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Fair Value of Financial Assets and Liabilities
12 Months Ended
Dec. 31, 2020
Fair Value of Financial Assets and Liabilities  
Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and 2019 (in thousands):

Fair Value Measurements at December 31, 2020

    

Total

    

Level 1

    

Level 2

    

Level 3

Assets:

  

  

  

  

Money market funds, included in cash and cash equivalents

$

119,841

$

119,841

$

$

U.S. Treasury obligations, included in cash and cash equivalents

9,998

$

9,998

$

$

Marketable securities:

 

  

 

  

 

  

 

  

U.S. Treasury obligations

180,673

180,673

Total assets

$

310,512

$

310,512

$

$

Fair Value Measurements at December 31, 2019

    

Total

    

Level 1

    

Level 2

    

Level 3

Assets:

  

  

  

  

Money market funds, included in cash and cash equivalents

$

34,896

$

34,896

$

$

Marketable securities:

 

  

 

  

 

  

 

  

U.S. Treasury obligations

 

121,140

 

121,140

 

 

Total assets

$

156,036

$

156,036

$

$

Cash and cash equivalents and marketable securities include investments in money market funds and U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1 as of December 31, 2020 and 2019. There were no transfers of assets between fair value measurement levels during the years ended December 31, 2020 and 2019.

The carrying amounts reflected in the balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at December 31, 2020 and 2019, due to their short-term nature.

The Company believes the terms of its debt reflect current market conditions for an instrument with similar terms and maturity, therefore the carrying value of the Company's debt approximates its fair value based on Level 3 of the fair value hierarchy.

Upon the completion of the IPO, the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase common stock and the Company reclassified the fair value of the warrant to additional paid-in capital. On November 13, 2020, the warrant for 7,614 shares of the Company’s common stock was exercised at a price of $3.94 per share in a cashless transaction resulting in the issuance of 6,961 shares.