FAIR VALUE OF FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2023

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

(3) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):

			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	June 30,		Assets		Inputs		Inputs
	2023		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	44,750	$	44,750	$	—	$	—
Commercial paper		4,992		—		4,992		—
Total cash equivalents		49,742		44,750		4,992		—
Short-term investments
Commercial paper		47,750		—		47,750		—
Agency bonds		38,458		—		38,458		—
U.S. Treasury bills		2,987		2,987		—		—
Total short-term investments		89,195		2,987		86,208		—
Total fair value of assets	$	138,937	$	47,737	$	91,200	$	—

			Fair Value Measurements Using
			Quoted Prices in
			Active Markets		Significant Other		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2022		(Level 1)		(Level 2)		(level 3)
Assets:
Cash equivalents
Money market funds	$	18,436	$	18,436	$	—	$	—
Total cash equivalents		18,436		18,436		—		—
Short-term investments
Commercial paper		55,577		—		55,577		—
U.S. Treasury bills		26,841		26,841		—		—
Agency Bonds		24,405		—		24,405		—
Total short-term investments		106,823		26,841		79,982		—
Total fair value of assets	$	125,259	$	45,277	$	79,982	$	—

Cash Equivalents and Short-Term Investments

Financial assets measured at fair value on a recurring basis consist of the Company’s cash equivalents and short-term investments. Cash equivalents consisted of money market funds and commercial paper, and short-term investments consisted of U.S. Treasury bills, agency bonds and commercial paper. The Company obtains pricing information from its investment manager and generally determines the fair value of investment securities using standard observable inputs, including reported trades, broker/dealer quotes, and bids and/or offers.

The following tables summarize the Company’s short-term investments (in thousands):

		As of June 30, 2023
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Commercial paper	1 year or less		47,827		2		(79)		47,750
U.S. Treasury bills	2 years or less		2,995		—		(9)		2,986
Agency bonds	2 years or less		38,596		—		(137)		38,459
		$	89,418	$	2	$	(225)	$	89,195

		As of December 31, 2022
				Gross		Gross
		Amortized		unrealized		unrealized		Estimated fair
	Maturity	cost		gains		losses		value
Commercial paper	1 year or less	$	55,645	$	16	$	(84)	$	55,577
U.S. Treasury bills	1 year or less		27,108		—		(267)		26,841
Agency bonds	2 years or less		24,536		2		(133)		24,405
		$	107,289	$	18	$	(484)	$	106,823

The following tables summarize the Company’s short-term investments with unrealized losses for less than 12 months and 12 months or greater (in thousands):

		As of June 30, 2023
		Less than 12 months			12 months or Greater
			Unrealized				Unrealized		Total		Total Unrealized
		Fair Value	Losses		Fair Value		Losses		Fair Value		Losses
Commercial paper	$	37,293	$	(79)	$	—	$	—	$	37,293	$	(79)
U.S. Treasury bills		2,193		(9)		—		—		2,193		(9)
Agency bonds		32,957		(132)		5,501		(5)		38,458		(137)
	$	72,443	$	(220)	$	5,501	$	(5)	$	77,944	$	(225)

		As of December 31, 2022
		Less than 12 months			12 months or Greater
			Unrealized				Unrealized		Total		Total Unrealized
		Fair Value	Losses		Fair Value		Losses		Fair Value		Losses
Commercial paper	$	34,928	$	(84)	$	—	$	—	$	34,928	$	(84)
U.S. Treasury bills		1,971		(6)		24,833		(261)		26,804		(267)
Agency bonds		22,964		(133)		—		—		22,964		(133)
	$	59,863	$	(223)	$	24,833	$	(261)	$	84,696	$	(484)

The Company considers whether unrealized losses have resulted from a credit loss or other factors. The unrealized losses on the Company’s available-for-sale securities as of June 30, 2023 and December 31, 2022 were caused by fluctuations in market value and interest rates as a result of the economic environment and not credit risk. As of June 30, 2023 and December 31, 2022, no allowance for credit losses was recorded. During the six months ended June 30, 2023, the Company did not recognize any impairment losses related to its short-term investments. It is neither management’s intention to sell nor is it more likely than not that the Company will be required to sell these investments prior to recovery of their cost basis or recovery of fair value. Unrealized gains and losses are included in accumulated other comprehensive gain (loss).

Accrued interest receivable is written off through net realized investment gains (losses) at the time the issuer of the bond defaults or is expected to default on payment. Accrued interest receivable related to short-term investments was $0.5 million as of June 30, 2023 and $0.3 million as of December 31, 2022.