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Fair Value Measurements

9 Months Ended

Sep. 30, 2022

2.	Fair Value Measurements

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the unaudited interim condensed financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Observable inputs other than Level 1 prices 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—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

As of September 30, 2022, financial assets measured and recognized at fair value were as follows (in thousands):

	Fair Value Measurements at September 30, 2022
	Level 1		Level 2		Level 3		Total
Assets
U.S. government bonds	$	8,553	$	—	$	—	$	8,553
Corporate bonds		—		14,456		—		14,456
Asset backed securities		—		871		—		871
Marketable securities		8,553		15,327		—		23,880
Money market funds ⁽¹⁾		40,513		—		—		40,513
Total fair value of assets	$	49,066	$	15,327	$	—	$	64,393

⁽¹⁾

Included in cash and cash equivalents on the balance sheet.

	Fair Value Measurements at September 30, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimate Fair Value
Assets
U.S. government bonds	$	8,595	$	—	$	(42	)	$	8,553
Corporate bonds		14,468		—		(12	)		14,456
Asset backed securities		880		—		(9	)		871
Marketable securities		23,943		—		(63	)		23,880
Money market funds ⁽¹⁾		40,513		—		—			40,513
Total fair value of assets	$	64,456	$	—	$	(63	)	$	64,393

⁽¹⁾

Included in cash and cash equivalents on the balance sheet.

As of December 31, 2021, financial assets measured and recognized at fair value were as follows (in thousands):

	Fair Value Measurements at December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
U.S. government bonds	$	4,667	$	—	$	—	$	4,667
Foreign government agency bonds ⁽¹⁾		—		6,526		—		6,526
Corporate bonds		—		49,989		—		49,989
Asset backed securities		—		18,753		—		18,753
Marketable securities		4,667		75,268		—		79,935
Money market funds ⁽²⁾		15,809		—		—		15,809
Total fair value of assets	$	20,476	$	75,268	$	—	$	95,744

⁽¹⁾

Consists of short-term agency bonds of Asian Development Bank and International Bank for Reconstruction and Development.

⁽²⁾

Included in cash and cash equivalents on the balance sheet.

	Fair Value Measurements at December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimate Fair Value
Assets
U.S. government bonds	$	4,670	$	—	$	(3	)	$	4,667
Foreign government agency bonds ⁽¹⁾		6,530		—		(4	)		6,526
Corporate bonds		50,008		—		(19	)		49,989
Asset backed securities		18,769		—		(16	)		18,753
Marketable securities		79,977		—		(42	)		79,935
Money market funds ⁽²⁾		15,809		—		—			15,809
Total fair value of assets	$	95,786	$	—	$	(42	)	$	95,744

⁽¹⁾

Consists of short-term agency bonds of Asian Development Bank and International Bank for Reconstruction and Development.

⁽²⁾

Included in cash and cash equivalents on the balance sheet.

There were no financial liabilities measured and recognized at fair value as of September 30, 2022 and December 31, 2021.

- 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.

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