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Note 4 - Fair-Value Measurements

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 4—Fair-Value Measurements

All of our investments are held in our name and are classified as short-term and held-to-maturity. Interest income from investments for the years ended December 31, 2023 and December 31, 2022 were $14.7 million and $2.2 million, respectively.

The following tables summarize our investments:

		*December 31, 2023*
						*Gross Unrealized*
		*Amortized Cost*				*Gains/(Losses)*				*Estimated Fair Value*
		(In thousands)

U.S. government securities classified as short-term investments		$	102,100			$	19			$	102,119
Money-market funds classified as short-term investments			62,643				—				62,643
Total short-term investments			164,743				19				164,762
Certificate of deposit classified as non-current restricted investments			1,054				—				1,054
Total investments		$	165,797			$	19			$	165,816

		*December 31, 2022*
						*Gross Unrealized*
		*Amortized Cost*				*Gains/(Losses)*				*Estimated Fair Value*
		(In thousands)

U.S. government securities classified as short-term investments		$	99,027			$	22			$	99,049
Money-market funds classified as short-term investments			84,882				—				84,882
Total short-term investments			183,909				22				183,931
Certificate of deposit classified as non-current restricted investments			1,054				—				1,054
Total investments		$	184,963			$	22			$	184,985

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:

Level 1—Observable inputs for identical assets or liabilities, such as quoted prices in active markets;

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our fair-value hierarchy for our financial assets are as follows:

		*December 31, 2023*
		*Level 1*				*Level 2*				*Level 3*				*Total*
		(In thousands)

U.S. government securities classified as short-term investments		$	—			$	102,119			$	—			$	102,119
Money-market funds classified as short-term investments			62,643				—				—				62,643
Total short-term investments			62,643				102,119				—				164,762
Money-market funds classified as non-current restricted investments			1,054				—				—				1,054
Total investments		$	63,697			$	102,119			$	—			$	165,816

		*December 31, 2022*
		*Level 1*				*Level 2*				*Level 3*				*Total*
		(In thousands)

U.S. government treasury bills classified as short-term investments		$	—			$	99,049			$	—			$	99,049
Money-market funds classified as short-term investments			84,882				—				—				84,882
Total short-term investments			84,882				99,049				—				183,931
Money-market funds classified as non-current restricted investments			1,054				—				—				1,054
Total investments		$	85,936			$	99,049			$	—			$	184,985

Unrealized gains and losses on our short-term investments were not material for either period presented. Cash held in demand deposit accounts of $7.1 million and $11.0 million is excluded from our fair-value hierarchy disclosure as of December 31, 2023 and 2022, respectively. The carrying amounts for receivables, accounts payable and accrued liabilities, and other current monetary assets and liabilities, including lease financing obligations, approximate fair value.

See “Note 6 - Convertible Senior Notes” and “Note 8 – OMIDRIA Royalty Obligation” for the carrying amount and estimated fair value of our 2023 Notes, 2026 Notes and the OMIDRIA royalty obligation.

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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