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Equity Investments

9 Months Ended

Sep. 30, 2018

Equity Investments [Abstract]

EQUITY INVESTMENTS

NOTE 4 - EQUITY INVESTMENTS

At September 30, 2018, equity investments, at fair value, consisted of marketable equity instruments which are treated as a trading security since there is an active market in such equity investment and the Company is actively selling this security. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Realized gains and losses are determined on a specific identification basis and are included in other income (expense). The Company reviews equity investments, at fair value for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

At September 30, 2018, equity investments of $12,767, comprised mainly of nonmarketable stock, loans and stock warrants, are recorded at cost, as adjusted for other than temporary impairment write-downs and are evaluated for impairment periodically.

The following are the Company’s equity investments owned by levels within the fair value hierarchy at September 30, 2018:

		Level 1				Level 2				Level 3				Total
Common Stock		$	391,698			$	-			$	-			$	391,698
LLC Membership			-				-				-				-
Warrants			-				-				-				-
Total Investments		$	391,698			$	-			$	-			$	391,698

The following are the Company’s investments owned by levels within the fair value hierarchy at December 31, 2017:

		Level 1				Level 2				Level 3				Total
Common Stock		$	853,163			$	-			$	200			$	853,363
LLC Membership			-				-				9,194				9,194
Convertible Preferred Stock			-				2,600				-				2,600
Warrants			-				-				455,072				455,072
Total Investments		$	853,163			$	2,600			$	464,466			$	1,320,229

The following additional disclosures relate to the changes in fair value of the Company’s Level 3 investments during the nine months ended September 30, 2018 and 2017 (Investment Company Accounting):

		Nine Months Ended September 30,
		2018				2017
		(Unaudited)				(Unaudited)
Balance at beginning of year		$	464,466			$	474,390
Interest receivable converted to common stock, at cost			-				16,000
Net change in unrealized appreciation on investments			(414,730	)			115,810
Net transfers out of Level 3 (1)			(49,736	)			(100,000	)
Balance at end of period		$	-			$	506,200

		September 30,				December 31,
		2018				2017
		(Unaudited)
Net unrealized depreciation for Level 3 investments at period end		$	-			$	(329,598	)

(1)

Transfers occurred due to the expiration of the restriction under Rule 144A of the Securities Act and to the development of an active market. A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications impacting Level 3 of the fair value hierarchy are reported as transfers in/out of the Level 3 category as of the beginning of the period in which the reclassifications occur.

At December 31, 2017, level 3 investments consisted of the following:

Investment Type		Fair Value at December 31, 2017				Valuation Technique		Unobservable inputs		Input
Common Stock		$	200			Recent Transactions		N/A		N/A
LLC Membership Units		$	9,194			Recent Transactions		N/A		N/A
Warrants		$	455,072			Black-Scholes Option Pricing Model		Volatility		72.8% to 120.4%
		$	464,466

If the price multiple or sales multiple were to increase or decrease, the fair value of the investments would increase or decrease, respectively. If the discount for lack of marketability or restriction discount were to increase or decrease, the fair value of the investments would decrease or increase, respectively.