Fair Value Measurements of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurements of Financial Instruments

3. Fair Value Measurements of Financial Instruments

Summary of Financial Instruments

The following is a summary of financial instruments (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,901	$	—	$	(1	)	$	3,900
Treasury bills		42,322		94		(28	)		42,388
Government agency bonds		512		—		(1	)		511
Corporate bonds		9,446		—		(35	)		9,411
Total available-for-sale securities	$	56,181	$	94	$	(65	)	$	56,210
Reported in:
Cash and cash equivalents								$	3,196
Short-term investments									53,014
Long-term investments									—
Total available-for-sale securities								$	56,210

	December 31, 2023
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Values
Available-for-sale securities:
Certificates of deposit	$	3,633	$	1	$	—		$	3,634
Treasury bills		37,624	76			—			37,700
Government agency bonds		2,600		—		(3	)		2,597
Corporate bonds		11,504		—		(51	)		11,453
Total available-for-sale securities	$	55,361	$	77	$	(54	)	$	55,384
Reported in:
Cash and cash equivalents								$	3,096
Short-term investments									51,788
Long-term investments									500
Total available-for-sale securities								$	55,384

The contractual maturities of available-for-sale securities are presented in the following table (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	56,181	$	56,210	$	54,859	$	54,884
Due between one to two years		—		—		502		500
	$	56,181	$	56,210	$	55,361	$	55,384

The Company had 68 investments in unrealized loss positions as of March 31, 2024. 53 of such investments have been in unrealized loss positions for less than twelve months. The total Fair Value of such investments is $47.6 million with unrealized losses of approximately $0.1 million as of March 31, 2024. There were no material gross unrealized losses from available-for-sale securities and no material realized gains or losses from available-for-sale securities that were reclassified from accumulated other comprehensive income for the three months ended March 31, 2024.

For investments in available-for-sale debt securities that have unrealized losses, the Company evaluates (i) whether it has the intention to sell any of these investments and (ii) whether it is more likely than not that it will be required to sell any of these investments before recovery of the entire amortized cost basis. Based on this evaluation, the Company determined that there were no other-than-temporary impairments associated with investments as of March 31, 2024.

There were no sales of available-for-sale securities for the three months ended March 31, 2024 and 2023.

Fair Value Measurements

Fair value is defined as the exchange price that would be received from selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:

Level 1. Quoted prices in active markets for identical assets or liabilities.

Level 2. 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.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Financial assets measured at fair value on a recurring basis were as follows (in thousands):

	Fair Value Measurement at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
As of March 31, 2024
Financial assets - available-for-sale securities
Certificates of deposit	$	—		3,900	$	3,900
Treasury bills		—		42,388		42,388
Governmental agency bonds		—		511		511
Corporate bonds		9,411		—		9,411
Total financial assets - available-for-sale securities	$	9,411	$	46,799	$	56,210
As of December 31, 2023
Financial assets - available-for-sale securities
Certificates of deposit	$	—	$	3,634	$	3,634
Treasury bills		2,198		35,502		37,700
Governmental agency bonds		600		1,997		2,597
Corporate bonds		10,953		500		11,453
Total financial assets - available-for-sale securities	$	13,751	$	41,633	$	55,384

The Company uses a pricing service to assist in determining the fair values of all of its cash equivalents, short-term investments and long-term investments. The pricing service uses inputs from multiple industry standard data providers or other third party sources and applies various acceptable methodologies.