10-Q 1 prdo-10q_20220331.htm 10-Q prdo-10q_20220331.htm
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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 MARCH 31, 2022

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: 0-23245

 

PERDOCEO EDUCATION CORPORATION

(Exact name of registrant as specified in its charter)

 

 

Delaware

36-3932190

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

231 N. Martingale Road

Schaumburg, Illinois

60173

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (847781-3600

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

 

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, $0.01 par value

 

PRDO

 

Nasdaq Global Select 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, a 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  

Number of shares of registrant’s common stock, par value $0.01, outstanding as of May 2, 2022: 68,779,291

 


 

PERDOCEO EDUCATION CORPORATION

FORM 10-Q

TABLE OF CONTENTS

 

 

 

 

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

 

 

Item 1.

Financial Statements

 

 

 

 

 

Condensed Consolidated Balance Sheets

1

 

 

 

 

Condensed Consolidated Statements of Income (Unaudited)

2

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

2

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

3

 

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

4

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

5

 

 

 

Item 2.

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

16

 

 

 

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

26

 

 

 

Item 4.

Controls and Procedures

26

 

 

PART II—OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

28

 

 

 

Item 1A.

Risk Factors

28

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 6.

Exhibits

28

 

 

SIGNATURES

30

 

 

 


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

 

 

December 31,

 

(In Thousands, Except Share and Per Share Amounts)

 

2022

 

 

2021

 

ASSETS

 

(unaudited)

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents, unrestricted

 

$

190,443

 

 

$

319,982

 

Restricted cash

 

 

1,210

 

 

 

5,196

 

Total cash, cash equivalents and restricted cash

 

 

191,653

 

 

 

325,178

 

Short-term investments

 

 

307,620

 

 

 

174,213

 

Total cash and cash equivalents, restricted cash and short-term investments

 

 

499,273

 

 

 

499,391

 

Student receivables, gross

 

 

74,869

 

 

 

79,418

 

Allowance for credit losses

 

 

(40,765

)

 

 

(36,385

)

Student receivables, net

 

 

34,104

 

 

 

43,033

 

Receivables, other

 

 

8,845

 

 

 

1,692

 

Prepaid expenses

 

 

9,874

 

 

 

6,919

 

Inventories

 

 

1,405

 

 

 

904

 

Other current assets

 

 

2,702

 

 

 

2,514

 

Total current assets

 

 

556,203

 

 

 

554,453

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS:

 

 

 

 

 

 

 

 

Property and equipment, net of accumulated depreciation of $116,927 and $113,711

   as of March 31, 2022 and December 31, 2021, respectively

 

 

27,956

 

 

 

28,355

 

Right of use asset, net

 

 

34,535

 

 

 

36,664

 

Goodwill

 

 

162,579

 

 

 

162,579

 

Intangible assets, net of amortization of $10,328 and $8,662 as of March 31, 2022 and December 31, 2021, respectively

 

 

30,542

 

 

 

32,208

 

Student receivables, gross

 

 

4,206

 

 

 

4,242

 

Allowance for credit losses

 

 

(2,892

)

 

 

(2,870

)

Student receivables, net

 

 

1,314

 

 

 

1,372

 

Deferred income tax assets, net

 

 

24,128

 

 

 

25,114

 

Other assets

 

 

6,570

 

 

 

6,688

 

TOTAL ASSETS

 

$

843,827

 

 

$

847,433

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability-operating

 

$

8,355

 

 

$

9,400

 

Accounts payable

 

 

12,135

 

 

 

10,838

 

Accrued expenses:

 

 

 

 

 

 

 

 

Payroll and related benefits

 

 

17,648

 

 

 

25,312

 

Advertising and marketing costs

 

 

9,971

 

 

 

8,690

 

Income taxes

 

 

10,982

 

 

 

211

 

Other

 

 

12,148

 

 

 

15,180

 

Deferred revenue

 

 

39,108

 

 

 

70,613

 

Total current liabilities

 

 

110,347

 

 

 

140,244

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Lease liability-operating

 

 

33,757

 

 

 

35,549

 

Other liabilities

 

 

21,343

 

 

 

21,530

 

Total non-current liabilities

 

 

55,100

 

 

 

57,079

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding

 

 

-

 

 

 

-

 

Common stock, $0.01 par value; 300,000,000 shares authorized; 89,264,034

   and 88,724,438 shares issued, 68,779,291 and 68,748,662 shares

   outstanding as of March 31, 2022 and December 31, 2021, respectively

 

 

893

 

 

 

887

 

Additional paid-in capital

 

 

677,311

 

 

 

674,242

 

Accumulated other comprehensive loss

 

 

(1,541

)

 

 

(96

)

Retained earnings

 

 

284,050

 

 

 

251,972

 

Treasury stock, at cost; 20,484,743 and 19,975,776 shares as of March 31, 2022

   and December 31, 2021, respectively

 

 

(282,333

)

 

 

(276,895

)

Total stockholders' equity

 

 

678,380

 

 

 

650,110

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

843,827

 

 

$

847,433

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

1


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

 

For the Quarter Ended March 31,

 

(In Thousands, Except Per Share Amounts)

 

2022

 

 

2021

 

REVENUE:

 

 

 

 

 

 

 

 

Tuition and fees, net

 

$

181,327

 

 

$

182,831

 

Other

 

 

1,632

 

 

 

807

 

Total revenue

 

 

182,959

 

 

 

183,638

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Educational services and facilities

 

 

28,088

 

 

 

28,974

 

General and administrative

 

 

106,296

 

 

 

110,045

 

Depreciation and amortization

 

 

4,882

 

 

 

4,002

 

Total operating expenses

 

 

139,266

 

 

 

143,021

 

Operating income

 

 

43,693

 

 

 

40,617

 

 

 

 

 

 

 

 

 

 

OTHER INCOME:

 

 

 

 

 

 

 

 

Interest income

 

 

333

 

 

 

359

 

Interest expense

 

 

(103

)

 

 

(109

)

Miscellaneous (expense) income

 

 

(89

)

 

 

131

 

Total other income

 

 

141

 

 

 

381

 

 

 

 

 

 

 

 

 

 

PRETAX INCOME

 

 

43,834

 

 

 

40,998

 

Provision for income taxes

 

 

11,756

 

 

 

10,245

 

NET INCOME

 

 

32,078

 

 

 

30,753

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - BASIC:

 

$

0.47

 

 

$

0.44

 

 

 

 

 

 

 

 

 

 

NET INCOME PER SHARE - DILUTED:

 

$

0.46

 

 

$

0.43

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

Basic

 

 

68,746

 

 

 

70,149

 

Diluted

 

 

69,567

 

 

 

71,482

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

 

 

For the Quarter Ended March 31,

 

(In Thousands)

 

2022

 

 

2021

 

NET INCOME

 

$

32,078

 

 

$

30,753

 

OTHER COMPREHENSIVE LOSS, net of tax:

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(81

)

 

 

(129

)

Unrealized loss on investments

 

 

(1,364

)

 

 

(221

)

     Total other comprehensive loss

 

 

(1,445

)

 

 

(350

)

COMPREHENSIVE INCOME

 

$

30,633

 

 

$

30,403

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

2


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

 

 

 

 

(In Thousands)

 

Issued Shares

 

 

$0.01 Par

Value

 

 

Purchased Shares

 

 

Cost

 

 

Additional Paid-in Capital

 

 

Comprehensive Loss

 

 

Retained Earnings

 

 

Total

 

BALANCE, January 1, 2022

 

 

88,724

 

 

$

887

 

 

 

(19,976

)

 

$

(276,895

)

 

$

674,242

 

 

$

(96

)

 

$

251,972

 

 

$

650,110

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

32,078

 

 

 

32,078

 

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(81

)

 

 

-

 

 

 

(81

)

Unrealized loss on investments, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,364

)

 

 

-

 

 

 

(1,364

)

Treasury stock purchased

 

 

-

 

 

 

-

 

 

 

(363

)

 

 

(3,828

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,828

)

Share-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,416

 

 

 

-

 

 

 

-

 

 

 

2,416

 

Common stock issued

 

 

540

 

 

 

6

 

 

 

(146

)

 

 

(1,610

)

 

 

653

 

 

 

-

 

 

 

-

 

 

 

(951

)

BALANCE, March 31, 2022

 

 

89,264

 

 

$

893

 

 

 

(20,485

)

 

$

(282,333

)

 

$

677,311

 

 

$

(1,541

)

 

$

284,050

 

 

$

678,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

 

Accumulated Other

 

 

 

 

 

 

 

 

 

(In Thousands)

 

Issued Shares

 

 

$0.01 Par

Value

 

 

Purchased Shares

 

 

Cost

 

 

Additional Paid-in Capital

 

 

Comprehensive Income (Loss)

 

 

Retained Earnings

 

 

Total

 

BALANCE, January 1, 2021

 

 

87,265

 

 

$

873

 

 

 

(17,203

)

 

$

(246,088

)

 

$

658,423

 

 

$

364

 

 

$

142,335

 

 

$

555,907

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

30,753

 

 

 

30,753

 

Foreign currency translation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(129

)

 

 

-

 

 

 

(129

)

Unrealized loss on investments, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(221

)

 

 

-

 

 

 

(221

)

Share-based compensation expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,753

 

 

 

-

 

 

 

-

 

 

 

3,753

 

Common stock issued

 

 

530

 

 

 

5

 

 

 

(160

)

 

 

(2,032

)

 

 

309

 

 

 

-

 

 

 

-

 

 

 

(1,718

)

BALANCE, March 31, 2021

 

 

87,795

 

 

$

878

 

 

 

(17,363

)

 

$

(248,120

)

 

$

662,485

 

 

$

14

 

 

$

173,088

 

 

$

588,345

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

3


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

 

For the Quarter Ended March 31,

 

(In Thousands)

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

32,078

 

 

$

30,753

 

Adjustments to reconcile net income to net

 

 

 

 

 

 

 

 

cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

4,882

 

 

 

4,002

 

Bad debt expense

 

 

13,715

 

 

 

13,719

 

Compensation expense related to share-based awards

 

 

2,416

 

 

 

3,753

 

Deferred income taxes

 

 

986

 

 

 

4,767

 

Changes in operating assets and liabilities

 

 

(31,923

)

 

 

(12,286

)

Net cash provided by operating activities

 

 

22,154

 

 

 

44,708

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Purchases of available-for-sale investments

 

 

(194,997

)

 

 

(126,009

)

Sales of available-for-sale investments

 

 

59,825

 

 

 

64,408

 

Purchases of property and equipment

 

 

(4,742

)

 

 

(1,042

)

Payments for potential business acquisition

 

 

(7,000

)

 

 

-

 

Net cash used in investing activities

 

 

(146,914

)

 

 

(62,643

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Issuance of common stock

 

 

659

 

 

 

314

 

Purchase of treasury stock

 

 

(3,828

)

 

 

-

 

Payments of employee tax associated with stock compensation

 

 

(1,610

)

 

 

(2,032

)

Release of cash held in escrow

 

 

(3,986

)

 

 

-

 

Net cash used in financing activities

 

 

(8,765

)

 

 

(1,718

)

 

 

 

 

 

 

 

 

 

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(133,525

)

 

 

(19,653

)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period

 

 

325,178

 

 

 

109,684

 

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period

 

$

191,653

 

 

$

90,031

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

4


 

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

1. DESCRIPTION OF THE COMPANY

Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. Our accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from associate through doctoral level as well as non-degree professional development and continuing education offerings. Our universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022.

The unaudited condensed consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

         Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIUS.

As of January 1, 2022, the Company began recording income (loss) from discontinued operations within other miscellaneous income (expense) on its unaudited condensed consolidated statements of income as future amounts will be immaterial and infrequent. Prior period amounts are also immaterial and have been recast to maintain comparability.

During the first quarter of 2022, the Company paid an advance deposit related to a potential acquisition which is reflected within other current receivables on its unaudited condensed consolidated balance sheets and as a cash outflow from investing activities on its unaudited condensed consolidated statements of cash flows. The fair value of this note receivable approximates carrying value due to its short term nature and is expected to be offset against the final purchase price should the acquisition close.

 

3. RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting guidance to be adopted in 2023

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU eliminate the Troubled Debt Restructuring (“TDR”) recognition and measurement guidance and, instead, require that an entity evaluate whether the modification represents a new loan or a continuation of an existing loan (consistent with the accounting for other loan modifications). The amendments also enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. For all public business entities, ASU 2022-02 is effective for annual periods and interim periods beginning after December 15, 2022; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.

5


4. FINANCIAL INSTRUMENTS

Investments consist of the following as of March 31, 2022 and December 31, 2021 (dollars in thousands):

 

 

 

March 31, 2022

 

 

 

 

 

 

 

Gross Unrealized

 

 

 

 

 

 

 

Cost

 

 

Gain

 

 

(Loss)

 

 

Fair Value

 

Short-term investments (available for sale):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds

 

$

5,000

 

 

$

-

 

 

$

-

 

 

$

5,000

 

Non-governmental debt securities

 

 

208,401

 

 

 

3

 

 

 

(1,192

)

 

 

207,212

 

Treasury and federal agencies

 

 

95,737

 

 

 

-

 

 

 

(329

)

 

 

95,408

 

Total short-term investments (available for sale)

 

$

309,138

 

 

$

3

 

 

$

(1,521

)

 

$

307,620

 

 

 

 

December 31, 2021

 

 

 

 

 

 

 

Gross Unrealized

 

 

 

 

 

 

 

Cost

 

 

Gain

 

 

(Loss)

 

 

Fair Value

 

Short-term investments (available for sale):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal bonds

 

$

5,028

 

 

$

-

 

 

$

(1

)

 

$

5,027

 

Non-governmental debt securities

 

 

168,623

 

 

 

27

 

 

 

(184

)

 

 

168,466

 

Treasury and federal agencies

 

 

720

 

 

 

-

 

 

 

-

 

 

 

720

 

Total short-term investments (available for sale)

 

$

174,371

 

 

$

27

 

 

$

(185

)

 

$

174,213

 

 

In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.

Our non-governmental debt securities primarily consist of corporate bonds, certificates of deposit and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities prior to maturity and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis.

Fair Value Measurements

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2022, we held investments that are required to be measured at fair value on a recurring basis. These investments (available for sale) consist of municipal bonds, non-governmental debt securities and treasury and federal agencies securities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

All of our available for sale investments were measured under Level 2 as of March 31, 2022 and December 31, 2021. Additionally, money market funds of $51.8 million and $