Marketable Securities and Fair Value Measurements

9 Months Ended

Jun. 30, 2022

Investments, Debt and Equity Securities [Abstract]

Marketable Securities and Fair Value Measurements

Note 2 - Marketable Securities and Fair Value Measurements

Marketable debt and equity securities are categorized as trading securities and are thus marked to market and stated at fair value. Fair value is determined using the quoted closing or latest bid prices for Level 1 investments and market standard valuation methodologies for Level 2 investments. Realized gains and losses on investment transactions are determined by specific identification and are recognized as incurred in the condensed consolidated statements of operations. Net changes in

unrealized

gains and losses are

reporte

d in the condensed consolidated statements of operations in the current period.

Fair Value Measurements

The fair value of financial instruments is presented based upon a hierarchy of levels that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The fair value of marketable equity securities (stocks), mutual funds, exchange-traded funds, government securities, and cash and money funds, are substantially based on quoted market prices (Level 1). Corporate bonds are valued using market standard valuation methodologies, including: discounted cash flow methodologies, and matrix pricing or other similar techniques. The inputs to these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, maturity, estimated duration and assumptions regarding liquidity and estimated future cash flows. In addition to bond characteristics, the valuation methodologies incorporate market data, such as actual trades completed, bids and actual dealer quotes, where such information is available. Accordingly, the estimated fair values are based on available market information and judgments about financial instruments (Level 2). Fair values of the Level 2 investments are provided by the Company’s professional investment management firms. From time to time the Company may transfer cash between its marketable securities portfolio and operating cash and cash equivalents.

The following table sets forth, by level, within the fair value hierarchy, the Company’s marketable securities measured at fair value as of June 30, 2022:


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	15,457,000	$	—	$	—	$	15,457,000
Mutual Funds		10,767,000		—		—		10,767,000
Exchange-Traded Funds		5,450,000		—		—		5,450,000
Corporate Bonds		—		28,669,000		—		28,669,000
Government Securities		27,949,000		—		—		27,949,000
Cash and Money Funds		2,824,000		—		—		2,824,000

Total	$	62,447,000	$	28,669,000	$	—	$	91,116,000

Net unrealized losses reported during the quarter and nine months ended June 30, 2022, were $(3,855,000) and $(5,386,000), respectively. There were no transfers of investments between Level 1 and Level 2 during the nine months ended June 30, 2022.

The following table sets forth by level, within the fair value hierarchy, the Company’s assets measured at fair value as of September 30, 2021:


	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Equities	$	14,734,000	$	—	$	—	$	14,734,000
Mutual Funds		10,357,000		—		—		10,357,000
Exchange-Traded Funds		9,458,000		—		—		9,458,000
Corporate Bonds		—		24,853,000		—		24,853,000
Government Securities		30,999,000		—		—		30,999,000
Cash and Money Funds		4,575,000		—		—		4,575,000

Total	$	70,123,000	$	24,853,000	$	—	$	94,976,000

Net unrealized gains and (losses) reported during the quarter and nine months ended June 30, 2021, were $(219,000) and $2,284,000, respectively. There were no transfers of investments between Level 1 and Level 2 during the nine months ended June 30, 2021.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, customer deposits and accrued expenses approximate fair value because of the short-term nature of these items.