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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 001-39538

 

GRAYBUG VISION, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

 

45-2120079

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

275 Shoreline Drive, Suite 450

Redwood City, CA 94065

(Address of principal executive offices including zip code)

Registrant’s telephone number, including area code: (650487-2800

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

GRAY

 

The Nasdaq Global Market

 

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No  

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

 

Accelerated filer

 

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    yes      no  

The number of shares of the Registrant’s common stock outstanding as of August 6, 2021 was 21,284,676.

 

 

 

 

 


 

 

Table of Contents

 

 

 

 

Page

 

 

PART I—FINANCIAL INFORMATION

4

Item 1.

 

Financial Statements

4

 

 

Condensed Balance Sheets as of June 30, 2021 (unaudited) and December 31, 2020 (See Note 2)

4

 

 

Condensed Statements of Operations for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

5

 

 

Condensed Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

6

 

 

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2021 and 2020 (unaudited)

7

 

 

Condensed Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (unaudited)

8

 

 

Notes to the Condensed Financial Statements (unaudited)

9

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

24

Item 4.

 

Controls and Procedures

24

 

 

 

 

 

 

PART II—OTHER INFORMATION

25

Item 1.

 

Legal Proceedings

25

Item 1A.

 

Risk Factors

25

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

68

Item 3.

 

Defaults Upon Senior Securities

68

Item 4.

 

Mine Safety Disclosures

68

Item 5.

 

Other Information

68

Item 6.

 

Exhibits

69

SIGNATURES

70

 

In this Quarterly Report on Form 10-Q, “we,” “our,” “us,” “Graybug” and the “Company” refer to Graybug Vision, Inc. This report contains references to trademarks belonging to other entities, which are the property of their respective holders. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

 

 

 

 

2


 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of present and historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy, prospective products, planned preclinical studies and clinical trials, regulatory approvals, research and development costs, and timing and likelihood of success, as well as plans and objectives of management for future operations, may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words.

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to us. Such statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part I. Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II. Item 1A “Risk Factors.” These risks and uncertainties include, but are not limited to:

 

our recently completed clinical trial of GB-102 and our planned clinical trials of GB-401;

 

our ability to identify and secure partner funding of further clinical trials of GB-102;

 

the success, cost and timing of our development activities, preclinical studies and clinical trials;

 

the translation of our preclinical results and data and early clinical trial results into future clinical trials in humans;

 

the effects of the ongoing COVID-19 pandemic, and the corresponding responses of businesses and governments, on our business and financial results;

 

the timing or likelihood of regulatory filings and approvals;

 

our ability to receive the required regulatory approvals to market and sell our products in the United States and other countries;

 

our ability to develop sales and marketing capabilities;

 

the rate and degree of market acceptance of any products we are able to commercialize;

 

the effects of increased competition as well as innovations by new and existing competitors in our market;

 

our ability to obtain funding for our operations;

 

our ability to establish and maintain collaborations;

 

our ability to effectively manage our anticipated growth;

 

our ability to maintain, protect and enhance our intellectual property rights and proprietary technologies;

 

our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties;

 

costs associated with defending intellectual property infringement, product liability and other claims;

 

regulatory developments in the United States and other foreign countries;

 

our ability to attract and retain qualified employees;

 

our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; and

 

statements regarding future revenue, hiring plans, expenses, capital expenditures, capital requirements and stock performance.

You should read this Quarterly Report on Form 10-Q and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

3


 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

 

 

 

GRAYBUG VISION, INC.

Condensed Balance Sheets

(in thousands)

 

 

 

 

June 30,

2021

 

 

December 31,

2020

 

 

 

(unaudited)

 

 

(See Note 2)

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,864

 

 

$

33,418

 

Short-term investments

 

 

65,722

 

 

 

61,615

 

Prepaid expenses and other current assets

 

 

2,465

 

 

 

4,207

 

Total current assets

 

 

76,051

 

 

 

99,240

 

Property and equipment, net

 

 

2,006

 

 

 

1,946

 

Prepaid expenses and other non-current assets

 

 

136

 

 

 

608

 

Long-term investments

 

 

4,628

 

 

 

 

Total assets

 

$

82,821

 

 

$

101,794

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

2,101

 

 

$

2,513

 

Accrued research and development

 

 

396

 

 

 

1,356

 

Other current liabilities

 

 

1,644

 

 

 

3,128

 

Total current liabilities

 

 

4,141

 

 

 

6,997

 

Deferred rent, long term portion

 

 

13

 

 

 

11

 

Total liabilities

 

 

4,154

 

 

 

7,008

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

231,183

 

 

 

228,155

 

Accumulated deficit

 

 

(152,524

)

 

 

(133,367

)

Accumulated other comprehensive loss

 

 

6

 

 

 

(4

)

Total stockholders’ equity

 

 

78,667

 

 

 

94,786

 

Total liabilities and stockholders’ equity

 

$

82,821

 

 

$

101,794

 

 

See accompanying notes to unaudited condensed financial statements.

4


 

GRAYBUG VISION, INC.

Condensed Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

4,166

 

 

$

4,632

 

 

$

10,614

 

 

$

10,717

 

General and administrative

 

 

3,575

 

 

 

1,408

 

 

 

8,615

 

 

 

3,119

 

Total operating expenses

 

 

7,741

 

 

 

6,040

 

 

 

19,229

 

 

 

13,836

 

Loss from operations

 

 

(7,741

)

 

 

(6,040

)

 

 

(19,229

)

 

 

(13,836

)

Interest income

 

 

33

 

 

 

9

 

 

 

72

 

 

 

117

 

Change in fair value of preferred stock tranche obligation

 

 

 

 

 

162

 

 

 

 

 

 

56

 

Net loss

 

 

(7,708

)

 

 

(5,869

)

 

 

(19,157

)

 

 

(13,663

)

Cumulative dividends on convertible preferred stock

 

 

 

 

 

(3,494

)

 

 

 

 

 

(4,793

)

Net loss attributable to common stockholders

 

$

(7,708

)

 

$

(9,363

)

 

$

(19,157

)

 

$

(18,456

)

Net loss per common share—basic and diluted

 

$

(0.36

)

 

$

(6.79

)

 

$

(0.91

)

 

$

(13.40

)

Weighted-average number of shares outstanding used in

   computing net loss per common share—basic and diluted

 

 

21,148,743

 

 

 

1,379,644

 

 

 

21,084,915

 

 

 

1,377,431

 

 

 

See accompanying notes to unaudited condensed financial statements.

 

5


 

 

GRAYBUG VISION, INC.

Condensed Statements of Comprehensive Loss

(in thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss

 

$

(7,708

)

 

$

(5,869

)

 

$

(19,157

)

 

$

(13,663

)

Unrealized gain (loss) on available-for-sale securities, net of tax

 

 

6

 

 

 

 

 

 

10

 

 

 

(3

)

Comprehensive loss

 

$

(7,702

)

 

$

(5,869

)

 

$

(19,147

)

 

$

(13,666

)

 

See accompanying notes to unaudited condensed financial statements.

 

 

 

6


 

 

GRAYBUG VISION, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(Unaudited)

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Equity

 

Balance—December 31, 2020

 

 

 

 

$

 

 

 

 

20,979,265

 

 

$

2

 

 

$

228,155

 

 

$

(133,367

)

 

$

(4

)

 

$

94,786

 

Stock issued on exercise of stock

   options

 

 

 

 

 

 

 

 

 

76,679

 

 

 

 

 

 

92

 

 

 

 

 

 

 

 

 

92

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,129

 

 

 

 

 

 

 

 

 

1,129

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,449

)

 

 

 

 

 

(11,449

)

Unrealized gain on available-for-sale

   securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

4

 

Balance—March 31, 2021

 

 

 

 

$

 

 

 

 

21,055,944

 

 

$

2

 

 

$

229,376

 

 

$

(144,816

)

 

$

 

 

$

84,562

 

Stock issued on exercise of stock

   options

 

 

 

 

 

 

 

 

 

228,732

 

 

 

 

 

 

495

 

 

 

 

 

 

 

 

 

495

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,312

 

 

 

 

 

 

 

 

 

1,312

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,708

)

 

 

 

 

 

(7,708

)

Unrealized gain on available-for-sale

   securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

6

 

Balance—June 30, 2021

 

 

 

 

$

 

 

 

 

21,284,676

 

 

$

2

 

 

$

231,183

 

 

$

(152,524

)

 

$

6

 

 

$

78,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible

Preferred Stock

 

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Accumulated

Other

Comprehensive

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Deficit

 

Balance—December 31, 2019

 

 

117,809,883

 

 

$

131,363

 

 

 

 

1,371,467

 

 

$

 

 

$

2,879

 

 

$

(105,836

)

 

$

3

 

 

$

(102,954

)

Stock issued on exercise of stock

   options

 

 

 

 

 

 

 

 

 

5,446

 

 

 

 

 

 

11

 

 

 

 

 

 

 

 

 

11

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

226

 

 

 

 

 

 

 

 

 

226

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,794

)

 

 

 

 

 

(7,794

)

Unrealized loss on available-for-sale

   securities, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3

)

 

 

(3

)

Balance—March 31, 2020

 

 

117,809,883

 

 

$

131,363

 

 

 

 

1,376,913

 

 

$

 

 

$

3,116

 

 

$

(113,630

)

 

$

 

 

$

(110,514

)

Stock issued on exercise of stock

   options

 

 

 

 

 

 

 

 

 

5,287

 

 

 

 

 

 

12

 

 

 

 

 

 

 

 

 

12

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

214

 

 

 

 

 

 

 

 

 

214

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,869

)

 

 

 

 

 

(5,869

)

Balance—June 30, 2020

 

 

117,809,883

 

 

$

131,363

 

 

 

 

1,382,200

 

 

$

 

 

$

3,342

 

 

$

(119,499

)

 

$

 

 

$

(116,157

)

 

See accompanying notes to unaudited condensed financial statements.

 

 

7


 

 

GRAYBUG VISION, INC.

Condensed Statements of Cash Flows

(in thousands)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(19,157

)

 

$

(13,663

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

2,441

 

 

 

440

 

Depreciation

 

 

247

 

 

 

188

 

Change in fair value of preferred stock tranche obligation

 

 

 

 

 

(56

)

Accretion of premium and discounts on investments, net

 

 

67

 

 

 

(17

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Prepaid expenses and other current and non-current assets

 

 

2,214

 

 

 

193

 

Accounts payable

 

 

(415

)

 

 

(1,705

)

Accrued research and development

 

 

(960

)

 

 

(1,108

)

Other current and non-current liabilities

 

 

(1,482

)

 

 

(1,205

)

Net cash used in operating activities

 

 

(17,045

)

 

 

(16,933

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(304

)

 

 

(154

)

Purchases of investments

 

 

(58,126

)

 

 

 

Maturity of investments

 

 

49,334

 

 

 

20,100

 

Net cash (used in) provided by investing activities

 

 

(9,096

)

 

 

19,946

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

587

 

 

 

23

 

Payment of offering costs

 

 

 

 

 

(1,364

)

Net cash provided by (used in) financing activities

 

 

587

 

 

 

(1,341

)

Net (decrease) increase in cash and cash equivalents

 

 

(25,554

)

 

 

1,672

 

Cash and cash equivalents at beginning of period

 

 

33,418

 

 

 

15,870

 

Cash and cash equivalents at end of period

 

$

7,864

 

 

$

17,542

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Deferred offering costs included in accounts payable and other current liabilities

 

$

 

 

$

9

 

Property and equipment purchases included in accounts payable and other current liabilities

 

$

52

 

 

$

 

 

See accompanying notes to unaudited condensed financial statements.

 

 

8


 

 

GRAYBUG VISION, INC.

Notes to Condensed Financial Statements

(Unaudited)

1. Organization

Graybug Vision, Inc., the Company or Graybug, is a clinical-stage biopharmaceutical company developing medicines for the treatment of diseases of the retina and optic nerve. The Company presently devotes substantially all of its resources to conducting research and development and raising capital. The Company was founded in May 2011 and maintains facilities in Redwood City, California and Baltimore, Maryland.

The Company is subject to risks common to clinical stage companies in the biopharmaceutical industry, including dependence on the clinical success of its product candidates, ability to obtain regulatory approvals of its product candidates, compliance with regulatory requirements, the need for substantial additional financing and protection of its proprietary technology.

Going Concern Considerations

The Company incurred losses from operations and had negative cash flows from operating activities for the three and six months ended June 30, 2021, and the Company’s accumulated deficit at June 30, 2021 was $152.5 million. The Company’s current operating plan indicates it will continue to incur losses from operations and generate negative cash flows from operating activities given expected ongoing expenditures related to research and development and the Company’s lack of revenue-generating activities at this point in the Company’s life cycle. Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

In March 2021, the Company decided not to proceed with the significant investment required to initiate two Phase 3 clinical trials for GB-102 in late 2021. As a result, management continues to believe that the Company’s current cash, cash equivalents and short-term investments are adequate to meet its cash needs for at least 12 months from the issuance date of this Form 10-Q. The Company will seek to raise additional funds in order to further advance its research and development programs other than GB-102, operate its business, secure research and development collaborations, and meet its obligations as they come due. The Company is pursuing financing alternatives, similar to what the Company has previously executed, which include equity financing. Such sources of capital may not, however, be available to the Company in the necessary time frame, in the amounts that the Company requires, on terms that are acceptable to the Company, or at all. If the Company is unable to raise the necessary funds when needed or reduce spending on currently planned activities, it may not be able to continue the development of its products or the Company could be required to delay, scale back, or eliminate some or all of its research and development programs and other operations, which may materially harm its business, financial position and results of operations.

COVID-19 Pandemic

The impact of the worldwide spread of a novel strain of coronavirus (“COVID-19”) has been unprecedented and unpredictable, including the emergence of new variants of the coronavirus, such as the Delta variant, and resurgences in number and rates of infections, but based on the Company’s current assessment, the Company does not expect any material impact on its long-term strategic plans, operations, or its liquidity due to the worldwide spread of COVID-19. However, the Company is continuing to assess the effect on its operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world and its assessment of the impact of COVID-19 may change.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements contained in this Quarterly Report on Form 10-Q have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission, or SEC, and, therefore, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, have been omitted.

In the opinion of management, the information reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for the full year. The condensed balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all information and footnotes required by GAAP for complete financial statements. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 5, 2021.

9


 

Use of Estimates  

The preparation of condensed financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to accrued research and development expenses, other long-lived assets, stock-based compensation and the valuation of deferred tax assets.

The Company bases its estimates using historical experience, Company forecasts and future plans, current economic conditions, and information from third-party professionals that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not readily apparent from other sources, and adjusts those estimates and assumptions when facts and circumstances dictate.

Related Party Transactions

In August 2019, the Company engaged a consulting firm managed by the then-acting chief financial officer of the Company for professional services related to finance and other administrative functions. For the three and six months ended June 30, 2020, the costs incurred under this arrangement totaled $117,000 and $444,000, respectively. These costs were recorded as general and administrative expense in the accompanying condensed statements of operations. The Company terminated its relationship with this entity in September 2020.

3. Fair Value Measurements

The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

 

Level 1: Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

 

Level 2: Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability. 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 are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values (in thousands):

 

 

 

June 30, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds

 

$

3,077

 

 

 

 

 

 

 

 

$

3,077

 

Commercial paper

 

 

 

 

 

4,000

 

 

 

 

 

 

4,000

 

Total cash equivalents

 

 

3,077

 

 

 

4,000

 

 

 

 

 

 

7,077

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

 

 

 

4,740

 

 

 

 

 

 

4,740

 

Commercial paper

 

 

 

 

 

58,972

 

 

 

 

 

 

58,972

 

U.S. Treasury notes

 

 

 

 

 

2,010

 

 

 

 

 

 

2,010

 

Total short-term investments

 

 

 

 

 

65,722

 

 

 

 

 

 

65,722

 

Non-Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt securities

 

 

 

 

 

 

1,128

 

 

 

 

 

 

 

1,128

 

U.S. Treasury notes

 

 

 

 

 

 

3,500

 

 

 

 

 

 

 

3,500

 

Total long-term investments