Investments

9 Months Ended

Sep. 30, 2023

3. Investments

Cash Equivalents — Cash equivalents consist of highly liquid investments with original or remaining maturities of 90 days or less at the time of purchase that are readily convertible into cash.

Available-for-Sale Investment — The Thirona convertible notes are classified as available-for-sale securities and are included in prepaid expenses and other current assets in the condensed consolidated balance sheets. Available-for-sale investments are subsequently measured at fair value with realized gains and losses reported in other income (expense) in the condensed consolidated statements of operations. Unrealized holding gains and losses are excluded from earnings and reported in other comprehensive income (loss) until realized. The Company determines fair value of its available-for-sale investments using level 3 inputs. The Company evaluates the fair value of its investment in Thirona by applying a Monte Carlo simulation model. For the three and nine months ended September 30, 2023, the Company recognized $0.1 million and $0.4 million, respectively, of interest income on investment and $0.1 million and $0.4 million of interest income on investment for the three and nine months ended September 30, 2022, respectively. As of September 30, 2023 and December 31, 2022, the fair value of the Company's investment in Thirona was $8.4 million and $7.1 million, respectively. For the nine months ended September 30, 2022, the Company recognized a gain of $0.9 million on its investment in Thirona as a result of the recovery of a temporary impairment in our condensed consolidated statement of operations, as well as an unrealized holding gain of $0.4 million in our condensed consolidated statement of comprehensive income (loss).

Held-to-Maturity Investments — Investments consist of highly liquid investments that are intended to facilitate liquidity and capital preservation. The amortization or accretion of the Company’s investments is recognized as interest income in the condensed consolidated statements of operations. For the three and nine months ended September 30, 2023, the Company recognized $1.0 million and $3.2 million, respectively, of interest income on investments and $0.5 million and $0.9 million, respectively, of amortization on certain investments. For the three and nine months ended September 30, 2022, the Company recognized $0.7 million and $1.6 million, respectively, of interest income on investments, and $0.2 million and $0.6 million, respectively, of amortization on certain investments. No allowance for credit losses on held-to-maturity securities was required as of September 30, 2023.

The contractual maturities of the Company’s held to maturity investments are summarized below (in thousands):


	September 30, 2023				December 31, 2022
	Amortized Cost Basis		Aggregate Fair Value		Amortized Cost Basis		Aggregate Fair Value
Due in one year or less(1)	$	126,616	$	126,603	$	152,862	$	156,976
Due after one year through five years		3,271		3,258		1,961		1,948
Total	$	129,887	$	129,861	$	154,823	$	158,924

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(1)

The investments due in one year or less include cash equivalents of $68.6 million as of September 30, 2023 and $51.8 million as of December 31, 2022.

The fair value of the cash equivalents, long-term and short-term investments are disclosed below (dollars in thousands).


	September 30, 2023
	Investment Level	Amortized Cost (Carrying Value)		Gross Unrealized Holding Gains (Losses)			Estimated Fair Value
Commercial bonds and paper	Level 2	$	50,247	$	(1	)	$	50,246
Money market funds	Level 1		70,647		1			70,648
U.S. Treasuries	Level 2		8,993		(26	)		8,967
Total cash equivalents and investments			129,887		(26	)		129,861
Less: cash equivalents			68,616		—			68,616
Total Investments		$	61,271	$	(26	)	$	61,245


	December 31, 2022
	Investment Level	Amortized Cost (Carrying Value)		Gross Unrealized Holding Gains (Losses)			Estimated Fair Value
Commercial bonds and paper	Level 2	$	66,762	$	(594	)	$	66,168
Money market funds	Level 1		51,783		—			51,783
U.S. Treasuries	Level 2		36,278		(587	)		35,691
Total cash equivalents and investments			154,823		(1,181	)		153,642
Less: cash equivalents			51,783		—			51,783
Total Investments		$	103,040	$	(1,181	)	$	101,859

As of September 30, 2023, there was $0.4 million of amounts receivable included in our condensed consolidated balance sheets as prepaid expenses and other current assets, which consisted of $0.3 million of accrued interest receivable and $0.1 million of amount receivable on matured investment. As of December 31, 2022, there was $0.6 million of accrued interest receivable and $5.1 million of amount receivable on matured investment.