Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 5. Fair Value Measurements

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. ASC 820 establishes a fair value hierarchy, 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.

▪Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, 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 that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There were no financial assets measured at fair value as of December 31, 2021. Financial assets carried at fair value and measured on a recurring basis as of December 31, 2020 are classified in the hierarchy as follows (in thousands):

	Total		Level 1		Level 2		Level 3
Cash equivalents:
Money market funds	$	286	$	286	$	—	$	—
Total cash equivalents		286		286		—		—
Available-for-sale investments
U.S. corporate debt securities		858		—		858		—
Foreign corporate debt securities		953		—		953		—
Total available-for-sale investments		1,811		—		1,811		—
Total financial assets carried at fair value	$	2,097	$	286	$	1,811	$	—

Teknova has not transferred any investment securities between the three levels of the fair value hierarchy. Money market funds are included in cash and cash equivalents in the balance sheets. Available-for-sale investments are included in short-term investments—marketable securities in the balance sheets.

Teknova classifies investments in money market funds and U.S. treasury bills and government agency obligations within Level 1 as the prices are available from quoted prices in active markets. The Company’s investments in debt securities are classified as Level 2. Investments in U.S. corporate debt securities are valued based on observable inputs such as the U.S. Treasury yield curve, market indicated spreads, and quoted prices for identical assets in markets that are not active and/or similar assets in markets that are active. Investments in foreign corporate securities are valued based on observable inputs such as the applicable, country-specific market yield

curve, market indicated spreads by security rating and quoted prices for identical assets in markets that are not active and/or similar assets in markets that are active.

As of December 31, 2021 and 2020, short-term investments included zero and $1.8 million of available-for-sale securities with contractual maturities less than one year, respectively.

Unrealized gains and losses associated with the investments are reported in accumulated other comprehensive income. The Company had no unrealized gains and losses for the year ended December 31, 2021. For the year ended December 31, 2020, the Company recorded an insignificant amount in net unrealized gains associated with the short-term investments though other comprehensive income on the accompanying financial statements.

Realized gains and losses associated with investments, if any, are reported in other expense, net. The Company did not recognize any realized gains or losses during the year ended December 31, 2021. Teknova recognized an insignificant amount in realized losses for the year ended December 31, 2020.