| Investment valuation | 3. Investment valuation The Company carries its investments
at fair value. Fair value is an estimate of the 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 (i.e., the exit price at the measurement date). Fair value
measurements are not adjusted for transaction costs. A fair value hierarchy provides
for prioritizing inputs to valuation techniques used to measure fair value into three levels:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs
reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained
from sources independent of the Company.
Level 3 Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what
market participants would use in valuing the asset or liability. An asset or liability's level
within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability
of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and
liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 or Level 2 assets or liabilities. As
of March 31, 2023 and December 31, 2022, the Company held $3,871,000 and $4,130,000, respectively, in U.S. government debt securities.
U.S. government securities are valued using a model that incorporates market observable data, such as reported sales of similar securities,
broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotations. Money market
funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. U.S. government debt securities are
categorized in Level 2 of the fair value hierarchy, depending on the inputs used and market activity levels for specific securities. The
U.S. government debt securities, which have maturities of three months or less at time
of purchase , are reported as Cash and cash equivalents, and those with longer maturities are reported as
investments, on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. Short-term
investments in marketable securities have a stated maturity of twelve months or less from the balance sheet date. These securities are
considered as available for sale and are reported at fair value. Unrealized gains and losses would be recorded net of tax as a component
of Accumulated other comprehensive income within stockholders' equity. Declines in market value from the original cost deemed to be "other-than-temporary"
are charged to Interest and other income, net, in the period in which the loss occurs. The Company considers both the duration for
which a decline in value has occurred and the extent of the decline in its determination of whether a decline in value has been “other
than temporary.” Realized gains and losses are calculated based on the specific identification method and are included in Interest
and other income, net, in the condensed consolidated statement of operations. The
following table presents the Company’s financial instruments at fair value (in thousands):
Fair Value Measurements as of March 31, 2023
3/31/2023 Quoted Prices Significant Significant
Investments in U.S. Treasury bills $ 3,871 $ - $ 3,871 $ -
Fair Value Measurements as of December 31, 2022
12/31/2022 Quoted Prices Significant Significant
Investments in U.S. Treasury bills $ 4,130 $ - $ 4,130 $ - Investments
in debt securities as of March 31, 2023 are summarized by type below (in thousands).
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury bills $ 3,804 $ 67 $ - $ 3,871
Total $ 3,804 $ 67 $ - $ 3,871 All investments
in debt securities are due in one year or less as of March 31, 2023. Investments
in debt securities as of December 31, 2022 are summarized by type below (in thousands).
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value
U.S. Treasury bills $ 4,098 $ 32 $ - $ 4,130
Total $ 4,098 $ 32 $ - $ 4,130 The Company may be exposed to credit losses through its available-for-sale investments. An available-for-sale
security is impaired when its fair value declines below its amortized cost basis. Unrealized losses resulting from the amortized cost
basis of any available-for-sale debt security exceeding its fair value are evaluated for identification of credit losses. When evaluating
the investments for impairment at each reporting period, the Company reviews factors such as the extent of the unrealized loss, historical
losses, current and future economic market conditions, and financial condition of the issuer. As of March 31, 2023, the Company has
not recognized an allowance for expected credit losses related to its available-for-sale securities as the Company has not identified
any unrealized losses for these investments attributable to credit factors. |
