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Note 6 - Fair Value Measurements | 9 Months Ended
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Sep. 30, 2022
Notes to Financial Statements |
Fair Value Disclosures [Text Block] | Note 6 – Fair Value Measurements The Company follows authoritative accounting guidance, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:
| Level 1: | Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
| Level 2: | Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
| Level 3: | Unobservable inputs that reflect the reporting entity’s own assumptions.
The carrying amounts of the Company’s cash, restricted cash, other current assets, accounts payable and accrued liabilities are generally considered to be representative of their fair value because of the short-term nature of these assets and liabilities. The carrying value of the prepaid forward obligation (See Note 9 - Prepaid Forward Obligation) approximates its fair value. The Company estimated the fair value of the prepaid forward obligation using Level 3 inputs, including internally developed financial forecasts and management's estimate of probability of success related to product candidates, and determined that the effective interest rate in the obligation approximates market rates for loans with similar terms and risk characteristics. The Company estimated the fair value of long-term debt (see Note 10 - Long-Term Debt) using the income approach with Level 3 inputs. The Company estimated future floating rate interest payments using a forward curve of a three-month benchmark rate, and estimated fair value based on publicly available data reported in the financial statements of publicly traded venture lending companies. Based on a reasonable range of yields for debt instruments of similar tenor in a similar industry, the Company determined that the carrying value of the long-term debt on the Company's balance sheet approximates its fair value. No transfers between levels have occurred during the periods presented. Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of September 30, 2022 are as follows (in thousands):
|  |  |  |  |  | Fair Value Measurements Using |
|  |  |  |  |  | Quoted Prices |  |  | Significant |
|  |  |  |  |  | in Active |  |  | Other |
|  | Balance as of |  |  | Markets for |  |  | Observable |
|  | September 30, |  |  | Identical Assets |  |  | Inputs |
|  | 2022 |  |  | (Level 1) |  |  | (Level 2) |
Marketable securities |  |  |  |  |  |  |  |  |  |  |  |
US government |  |  | 46,452 |  |  |  | 46,452 |  |  |  | — |
Corporate bonds |  |  | 4,406 |  |  |  | — |  |  |  | 4,406 |
Commercial paper |  |  | 12,312 |  |  |  | — |  |  |  | 12,312 |
Certificates of deposit |  |  | 4,055 |  |  |  | — |  |  |  | 4,055 |
Total marketable securities |  |  | 67,225 |  |  |  | 46,452 |  |  |  | 20,773 |
Assets measured at fair value on a recurring basis based on Level 1 and Level 2 fair value measurement criteria as of December 31, 2021 are as follows (in thousands):
|  |  |  |  |  | Fair Value Measurements Using |
|  |  |  |  |  | Quoted Prices |  |  | Significant |
|  |  |  |  |  | in Active |  |  | Other |
|  | Balance as of |  |  | Markets for |  |  | Observable |
|  | December 31, |  |  | Identical Assets |  |  | Inputs |
|  | 2021 |  |  | (Level 1) |  |  | (Level 2) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash equivalents |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 21,402 |  |  | $ | 21,402 |  |  | $ | — |
Marketable securities |  |  |  |  |  |  |  |  |  |  |  |
US government |  |  | 19,307 |  |  |  | 19,307 |  |  |  | — |
Corporate bonds |  |  | 8,652 |  |  |  | — |  |  |  | 8,652 |
Commercial paper |  |  | 14,492 |  |  |  | — |  |  |  | 14,492 |
Certificates of deposit |  |  | 3,003 |  |  |  | — |  |  |  | 3,003 |
Total marketable securities |  |  | 45,454 |  |  |  | 19,307 |  |  |  | 26,147 |
Total assets at fair value |  | $ | 66,856 |  |  | $ | 40,709 |  |  | $ | 26,147 |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
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