Annual report pursuant to Section 13 and 15(d)

Fair Value Measurement

Fair Value Measurement
12 Months Ended
Dec. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
The Company's financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and accrued liabilities. The carrying value of accounts receivable, accounts payable and accrued liabilities approximate their fair values because of their short-term nature. Estimated fair values of available-for-sale debt securities are generally based on prices obtained from commercial pricing services.
In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:
Level 1 - Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3 - Unobservable inputs that reflect the reporting entity’s own assumptions.

The following table summarizes the financial assets (cash, cash equivalents, restricted cash and short-term investments) measured at fair value on a recurring basis:
December 31, 2022
(in thousands) Level 1 Level 2 Level 3 Total
Financial assets:
Cash, cash equivalents and restricted cash $ 94,172  $   $   $ 94,172 
U.S. agency security   4,948    4,948 
Corporate bond   104,080    104,080 
Commercial paper   125,187    125,187 
Treasury bill   12,282    12,282 
Treasury bond   42,220    42,220 
Yankee bond   6,501    6,501 
Total financial assets $ 94,172  $ 295,218  $   $ 389,390 
December 31, 2021
(in thousands) Level 1 Level 2 Level 3 Total
Financial assets:
Cash, cash equivalents and restricted cash $ 231,900  $ —  $ —  $ 231,900 
Certificates of deposit —  3,140  —  3,140 
Corporate bond —  21,820  —  21,820 
Commercial paper —  206,724  —  206,724 
Treasury bill —  2,494  —  2,494 
Total financial assets $ 231,900  $ 234,178  $ —  $ 466,078 
The Company's Level 1 instruments include cash, cash equivalents and restricted cash that are valued using quoted market prices. We estimate the fair values of our investments in corporate debt securities, government and government related securities and certificates of deposits by taking into consideration valuations obtained from third-party pricing services. The fair value of our short-term investments classified within Level 2 is based upon observable inputs that may include benchmark yield curves, reported trades, issuer spreads, benchmark securities and reference data including market research publications. At December 31, 2022 and December 31, 2021, we reclassified $125.2 million and $206.7 million of commercial paper from Level 1 to Level 2, respectively. Additionally, at December 31, 2022 and December 31, 2021, the weighted average remaining contractual maturities of our Level 2 investments were approximately for 7 months and 8 months, respectively. It is the Company's intent for these investments to have an overall rating of A-1, or higher, by Moody’s, Standard & Poor’s and Fitch.

No credit loss allowance was recorded as of December 31, 2022 and December 31, 2021, as we do not believe the unrealized loss is a result of a credit loss due to the nature of our investments. We also considered the current and expected future economic and market conditions and determined that the estimate of credit losses was not significantly impacted.

Refer to Note 4, “Cash, Cash Equivalents and Restricted Cash and Short-Term Investments,” for the carrying amount and related unrealized gains (losses) by type of investment.