Investments

6 Months Ended

Jun. 30, 2024

2. 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 Company's investment in Thirona is comprised of two notes with aggregate face value of $8.0 million and stated interest rate of 10%. The Thirona convertible notes are classified as available-for-sale securities and are included in other assets as of June 30, 2024 and prepaid expenses and other current assets as of December 31, 2023 in the condensed consolidated balance sheets. Available-for-sale investments are 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 the fair value of its available-for-sale investments using level 3 inputs and evaluates the fair value of its investment in Thirona by applying a scenario based method with a hypothetical yield of 33.0% and 35.0%, and volatility of 75.0% and 90.0% at June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024 and December 31, 2023, the fair value of the Company's investment in Thirona was $5.3 million and $6.9 million, respectively. For the three and six months ended June 30, 2024, the Company recognized a loss of $1.6 million on its investment in Thirona as a result of modification of the Thirona convertible notes. For the three and six months ended June 30, 2023, the Company recognized a gain of $0.9 million on its investment in Thirona as a result of the recovery of a temporary impairment and an unrealized holding gain of $0.4 million. For the three and six months ended June 30, 2024, the Company recognized no interest income on investment and $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively.

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 in the condensed consolidated statements of operations as interest income. For the three and six months ended June 30, 2024, the Company recognized $3.2 million and $6.6 million, respectively, of interest income on investments, of which $2.0 million and $3.8 million, respectively, was net accretion on certain investments. For the three and six months ended June 30, 2023, the Company recognized $1.4 million and $2.6 million, respectively, of interest income on investments, of which $0.4 million and $0.4 million, respectively, was net accretion on certain investments. No allowance for credit losses on held-to-maturity securities was required as of June 30, 2024 or December 31, 2023.

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


	June 30, 2024				December 31, 2023
	Amortized Cost Basis		Aggregate Fair Value		Amortized Cost Basis		Aggregate Fair Value
Due in one year or less(1)	$	231,331	$	231,446	$	115,263	$	115,374
Due after one year through five years		13,398		13,478		7,155		7,197
Total	$	244,729	$	244,924	$	122,418	$	122,571

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(1)

The investments due in one year or less include cash equivalents of $80.2 million as of June 30, 2024 and $58.6 million as of December 31, 2023.

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


	June 30, 2024
	Investment Level	Amortized Cost (Carrying Value)			Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market funds and other	Level 1	$	16,775		$	—	$	—		$	16,775
Commercial bonds and paper	Level 2		52,824			52		(69	)		52,807
U.S. Treasury Securities	Level 2		175,130			251		(39	)		175,342
Total cash equivalents and investments			244,729			303		(108	)		244,924
Less: cash equivalents			(80,213	)		—		—			(80,213	)
Total Investments		$	164,516		$	303	$	(108	)	$	164,711


	December 31, 2023
	Investment Level	Amortized Cost (Carrying Value)			Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market funds	Level 1	$	69,611		$	—	$	—		$	69,611
Commercial bonds and paper	Level 2		43,251			135		(38	)		43,348
U.S. Treasury Securities	Level 2		9,556			56		—			9,612
Total cash equivalents and investments			122,418			191		(38	)		122,571
Less: cash equivalents			(58,644	)		—		—			(58,644	)
Total Investments		$	63,774		$	191	$	(38	)	$	63,927

As of June 30, 2024 and December 31, 2023, there was $0.8 million and $0.5 million, respectively, of accrued interest receivable on investments which is included in prepaid expense and other current assets in our condensed consolidated balance sheets.