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INVESTMENTS AND FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 3 – INVESTMENTS AND FAIR VALUE MEASUREMENTS

As of June 30, 2020 and December 31, 2019, funds held for clients invested in available-for-sale securities consisting of government and commercial bonds, including mortgage-backed securities, amounted to $27,591 and $24,136, respectively. As of June 30, 2020 and December 31, 2019, funds held for clients invested in money market funds and other cash equivalents amounted to $47,694 and $48,500, respectively. Additionally, as of June 30, 2020, we had $16,505 in money market funds, classified as cash equivalents. Cash equivalents as of December 31, 2019 were not material.

Investments classified as available-for-sale consisted of the following:

		June 30, 2020
		Amortized Cost				Gross Unrealized Gains (1)				Gross Unrealized Losses (1)				Aggregate Estimated Fair Value
Funds Held for Clients (2)
Certificates of deposit		$	10,046			$	226			$	-			$	10,272
Corporate debt securities			8,960				289				-				9,249
Municipal bonds			6,987				83				-				7,070
US Government agency securities			500				1				-				501
Asset-backed securities			496				3				-				499
Total		$	26,989			$	602			$	-			$	27,591

		December 31, 2019
		Amortized Cost				Gross Unrealized Gains (1)				Gross Unrealized Losses (1)				Aggregate Estimated Fair Value
December 31, 2019
Funds Held for Clients (2)
Certificates of deposit		$	8,828			$	11			$	-			$	8,839
Corporate debt securities			6,883				6				(9	)			6,880
Municipal bonds			6,383				6				(7	)			6,382
US Government agency securities			1,000				-				-				1,000
Asset-backed securities			1,067				-				(32	)			1,035
Total		$	24,161			$	23			$	(48	)		$	24,136

(1)

Unrealized gains and losses on available-for-sale securities are included as a component of comprehensive loss. As of June 30, 2020 and December 31, 2019, there were 79 and 53 securities, respectively, in an unrealized gain position and there were 0 and 18 securities, respectively, in an unrealized loss position. As of June 30, 2020, we had zero unrealized losses. As of December 31, 2019, these unrealized losses were less than $35 individually and $50 in the aggregate. These securities have not been in a continuous unrealized gain or loss position for more than 12 months. We do not intend to sell these investments and we do not expect to sell these investments before recovery of their amortized cost basis, which may be at maturity. We review our investments to identify and evaluate investments that indicate possible other-than-temporary impairment. Factors considered in determining whether a loss is other-than-temporary include the length of time and extent to which fair value has been less than the cost basis, the financial condition and near-term prospects of the investee, and our intent and ability to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value.

(2)

At June 30, 2020 and December 31, 2019, none of these securities were classified as cash and cash equivalents on the accompanying condensed consolidated balance sheets.

Expected maturities of available-for-sale securities as of June 30, 2020 are as follows:

Expected Maturities		Amount

One year or less		$	4,823
After one year through five years			22,768
After five years through 10 years			-
After 10 years			-
		$	27,591

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles and expands disclosures about fair value measurements.

ASC 820 establishes a three-tier fair value hierarchy, which is based on the reliability of the inputs used in measuring fair values. These tiers include:

Level 1:

Quoted prices in active markets for identical assets or liabilities;

Level 2:

Quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active for identical or similar assets or liabilities; and model-driven valuations whose significant inputs are observable; and

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 table presents the fair value hierarchy for our financial assets measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, respectively:

		June 30, 2020
		Total Carrying Value				Quoted Prices in Active Market (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents
Money market funds		$	16,505			$	16,505			$	-			$	-
Funds held for clients
Money market funds			47,694				47,694				-				-
Available-for-sale securities			27,591				-				27,591				-
Total		$	91,790			$	64,199			$	27,591			$	-

		December 31, 2019
		Total Carrying Value				Quoted Prices in Active Market (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Assets:
Funds held for clients
Money market funds		$	48,500			$	48,500			$	-			$	-
Available-for-sale securities			24,136				-				24,136				-
Total		$	72,636			$	48,500			$	24,136			$	-

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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