Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements and Short-Term Investments

v3.20.1
Fair Value Measurements and Short-Term Investments
12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Short-Term Investments

3. Fair Value Measurements and Short-Term Investments

The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy:

 

 

 

December 31, 2019

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

3,151

 

 

$

3,151

 

 

$

-

 

 

$

-

 

Commercial paper

 

 

4,952

 

 

 

-

 

 

 

4,952

 

 

 

-

 

Corporate debt securities

 

 

69,499

 

 

 

-

 

 

 

69,499

 

 

 

-

 

Asset-backed securities

 

 

27,055

 

 

 

-

 

 

 

27,055

 

 

 

-

 

U.S. government agency securities

 

 

27,007

 

 

 

-

 

 

 

27,007

 

 

 

-

 

Total

 

$

131,664

 

 

$

3,151

 

 

$

128,513

 

 

$

-

 

 

 

 

December 31, 2018

 

 

 

Total

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

(in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

116,202

 

 

$

116,202

 

 

$

-

 

 

$

-

 

Commercial paper

 

 

26,625

 

 

 

-

 

 

 

26,625

 

 

 

-

 

Corporate debt securities

 

 

11,774

 

 

 

-

 

 

 

11,774

 

 

 

-

 

Asset-backed securities

 

 

16,899

 

 

 

-

 

 

 

16,899

 

 

 

-

 

U.S. government agency securities

 

 

23,896

 

 

 

-

 

 

 

23,896

 

 

 

-

 

Total

 

$

195,396

 

 

$

116,202

 

 

$

79,194

 

 

$

-

 

 

Where applicable, the Company uses quoted market prices in active markets for identical assets to determine fair value. This pricing methodology applies to Level 1 investments, which are composed of money market funds.

If quoted prices in active markets for identical assets are not available, then the Company uses quoted prices for similar assets or inputs other than quoted prices that are observable, either directly or indirectly. These investments are included in Level 2 and consist of commercial paper, corporate debt securities, and U.S. government agency securities. These assets are valued using market prices when available, adjusting for accretion of the purchase price to face value at maturity.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

In certain cases where there is limited activity or less transparency around inputs to valuation, securities are classified as Level 3 within the valuation hierarchy. Level 3 liabilities that were measured at estimated fair value on a recurring basis consisted of the redeemable convertible preferred stock warrant liability (prior to closing of the Company’s IPO).

Upon closing of the IPO on October 1, 2018, all of the outstanding redeemable convertible preferred stock warrants either expired or were converted into common stock warrants, which resulted in the reclassification of the redeemable convertible preferred stock warrant liability to other income and additional paid-in-capital.