Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Fair Value Measurements

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Note 4 - Fair Value Measurements
9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

4. FAIR VALUE MEASUREMENTS

 

As of September 30, 2023, cash and cash equivalents include the Company’s investments in money market funds, government and municipal debt securities, and corporate debt securities. The Company considers all highly liquid investments with original maturities of three months or less when purchased and have insignificant interest rate risk to be cash equivalents.  Debt securities classified as cash equivalents are required to be accounted for in accordance with the FASB ASC 320, Investments - Debt and Equity Securities. As such, the Company determined its investments in debt securities held at September 30, 2023 should be classified as available-for-sale and are carried at fair value with unrealized gains and losses reported in stockholders’ equity. The cost of debt securities is adjusted for amortization of premiums and discounts to maturity. This amortization is included in other income (expense). Realized gains and losses, as well as interest income, are also included in other income (expense). The fair values of securities are based on quoted market prices to the extent available or alternative pricing sources and models utilizing market observable inputs.

 

The carrying amounts of the Company’s financial instruments, including cash and accounts payable, approximate fair value because of their short maturities. The carrying amount of the noncurrent restricted cash approximates fair value since, absent the restrictions, the underlying assets would be included in cash and cash equivalents.

 

Accounting standards permit companies, at their option, to choose to measure many financial instruments and certain other items at fair value.  The Company has elected to not fair value existing eligible items.

 

Investments by significant category included in cash equivalents at the end of each period were as follows (in thousands):

 

     

September 30, 2023

   

December 31, 2022

 
 

Fair Value Level1

 

Adjusted Cost

   

Gross Unrealized Losses

   

Fair Value

   

Adjusted Cost

   

Gross Unrealized Losses

   

Fair Value

 

Money market funds

Level 1

  $ 19,102     $     $ 19,102     $ 2,143     $     $ 2,143  

Government and municipal debt securities

Level 2

    5,625             5,625       6,759             6,759  

Corporate debt securities

Level 2

    24,144       (7 )     24,137       47,947       (16 )     47,931  

Total investments

  $ 48,871     $ (7 )   $ 48,864     $ 56,849     $ (16 )   $ 56,833  

 


 

1 FASB Topic 820, Fair Value Measurements, establishes a fair value hierarchy that requires the use of observable market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

 

As of September 30, 2023, the Company's unrealized losses result from investments in an unrealized loss position for less than 12 months. The gross unrealized losses related to these investments were primarily driven by factors other than credit risk, including market risk. The Company anticipates that it will recover the entire amortized cost basis of such available-for-sale debt securities and has determined that no allowance was required to be recognized during the three and nine months ended September 30, 2023 and 2022.