| 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 September 30, 2023 and December 31, 2022, the Company held $3,384,000 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 , are reported as Cash and cash equivalents, and those with longer maturities
are reported as investments, on the condensed consolidated balance sheets as of September 30, 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 September 30, 2023
9/30/2023 Quoted Prices Significant Other Significant
Investments in U.S. Treasury bills $ 3,384 - $ 3,384 -
Total $ 3,384 $ - $ 3,384 $ -
Fair Value Measurements as of December 31, 2022
12/31/2022 Quoted Prices Significant Other Significant
Investments in U.S. Treasury bills $ 4,130 - $ 4,130 -
Total $ 4,130 $ - $ 4,130 $ - Investments
in debt securities as of September 30, 2023 are summarized by type below (in thousands).
Amortized Gross Gross Fair
U.S. Treasury bills $ 3,326 $ 58 $ - $ 3,384
Total $ 3,326 $ 58 $ - $ 3,384 All investments
in debt securities are due in one year or less as of September 30, 2023. Changes
in the accumulated other comprehensive income balance, net of income taxes, relates solely to net unrealized gain on available-for-sale
securities for the nine-month ended September 30, 2023 is as follows:
Balance at December 31, 2022 $ 32
Amounts reclassified from accumulated other (16 )
16
Net current-period other comprehensive income 42
Balance at September 30, 2023 $ 58 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 September 30, 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. |
