Fair Value Measurements and Investments

3 Months Ended

Mar. 31, 2025

FAIR VALUE MEASUREMENTS AND INVESTMENTS

Fair Value Measurements

The guidance on fair value measurements and disclosures defines fair value, establishes a framework for measuring fair value, and requires enhanced disclosures about assets and liabilities measured at fair value. Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are used to determine fair value. These models employ valuation techniques that involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities recorded at fair value on a recurring basis in our condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by the guidance on fair value measurements, are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities and are as follows:

Level 1 - Valuation is based upon quoted market prices for identical instruments traded in active markets.

Level 2 - Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques.

The fair values of our cash and cash equivalents, accounts receivable, and accounts payable, approximate their carrying amounts due to their short duration.

As of March 31, 2025, the carrying amount of investments in U.S. Treasury Bills was $25.2 million. The Company had $15.0 million classified as Cash and cash equivalents and $10.2 million classified as Short-term investments on our consolidated balance sheets. Additionally, the Company also had the carrying amount of $5.2 million in money market funds that were classified as Cash and cash equivalents on our condensed consolidated balance sheets. At March 31, 2025, the fair value of these investments approximated its carrying amount. The fair value of the money market fund and the U.S. Treasury Bills is considered a Level 1 measurement.

The fair value of our convertible notes was determined based on the closing trading price of our convertible notes on March 31, 2025 and was primarily affected by the trading price of the Company's common stock and market interest rates. The fair value of our convertible notes is considered a Level 2 measurement as they are not actively traded.

Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations (in thousands):


	As of March 31, 2025
Assets	Level 1		Level 2
Cash equivalents: Money market fund	$	5,217	—
Cash equivalents: U.S. Treasury securities	15,134		—
Short-term investments: U.S. Treasury securities	10,190		—
Total	$	30,541	—
Liabilities
Convertible Senior Notes due 2028	—		$	75,240


	As of December 31, 2024
Assets	Level 1		Level 2
Cash equivalents: Money market fund	$	10,466	—
Cash equivalents: U.S. Treasury securities	9,999		—
Short-term investments: U.S. Treasury securities	9,999		—
Total	$	30,464	—
Liabilities
Convertible Senior Notes due 2028	—		$	72,540