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Fair Value Measurements | 3 Months Ended
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Mar. 31, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | Note 3 – FAIR VALUE MEASUREMENTS Financial assets and liabilities are recorded at fair value. The Company uses a three-level hierarchy, which prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. Fair value focuses on an exit price and is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risk associated with investing in those financial instruments. A three-tier fair value hierarchy is used to prioritize the inputs in measuring fair value as follows:
| Level 1 – | Quoted prices in active markets for identical assets or liabilities.
| Level 2 – | Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable, either directly or indirectly.
| Level 3 – | Significant unobservable inputs that cannot be corroborated by market data.
The Company measures its cash equivalents, short-term investments and derivative financial instruments at fair value. The Company classifies its cash equivalents and short-term investments within Level 1 or Level 2 because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The fair value of the Company’s Level 1 financial assets is based on quoted market prices of the identical underlying security. The fair value of the Company’s Level 2 financial assets is based on inputs that are directly or indirectly observable in the market, including the readily-available pricing sources for the identical underlying security that may not be actively traded. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. At December 31, 2020, the warrants related to the Series A preferred stock issuance, the Series B preferred stock issuance, and the convertible promissory notes and the derivative liability related to the issuance of convertible promissory notes were classified within level 3 of the valuation hierarchy. However, these instruments are not present at March 31, 2021 in light of accounting ramifications of the IPO, which are discussed further in Note 7 and Note 8. The carrying amounts of prepaid expenses, payroll tax credit, accounts payable and accrued liabilities approximate fair value due to the short-term nature of these instruments. The following tables provide a summary of the assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 (in thousands). Fair Value Measurements
|  | March 31, 2022 |
|  | Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 16,016 |  |  | $ | 16,016 |  |  | $ | — |  |  | $ | — |
Total cash equivalents |  | $ | 16,016 |  |  | $ | 16,016 |  |  | $ | — |  |  | $ | — |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  | $ | 249 |  |  | $ | — |  |  | $ | 249 |  |  | $ | — |
Commercial paper |  |  | 548 |  |  |  | — |  |  |  | 548 |  |  |  | — |
Corporate notes |  |  | 7,998 |  |  |  | — |  |  |  | 7,998 |  |  |  | — |
Municipal bonds |  |  | 452 |  |  |  | — |  |  |  | 452 |  |  |  | — |
Total short-term investments |  | $ | 9,247 |  |  | $ | — |  |  | $ | 9,247 |  |  | $ | — |
|  | December 31, 2021 |
|  | Fair Value |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 16,830 |  |  | $ | 16,830 |  |  | $ | — |  |  | $ | — |
Total cash equivalents |  | $ | 16,830 |  |  | $ | 16,830 |  |  | $ | — |  |  | $ | — |
Short-term investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  | $ | 250 |  |  | $ | — |  |  | $ | 250 |  |  | $ | — |
Commercial paper |  |  | 2,210 |  |  |  | — |  |  |  | 2,210 |  |  |  | — |
Corporate notes |  |  | 12,024 |  |  |  | — |  |  |  | 12,024 |  |  |  | — |
Municipal bonds |  |  | 1,437 |  |  |  | — |  |  |  | 1,437 |  |  |  | — |
Total short-term investments |  | $ | 15,921 |  |  | $ | — |  |  | $ | 15,921 |  |  | $ | — |

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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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