Fair Value Measurements

9 Months Ended

Sep. 30, 2022

4. Fair Value Measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:


	September 30, 2022
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	78,255					$	78,255
Totals	$	78,255	$	—	$	—	$	78,255
Short-term investments:
U.S. government treasury securities	$	120,374	$	—	$	—	$	120,374
Marketable securities:
Corporate and agency bonds		—		19,899		—		19,899
Totals	$	120,374	$	19,899	$	—	$	140,273


	December 31, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market fund	$	141,378	$	—	$	—	$	141,378
Marketable securities:
Commercial paper		—		7,998		—		7,998
Corporate and agency bonds		—		753		—		753
Totals	$	141,378	$	8,751	$	—	$	150,129
Short-term investments:
U.S. government treasury securities	$	25,072	$	—	$	—	$	25,072
Marketable securities:
Commercial paper		—		11,569	$	—		11,569
Corporate and agency bonds		—		9,818		—		9,818
Totals	$	25,072	$	21,387	$	—	$	46,459

During the nine months ended September 30, 2022 and the year ended December 31, 2021, there were no transfers between levels. The Company classifies its money market fund and U.S. government treasury securities as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets without any valuation adjustment. The Company classifies its marketable securities (corporate and agency bonds and commercial paper) as Level 2 assets under the fair value hierarchy, as these assets have pricing inputs that are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value is determined using models or other valuation methodologies.

The carrying amounts of prepaid expenses and other current assets, accounts payable, amount due to related party and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

- 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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