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FAIR VALUE OF FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2020
FAIR VALUE OF FINANCIAL INSTRUMENTS  
FAIR VALUE OF FINANCIAL INSTRUMENTS

4.    FAIR VALUE OF FINANCIAL INSTRUMENTS

 

ASC 820, Fair Value Measurements, defines fair value, establishes a framework for measuring fair value and requires additional disclosures regarding certain fair value measurements.  ASC 820 establishes a three-tier hierarchy for measuring fair value, as follows:

 

·

Level 1 – quoted market prices in active markets for identical assets and liabilities

 

·

Level 2 – inputs other than quoted prices that are directly or indirectly observable

 

·

Level 3 - unobservable inputs where there is little or no market activity

 

The following tables summarize the values of assets designated as Investments in debt and equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

    

Level 1

    

Level 2

    

Level 3

    

Total

Equity securities

 

$

2,894,835

 

$

 —

 

$

 —

 

$

2,894,835

Mutual funds and exchange traded funds

 

 

6,785,155

 

 

—

 

 

 —

 

 

6,785,155

Certificates of deposit

 

 

—

 

 

1,080,840

 

 

 —

 

 

1,080,840

 

 

$

9,679,990

 

$

1,080,840

 

$

 —

 

$

10,760,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

Level 1

    

Level 2

    

Level 3

    

Total

Equity securities

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Mutual funds and exchange traded funds

 

 

6,708,746

 

 

—

 

 

 —

 

 

6,708,746

Certificates of deposit

 

 

—

 

 

1,062,914

 

 

 —

 

 

1,062,914

 

 

$

6,708,746

 

$

1,062,914

 

$

 —

 

$

7,771,660

 

The Company holds high-grade ETFs, mutual funds, individual equity stocks (predominately in the energy sector), and debt securities as investments.  These assets are readily marketable and are carried at fair value as of the date of the Condensed Balance Sheets. The Company intends to hold these assets for possible future operating requirements. The following table summarizes gross unrealized gains and losses from Investments in debt and equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

    

 

 

    

Gross Unrealized

    

Aggregate

 

 

Cost

 

Gains

    

Losses

 

Fair Value

Equity securities

 

$

2,039,148

 

$

855,687

 

$

 —

 

$

2,894,835

Mutual funds and exchange traded funds

 

 

6,671,607

 

 

113,548

 

 

 —

 

 

6,785,155

Certificates of deposit

 

 

1,050,000

 

 

30,840

 

 

 —

 

 

1,080,840

 

 

$

9,760,755

 

$

1,000,075

 

 

 —

 

$

10,760,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

    

 

 

    

Gross Unrealized

 

Aggregate

 

 

Cost

 

Gains

    

Losses

    

Fair Value

Equity securities

 

$

 —

 

$

 —

 

$

 —

 

$

 —

Mutual funds and exchange traded funds

 

 

6,592,345

 

 

116,401

 

 

 —

 

 

6,708,746

Certificates of deposit

 

 

1,050,000

 

 

12,914

 

 

 —

 

 

1,062,914

 

 

$

7,642,345

 

$

129,315

 

 

 —

 

$

7,771,660

 

 

 

Unrealized gains on investments in debt and equity securities were $870,760 and $102,128 for the six months ended June 30, 2020 and 2019, respectively.