classified as Level 3.

The carrying amounts reflected in the balance sheets for cash equivalents, short-term investments, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values at both March 31, 2022 and December 31, 2021, due to their short-term nature.

Fair Value of Debt

The interest rate of our term loan facility approximates the rate at which we could obtain alternative financing. Therefore, the carrying amount of the term loan facility approximated its fair value at March 31, 2022 and December 31, 2021.