Financial Instruments and Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

3. Financial Instruments and Fair Value Measurements

Fair value is defined as the exchange price that would be received to sell an asset or paid to transfer a liability (at 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. The three levels of inputs that may be used to measure fair value include:

Level 1:	Quoted prices in active markets for identical assets or liabilities. Our Level 1 assets consist of money market investments. We do not have Level 1 liabilities.
Level 2:	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. We do not have Level 2 assets or liabilities.
Level 3:	Unobservable inputs that are supported by little or no market activity. We do not have Level 3 assets or liabilities.

The following table identifies our assets and liabilities that were measured at fair value on a recurring basis (in thousands):

	Balance		Level 1		Level 2		Level 3
June 30, 2022
Assets:
Money market investments	$	43,019	$	43,019	$	—	$	—
Total assets at fair value	$	43,019	$	43,019	$	—	$	—
December 31, 2021
Assets:
Money market investments	$	72,934	$	72,934	$	—	$	—
Total assets at fair value	$	72,934	$	72,934	$	—	$	—

There were no liabilities that were measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021.

Financial instruments not recorded at fair value include our convertible senior notes. At June 30, 2022, the carrying amount of the 2024 Notes (2019 Issuance) was $84.7 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $59.1 million. At June 30, 2022, the carrying amount of the 2024 Notes (2020 Issuance) was $56.9 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $38.0 million. At June 30, 2022, the carrying amount of the 2025 Notes was

$296.2 million, which represents the aggregate principal amount net of remaining debt issuance costs, and the fair value was $209.8 million. The fair value was determined using Level 2 inputs based on the indicative pricing published by certain investment banks or trading levels of the convertible senior notes, which are not listed on any securities exchange or quoted on an inter-dealer automated quotation system. See Note 9, Debt for discussion of the convertible senior notes. The carrying amounts of accounts payable and accrued expenses approximate their fair value due to their short-term maturities.