Fair Value Measurements

12 Months Ended

Dec. 31, 2022

9. FAIR VALUE MEASUREMENTS

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values:


	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Cash equivalents	$	23,567	$	9,989	$	—	$	33,556
Short-term investments:
Treasury notes		27,159		—		—		27,159
Treasury bills		59,334		—		—		59,334
Commercial paper		—		134,375		—		134,375
Corporate debt securities		—		58,753		—		58,753
Agency bonds		—		4,798		—		4,798
Total short-term investments		86,493		197,926		—		284,419
Restricted cash equivalents		719		—		—		719
Total financial assets	$	110,779	$	207,915	$	—	$	318,694


	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets:
Money market funds	$	49,271	$	—	$	—	$	49,271
Short-term investments:
Commercial paper		—		33,978		—		33,978
Corporate debt securities		—		11,949		—		11,949
Total short-term investments		—		45,927		—		45,927
Restricted cash		189		—		—		189
Total financial assets	$	49,460	$	45,927	$	—	$	95,387

Valuation of Short-Term Investments

The Company estimates the fair values of the short-term investments by taking into consideration valuations obtained from third-party pricing sources. These pricing sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar securities, issuer credit spreads, benchmark yields, and other observable inputs. The Company validates the prices provided by our third-party pricing sources by understanding the models used, obtaining market values from other pricing sources and analyzing pricing data in certain instances.

The Company does not hold any short-term investments classified as Level 3, which are securities valued using unobservable inputs. The Company has not transferred any investment securities between the classification levels.

There were no other assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2022 and 2021.

- 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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