Financial Instruments and Fair Value Measurements

3 Months Ended

Mar. 31, 2023

Financial Instruments and Fair Value Measurements

Financial Instruments and Fair Value Measurements

3. Financial Instruments and Fair Value Measurements

The Company’s financial instruments consist of money market funds. The following tables show the Company’s cash equivalents carrying value and fair value at March 31, 2023 and December 31, 2022 (in thousands):

	As of March 31, 2023 (unaudited)
					Quoted		Significant
					Priced in		other		Significant
					active		observable		unobservable
	Carrying		Fair		markets		inputs		inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds	$	4,993	$	4,993	$	4,993	$	—	$	—
Total assets	$	4,993	$	4,993	$	4,993	$	—	$	—

	As of December 31, 2022
					Quoted		Significant
					Priced in		other		Significant
					active		observable		unobservable
	Carrying		Fair		markets		inputs		inputs
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
Assets
Money market funds	$	3,074	$	3,074	$	3,074	$	—	$	—
Total assets	$	3,074	$	3,074	$	3,074	$	—	$	—

Cash equivalents – Cash equivalents of $5.0 million and $3.1 million as of March 31, 2023 and December 31, 2022, respectively, consisted of money market funds. Money market funds are classified as Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets.

Certain assets and liabilities are carried at fair value under GAAP. 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.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

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

Level 2 - Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, 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 determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

There have been no changes to the valuation methodologies utilized by the Company during the three months ended March 31, 2023 compared to the year ended December 31, 2022. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers of financial instruments between levels during the three months ended March 31, 2023 and the year ended December 31, 2022.