• Filing Date: 2019-08-13
  • Form Type: 10-Q
  • Description: Quarterly report
v3.19.2
Cash, Cash Equivalent, and Investments
6 Months Ended
Jun. 30, 2019
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalent, and Investments
Cash, Cash Equivalent, and Investments
The Company’s investments in debt securities are classified as held-to-maturity and are recorded at amortized cost, and its investments in money market funds are classified as cash equivalents. The following table shows the Company’s cash, available-for-sale securities, and short-term and long-term investment securities by major security type as of June 30, 2019 and December 31, 2018:
 
June 30, 2019 (Unaudited)
 
 
 
 
 
Gross
 
Gross
 
 
 
Level
 
 
 
Unrealized
 
Unrealized
 
 
 
(1) 
 
Fair Value
 
Holding Gains
 
Holding Losses
 
Adjusted Cost
Cash and Cash Equivalents
 
 
 
 
 
 
 
 
 
Cash
 
 
$
767,894

 
$

 
$

 
$
767,894

Money Market Funds
1
 
4,013,626

 
 
 
 
 
4,013,626

Subtotal
 
 
4,781,520

 

 

 
4,781,520

Short-Term Investment Securities (2)
 
 
 
 
 
 
 
 
 
Corporate Bonds (4)
2
 
32,119,864

 
20,490

 
(4,775
)
 
32,104,149

Long-Term Investment Securities (3)
 
 
 
 
 
 
 
 
 
Corporate Bonds (4)
2
 
1,522,290

 
5,621

 

 
1,516,669

Total
 
 
$
38,423,674

 
$
26,111

 
$
(4,775
)
 
$
38,402,338


 
December 31, 2018 (Audited)
 
 
 
 
 
Gross
 
Gross
 
 
 
Level
 
 
 
Unrealized
 
Unrealized
 
 
 
(1) 
 
Fair Value
 
Holding Gains
 
Holding Losses
 
Adjusted Cost
Cash and Cash Equivalents
 
 

 

 

 

Cash
 
 
$
1,048,272

 
$

 
$

 
$
1,048,272

Money Market Funds
1
 
1,338,042

 

 

 
1,338,042

Subtotal
 
 
2,386,314

 

 

 
2,386,314

Short-Term Investment Securities (2)
 
 

 

 

 

Corporate Bonds (4)
2
 
38,731,120

 

 
(85,321
)
 
38,816,441

Total
 
 
$
41,117,434

 
$

 
$
(85,321
)
 
$
41,202,755

_________________
Notes:
(1) Definition of the three-level fair value hierarchy:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 - Other inputs that are directly or indirectly observable in the markets
Level 3 - Inputs that are generally unobservable
(2) Short-term investment securities will mature within 12 months or less, from the applicable reporting date.
(3) Long-term investment securities will mature between 12 and 18 months, from the applicable reporting date.
(4) The premium paid to purchase held-to-maturity investment securities was $23,308 and $26,014 for the three months ended June 30, 2019 and 2018, respectively. The premium paid to purchase held-to-maturity investment securities was $104,163 and $313,705 for the six months ended June 30, 2019 and 2018, respectively. The premium paid to purchase held-to-maturity investment securities was $378,681 for the year ended December 31, 2018.

The Company considers the declines in market value of its investment portfolio to be temporary in nature. The Company’s investment policy requires investment securities to be investment grade and held to maturity with the primary objective to maintain a high degree of liquidity while maximizing yield. When evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates, and whether it is more likely than not the Company will be required to sell the investment before recovery of the investment’s cost basis. As of June 30, 2019, the Company does not consider any of its investments to be other-than-temporarily impaired.