Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

2. Fair Value Measurements

ASC Topic 820, Fair Value Measurement, defines fair value as the exchange price that would be received for an asset, or an exit price 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. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows:

Level 1—Fair value is based on observable inputs such as quoted prices for identical assets or liabilities in active markets.

Level 2—Fair value is determined using quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active or are directly or indirectly observable.

Level 3—Fair value is determined using one or more significant inputs that are unobservable in active markets at the measurement date, such as an option pricing model, discounted cash flow or similar technique.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

On a recurring basis, the Company measures certain of its financial assets and liabilities at fair value. The fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis was determined using the following inputs:

	As of June 30, 2022
(In thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
U.S. Treasury securities, $19,960 at cost	$	19,984	$	—	$	—	$	19,984
Commercial Paper, $29,923 at cost		29,953		—		—		29,953
Marketable Securities:
U.S. Treasury securities, $59,629 at cost		59,639		—		—		59,639
Commercial Paper, $19,853 at cost		19,868		—		—		19,868
Total assets	$	129,444	$	—	$	—	$	129,444
Liabilities:
Warrant liability	$	—	$	3,169	$	—	$	3,169
Total liabilities	$	—	$	3,169	$	—	$	3,169

	As of December 31, 2021
(In thousands)	Level 1		Level 2		Level 3		Total
Liabilities:
Warrant liability	$	—	$	—	$	13,701	$	13,701
Total liabilities	$	—	$	—	$	13,701	$	13,701

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The carrying amounts of accounts payable and accrued expenses approximate their fair values because of the relatively short periods until they are required to be settled.

The following table sets forth a reconciliation from the opening balances to the closing balances for Level 3 values:

(In thousands)
Balance at December 31, 2021	$	13,701
Warrant liability transferred out of Level 3		(13,701	)
Balance at June 30, 2022	$	—

Transfers to/from Levels 1, 2 and 3 are recognized at the beginning of the reporting period in which a change in valuation technique or methodology occurs. During the first quarter of 2022 the trading price of the Public Warrants was used to value the Private Placement Warrants, and a third-party valuation was no longer deemed necessary resulting in the estimated fair value of the Private Placement Warrants being transferred from a Level 3 fair value measurement to a Level 2 fair value measurement.