Fair Value Measurements

12 Months Ended

Dec. 31, 2023

3. Fair Value Measurements

For accounting purposes, fair value is defined as an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier 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.

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

When quoted market prices are available in active markets, the fair value of assets and liabilities is estimated within Level 1 of the valuation hierarchy. If quoted prices are not available, then fair values are estimated by using pricing models, quoted prices of assets and liabilities with similar characteristics, or discounted cash flows, within Level 2 of the valuation hierarchy. In cases where Level 1 or Level 2 inputs are not available, the fair values are estimated by using inputs within Level 3 of the hierarchy.

None of the Company’s assets or liabilities are recorded at fair value on a recurring basis other than cash and cash equivalents, and short-term investments. No transfers between levels occurred during the periods presented. The fair value of short-term investments is based on market prices quoted on the last day of the fiscal period or other observable market inputs.

The following tables summarize the Company’s assets measured at fair value on a recurring basis (in thousands):


	December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	16,184	$	-	$	-	$	16,184
Money market funds		49		-		-		49
Total cash and cash equivalents		16,233		-		-		16,233
Short-term investments:
U.S. Treasury securities		149,286		-		-		149,286
Corporate debt securities		-		8,253		-		8,253
Asset-backed securities		-		169		-		169
Total short-term investments		149,286		8,422		-		157,708
Total cash and cash equivalents and short-term investments	$	165,519	$	8,422	$	-	$	173,941


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents:
Cash	$	48,690	$	-	$	-	$	48,690
Money market funds		25,576		-		-		25,576
Total cash and cash equivalents		74,266		-		-		74,266
Short-term investments:
U.S. Treasury securities		62,532		-		-		62,532
Corporate debt securities		-		101,467		-		101,467
Asset-backed securities		-		6,311		-		6,311
Total short-term investments		62,532		107,778		-		170,310
Total cash and cash equivalents and short-term investments	$	136,798	$	107,778	$	-	$	244,576

- 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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