Fair Value Measurements

12 Months Ended

Dec. 31, 2019

Fair Value Measurements

Fair Value Measurements

Note 4. Fair Value Measurements

We measure fair value based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include the following:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible at the measurement date. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. These inputs include quoted prices for similar assets or liabilities; quoted market prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as consider counterparty credit risk in the assessment of fair value.

We did not elect the fair value option, as allowed, to account for financial assets and liabilities that were not previously carried at fair value. Therefore, material financial assets and liabilities that are not carried at fair value, such as trade accounts receivable and payable, are reported at their historical carrying values.

The carrying values of our assets that are required to be measured at fair value on a recurring basis as of December 31, 2019 and 2018 approximate fair value because of our ability to immediately convert these instruments into cash with minimal expected change in value which are classified in the table below in one of the three categories of the fair value hierarchy described above:

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
December 31, 2019
Cash equivalents:
Money market mutual fund	$	43,687,877	$	—	$	—	$	43,687,877
Marketable equity securities:
Mutual funds		25,966,686		—		—		25,966,686
Available-for-sale debt securities:
U.S. Treasury notes		21,094,100		—		—		21,094,100
	$	90,748,663	$	—	$	—	$	90,748,663

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
December 31, 2018
Cash equivalents:
Money market mutual fund	$	103,427	$	—	$	—	$	103,427
Marketable equity securities:
Mutual funds		2,004,993		—		—		2,004,993
Available-for-sale debt securities:
U.S. Treasury notes		4,957,675		—		—		4,957,675
U.S. Treasury bills		2,968,300		—		—		2,968,300
	$	10,034,395	$	—	$	—	$	10,034,395

Our equity securities and available-for-sale debt securities, including U.S. treasury notes and U.S. treasury bills, are valued using inputs observable in active markets for identical securities and are therefore classified as Level I within the fair value hierarchy.

We did not have any financial liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018.