UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.WASHINGTON, DC 20549

FORM 10-Q

For the quarterly period ended March 31, 20202021

OR

For the transition period from to

Commission file number: 001-37695File Number: 001-38549

YUMANITY THERAPEUTICS, INC.

(Exact nameName of registrantRegistrant as specifiedSpecified in its charter)Charter)

Summary of the Material Risks Associated with Our Business

We are subject to various risks associated with our businesses and industries. These risks include the following:

The summary risk factors described above should be read together with the text of the full risk factors below, in the section entitled “Risk Factors” in Part II, Item 1A. and the other information set forth in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes, as well as in other documents that we file with the U.S. Securities and Exchange Commission (“SEC”). The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q or this report, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Statements that are not purely historical are forward-looking statements within the meaning of Section 27A of the U.S. Private Securities Litigation Reform Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Theseamended, that involve substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management, are forward-looking statements are often identified by thestatements. The words “aim,” “anticipate,” “believes,“believe,” “can,“contemplate,” “continue,” “could,” “estimates,“estimate,” “expects,“expect,” “intends,“intend,” “may,” “plans,“might,” “plan,” “potential,” “predicts,“predict,” “project,” “seek,” “should,” “target,” “will,” “would”“would,” or the negative of these termswords or other comparable terminologysimilar expressions are intended to identify forward-looking statements. Thesestatements, although not all forward-looking statements contain these identifying words.

The forward-looking statements in this Quarterly Report on Form 10-Qinclude, but are not limited to,among other things, statements about:

We may not actually achieve the plans, intentions or COVID-19, pandemic, including the expected duration of disruptionexpectations disclosed in our forward-looking statements, and immediate and long-term impact and effectyou should not place undue reliance on our businessforward-looking statements. Actual results or events could differ materially from the plans, intentions and operations; and

Table of Contents

PART I — FINANCIALI—FINANCIAL INFORMATION

PROTEOSTASISItem 1. Financial Statements.

YUMANITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

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

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PROTEOSTASIS THERAPEUTICS, INC.

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

(Unaudited)

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

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PROTEOSTASIS THERAPEUTICS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share amounts)

(Unaudited)

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

PROTEOSTASISYUMANITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSOPERATIONS

(In thousands)thousands, except share/unit and per share/unit amounts)

(Unaudited)

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

YUMANITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

8The accompanying notes are an integral part of these condensed consolidated financial statements.

YUMANITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF PREFERRED UNITS AND STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share/unit amounts)

(Unaudited)

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

YUMANITY THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

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

YUMANITY THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Business and Basis of Presentation

Yumanity Therapeutics, Inc. (formerly Proteostasis Therapeutics, Inc. (the, and together with its wholly owned subsidiaries, the “Company” or “Yumanity”) was incorporated in Delaware on December 13, 2006. The Company is a clinical stage biopharmaceutical company committed toengaged in the discoveryresearch and development of novel therapeutics to treat cystic fibrosis (“CF”) through theratyping, or the process of matching modulators to individual response to treatment regardless of CFTR mutations. CF is a diseasetreatments for neurodegenerative diseases caused by defectsprotein misfolding.

The Company is subject to risks similar to those of other early clinical stage companies in the function or abundancebiopharmaceutical industry, including dependence on key individuals, the need to develop commercially viable products, competition from other companies, many of cystic fibrosis transmembrane conductance regulator (“CFTR”) protein. Although, CF is defined as a monogenic recessive genetic disorder caused by mutations inwhom are larger and better capitalized, the CFTR gene, there is a broad rangeimpact of disease activity for different organ systems in CF, including lung disease, meconium ileus, diabetes,the COVID-19 pandemic and liver disease, even for CF patients who are homozygous for the most common mutation, F508del mutation. In summary, CF genotype does not always match CF phenotype.

Since its inception,need to obtain adequate additional financing to fund the Company has devoted substantially alldevelopment of its efforts to organizing and staffingproduct candidates. There can be no assurance that the Company, business planning, raising capital, acquiring and developing product and technology rights, and conductingCompany’s research and development activities. It has funded its operations to date with proceedswill be successfully completed, that adequate protection for the Company’s intellectual property will be maintained, that any product candidates developed will obtain required regulatory approval or that any approved products will be commercially viable. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from the sale of preferred stock,its products.

Merger with Proteostasis Therapeutics, Inc.

On December 22, 2020, Proteostasis Therapeutics, Inc. (“Proteostasis” or “PTI”) completed its previously announced merger transaction with Yumanity, Inc. (formerly Yumanity Therapeutics, Inc.) in accordance with the issuanceterms of convertible promissory notes, proceeds from its initial public offering in February 2016, proceeds from its follow-on public offerings,the Agreement and payments receivedPlan of Merger and Reorganization, dated as of August 22, 2020, as amended on November 6, 2020 (the “Merger Agreement”), by and among Pangolin Merger Sub, Inc., a wholly-owned subsidiary of Proteostasis (“Merger Sub”), Yumanity Holdings, LLC (“Holdings”) and Yumanity, Inc., pursuant to which Merger Sub merged with and into Yumanity, Inc., with Yumanity, Inc. surviving as a wholly owned subsidiary of Proteostasis (the “Merger”). Immediately prior to the effective time of the Merger, Holdings merged with and into Yumanity, Inc. and Yumanity, Inc. continued to exist as the surviving corporation. On December 22, 2020, in connection with, collaboration agreements and prior to the completion of, the Merger, Proteostasis effected a research grant,1-for-20 reverse stock split of its common stock (the “Reverse Stock Split”). Immediately following the Merger, Proteostasis changed its name to “Yumanity Therapeutics, Inc.”

At the effective time of the Merger (the “Effective Time”), each share of Yumanity Inc.’s common stock, par value $0.01 (the “Yumanity Common Stock”), outstanding immediately prior to the Effective Time was converted into the right to receive shares of PTI based on an exchange ratio set forth in the Merger Agreement. At the Effective Time following the Reverse Stock Split, the exchange ratio was determined to be 0.2108 shares of PTI Common Stock for each share of Yumanity Common Stock (the “Exchange Ratio”). At the closing of the Merger on December 22, 2020, PTI issued an aggregate of 6,024,433 shares of its common stock to Yumanity, based on the Exchange Ratio. In addition, all options and warrants exercisable for shares of common stock of Yumanity, Inc. became options and warrants exercisable for shares of common stock of PTI equal to the Exchange Ratio multiplied by the number of shares of Yumanity Inc.’s common stock previously represented by such stock options and warrants, as wellapplicable, with a proportionate adjustment in exercise price. No fractional shares were issued in connection with the Exchange Ratio.

The transaction was accounted for as funds froma reverse merger and as an asset acquisition in accordance with GAAP. Under this method of accounting, Yumanity was deemed to be the saleaccounting acquirer for financial reporting purposes. This determination was primarily based on the fact that, immediately following the Merger: (i) Yumanity’s equity holders owned a majority of the voting rights in the combined organization, (ii) Yumanity designated a majority of the members (7 of 9) of the initial board of directors of the combined organization and (iii) Yumanity’s senior management hold all key positions in the senior management of the combined organization. Accordingly, for accounting purposes, (i) the Merger was treated as the equivalent of the Yumanity issuing stock underto acquire the at-the-market offering program described below. The Company does not have any products approvednet assets of PTI, (ii) the net assets of PTI were allocated a portion of the transaction price and recorded based upon their relative fair values in the financial statements at the time of closing, (iii) the reported historical operating results of the combined organization prior to the Merger will be those of Yumanity and (iv) for sale and has not generated any revenue from product sales.

The Company has not generated any revenue since inception.periods prior to the transaction, shareholders’ equity of the combined organization is presented based on the historical equity structure of Yumanity. As a result, as of the closing date of the Merger, the net assets of PTI were recorded at their acquisition-date fair values in the financial statements of Yumanity and the reported operating results prior to the Merger will be those of Yumanity. As used herein, the words “the Company” refer to, for periods following the Merger, Yumanity Therapeutics, Inc., together with its wholly owned subsidiaries, and for periods prior to the Merger, Holdings, and its wholly owned subsidiary, as applicable.

The Yumanity Reorganization

On December 22, 2020, immediately prior to the closing of the Merger, pursuant to the terms of the Merger Agreement, the Company has incurred recurring lossescompleted the Yumanity Reorganization whereby Holdings, the sole stockholder and requires significant cash resourcesholding company parent of Yumanity, Inc., merged with and into Yumanity, Inc., with Yumanity, Inc. as the surviving corporation. In connection with the Yumanity Reorganization, each outstanding common unit of Holdings was exchanged for shares of common stock of Yumanity, Inc. based upon a ratio associated with the terms of each common unit, each outstanding preferred unit of Holdings was converted into shares of common stock of Yumanity, Inc. based upon the ratio associated with each individual series of preferred units, each outstanding option to executepurchase shares of common units of Holdings was converted into an outstanding option to purchase shares of common stock of Yumanity, Inc. on a 1-for-1 basis, with a corresponding adjustment to the exercise price, and each outstanding warrant to purchase preferred units or common units of Holdings was converted into a warrant to purchase shares of common stock of Yumanity, Inc. based upon the ratio associated with each individual series of preferred units or on a 1-for-1 basis, respectively, with a corresponding adjustment to the exercise price, as applicable.

Basis of presentation

The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying condensed consolidated financial statements include the accounts of the Company and its business plans. In accordance with ASC 205-40, wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Unless otherwise noted, all references to common stock/unit share and per share amounts have also been adjusted to reflect the Exchange Ratio.

Going Concern (“ASC 205-40”), theconcern

The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the original issuance date of the condensed consolidated financial statements are issued. As of March 31, 2020,statements.

Since its inception, the Company had an accumulated deficit of $346.5 million.has funded its operations primarily with equity and debt including proceeds from the Merger. The Company has incurred recurring losses and negative cash flows from operations since its inception. Duringinception, including net losses of $8.7 million for the three monthsthree-month period ended March 31, 2020,2021. In addition, as of March 31, 2021, the Company incurred losseshad an accumulated deficit of $9.9 million and used $13.6 million of cash in operations. $156.5 million. The Company expects that itsto continue to generate operating losses and negative cash flows will continue for the foreseeable future. TheAs of March 31, 2021, the Company currently expects that its cash, cash equivalents and short-term investments of $57.1 millionmarketable securities will be sufficient to fund its operating expenses, capital expenditure requirements and capital requirements, based upon its current operating plan, for at least 12 months fromdebt service payments into the date that these financial statements are issued. However, additional funding will be necessary to fund its proposed Phase 3 Modulator Options to RestorE CFTR (“MORE”) trial and to advance the Company’s proprietary combination therapy candidates through regulatory approval and into commercialization, if approved. third quarter of 2022.

The Company will seekrequire additional financing to fund operations and plans to obtain additional funding through private or public equity financings, debt financings, collaboration agreements,or other capital sources, including collaborations with other companies or other strategic alliances and licensing arrangements. Although the Company has been successful in raising capital in the past, theretransactions. There is no assurance that itthe Company will be successful in obtaining such additional financingsufficient funding on terms acceptable to the Company to fund continuing operations, if at all, and the Company may not be able to enter into collaborations or other arrangements. The novel coronavirus (“COVID-19”) pandemic continues to rapidly evolve and has already resulted in a significant disruption of global financial markets. If the disruption persists and deepens, the Company could experience an inability to access additional capital, when and if needed.all. If the Company is unable to obtain additional funding, the Company couldwill be forced to delay, reduce or eliminate some or all of its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects, or the Company may be unable to continue operations.

At-the-Market Offering ProgramImpact of the COVID-19

In MayThe COVID-19 pandemic, which began in December 2019 and has spread worldwide, has caused many governments to implement measures to slow the spread of the outbreak. The outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, and facilities and production have been suspended. The future progression of the pandemic and its effects on the Company’s business and operations are uncertain. The COVID-19 pandemic may affect the Company’s ability to initiate and complete preclinical studies, delay its clinical trial or future clinical trials, disrupt regulatory activities, or have other adverse effects on its business and operations. The pandemic has already caused significant disruptions in the financial markets, and may continue to cause such disruptions, which could impact the Company’s ability to raise additional funds to support its operations. Moreover, the pandemic has significantly impacted economies worldwide and could result in adverse effects on the Company’s business and operations.

The Company is monitoring the potential impact of the COVID-19 pandemic on its business and financial statements. To date, the Company entered into a sales agreement with H.C. Wainwright & Co., LLC (“HCW”) with respect to an at-the-market (“ATM”) offering program under whichhas not experienced material business disruptions or incurred impairment losses in the Company may issue and sell, from time-to-time at its sole discretion, sharescarrying values of its common stock, in an aggregate offering amount of up to $56.6 million (the “HCW ATM program”). HCW acts as the Company’s sales agent and will use commercially reasonable efforts to sell shares of common stock from time-to-time, based upon instruction from the Company. Common stock will be sold at prevailing market prices at the time of the sale, andassets as a result prices may vary. The Company will pay HCW up to 3% of the gross proceeds frompandemic and it is not aware of any common stock sold through the sales agreement. As of December 31, 2019, the Company sold 987,653 shares ofspecific related event or circumstance that would require it to revise its common stock for total net proceeds of approximately $3.5 million under the HCW ATM program.estimates

reflected in these condensed consolidated financial statements. The Company did not sell any shares of its common stock under the ATM program during the three months ended March 31, 2020.

In March 2018, the Company entered into a sales agreement with Leerink Partners LLC (“Leerink”) with respectextent to an ATM offering program under which the Company could have issuedCOVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and sold, from timefinancial condition, including current and future clinical trials and research and development costs, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19, the actions taken to time at its sole discretion, sharescontain or treat it, and the duration and intensity of its common stock, in an aggregate offering amountthe related effects.

2. Summary of up to $50.0 million. As of March 31, 2019, the Company had sold an aggregate of 3,475,166 shares of its common stock for total net proceeds of approximately $21.6 million under the ATM program. Effective April 7, 2019, the Company terminated this ATM offering program.Significant Accounting Policies

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Unaudited Interim Financial Information

The condensed balance sheet as of December 31, 20192020 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The accompanying condensed financial statements, as of March 31, 20202021 and for the three months ended March 31, 2020,2021, are unaudited and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 20192020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20192020 filed with the SEC on March 10, 2020.31, 2021. In the opinion of management, all adjustments, consisting only of normal recurring adjustments as necessary for thea fair statement of the Company’s condensed consolidated financial position as of March 31, 2020,2021 and condensed consolidated results of its operations for the three months ended March 31, 2020, and cash flows for the three months ended March 31, 2021 and 2020 have been made. The results of operations for the three months ended March 31, 20202021 are not necessarily indicative of the results of operations tothat may be expected for the year ending December 31, 2020.2021.

Summary of Significant Accounting Policies

The Company’s significant accounting policies, which are disclosed in the audited consolidated financial statements for the year ended December 31, 20192020 and the notes thereto, are included in the Company’s Annual Report on Form 10-K that was filed with the SEC on March 10, 2020.31, 2021. There were no changes to significant accounting policies during the three months ended March 31, 2020, except for the items noted below.2021.

Risks and Uncertainties

The Company is monitoring the potential impact of COVID-19, if any, on the carrying value of certain assets. To date, the Company has not experienced material business disruption, nor has it incurred impairment of any assets as a result of COVID-19. The extent to which these events may impact the Company’s business, clinical development and regulatory efforts, and the value of its common stock, will depend on future developments, which are highly uncertain and cannot be predicted at this time. The duration and intensity of these impacts and resulting disruption to the Company’s operations is uncertain and the Company will continue to assess the financial impact

In addition, the Company is subject to other challenges and risks specific to its business and its ability to execute on its business plan and strategy, as well as risks and uncertainties common to companies in the biopharmaceutical industry with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its late-stage product candidates; delays or problems in obtaining clinical supply, loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; biopharmaceutical product development and the inherent uncertainty of clinical success; and the challenges of complying with applicable regulatory requirements.  In addition, to the extent the ongoing COVID-19 pandemic adversely affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Use of Estimatesestimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, revenue recognition, the accrual forof research and development expenses, the valuation of common units prior to the Merger and the valuation of common stockstock/unit-based awards. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the derivative liability. Estimatescircumstances. On an ongoing basis, management evaluates its estimates as there are periodically reviewed in light of changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results couldmay differ from those estimates.estimates or assumptions.

Recently IssuedFair value measurements

Certain assets and Adopted Accounting Pronouncementsliabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

ASU No. 2018-13, Fair Value Measurement (Topic 820): Changes

The Company’s cash equivalents and marketable securities are carried at fair value, determined according to the Disclosure Requirements for Fair Value Measurementfair value hierarchy described above (see Note 3). The carrying values of the Company’s accounts payable and accrued expenses approximate their fair values due to the short-term nature of these liabilities. The carrying value of the Company’s long-term debt under its loan and security agreement approximates its fair value due to its variable interest rate.

Recently issued accounting pronouncements

In August 2018,December 2019, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes2019-12,Income Taxes—Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The new standard modifies the disclosure requirements on fair value measuregeneral principles in Topic 820, including removals740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing disclosures, modifications of existing disclosures, and additions of new disclosures. Certain amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair values measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim of annual period presented in the initial fiscal year of adoption. All other amendments should be

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applied retrospectively to all periods presented upon their effective date. Early adoption is permitted for any removed or modified disclosure. The new standardguidance. ASU 2019-12 is effective for thepublic business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company onadopted this standard as of January 1, 2020.2021, and depending on the amendment, adoption was applied on a retrospective, modified retrospective, or prospective basis. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial position or results of operations.statements and related disclosures.

Recently Issued Accounting Pronouncements

ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

In June 2016,March 2020, the FASB issued ASU No. 2016-13,Accounting Standards Update (“ASU”) Financial Instruments - Credit Losses (Topic 326): Measurement2020-04—Facilitation of Credit Lossesthe Effects of Reference Rate Reform on Financial Instruments (“ASU 2016-13”)Reporting (ASC Topic 848). This authoritative guidance provides optional relief for companies preparing for the discontinuation of interest rates such as LIBOR, which is expected to be phased out at the end of calendar 2021, and applies to lease contracts, hedging instruments, held-to-maturity debt securities and debt arrangements that have LIBOR as the benchmark rate. This guidance can be applied for a limited time, as of the beginning of the interim period that includes March 12, 2020 or any date thereafter, through December 31, 2022. The guidance may no longer be applied after December 31, 2022. In January 2021, the FASB subsequently issued authoritative guidance that makes amendments to ASU 2016-13, which have the same effective date and transition datenew rules on accounting for reference rate reform. The amendments clarify that all derivative instruments affected by the changes to interest rates used for discounting, margining or contract price alignment, regardless of January 1, 2022, as the Company is a smaller reporting company. These standards require that credit losses be reported using anwhether they reference LIBOR, or another rate expected losses model rather than the incurred losses model that is currently used, and establishes additional disclosures related to credit risks. For available-for-sale debt securities with unrealized losses, these standards now require allowances to be recorded insteaddiscontinued as a result of reducing the amortized cost of the investment. These standards limit the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. Based on the composition of the Company’s investment portfolio and other financial assets, current market conditions and historical credit loss activity,reference rate reform, an entity may apply certain practical expedients in ASC Topic 848. The Company anticipates that the adoption of these standards isthe guidance will not expected to have a material impact on results of operations and related disclosures.

The following table summarizes the Company’s short-term investments as of March 31, 2020 and December 31, 2019 (in thousands):condensed consolidated financial statements

Short-term investments represent holdings of available-for-sale debt securities and are reported at fair value with unrealized gains and losses reported net of taxes, if material, in other comprehensive income. The Company did not have any realized gains or losses on its short-term investments for the three months ended March 31, 2020 and 2019. There were no other-than-temporary impairments recognized for the three months ended March 31, 2020 and 2019.

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4.3. Fair Value of Financial AssetsMeasurements and LiabilitiesMarketable Securities

The following tables present information about the Company’s financialfair value hierarchy for its assets and liabilities, which are 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):