5. Investments

The Company applies the fair value measurement and disclosure provisions of ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. Investments consist primarily of investments with original maturities greater than three months, but no longer than 24 months when purchased.

ASC 820 establishes a three-level valuation hierarchy for fair value measurements. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 — Valuation is based on quoted prices for identical assets or liabilities in active markets.

Level 2 — Valuation is based on quoted prices for similar assets or liabilities in active markets, or other inputs that are observable for the asset or liability, either directly or indirectly, for the full term of the financial instrument.

Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The fair value of the Company’s fixed income securities is based on a market approach using quoted market values.

The following table summarizes the fair value of cash and cash equivalents and investments as of December 31, 2015:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	5,154,191	$	5,154,191	$	—	$	5,154,191
Cash equivalents
FDIC insured deposits and money market funds		10,277,431		10,277,431		—		10,277,431
Cash and cash equivalents	$	15,431,622	$	15,431,622	$	—	$	15,431,622
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	73,593,081	$	73,560,085	$	—	$	73,560,085
U.S. government agency obligations		55,702,099		55,670,043		—		55,670,043
Corporate obligations		28,953,051		—		28,938,704		28,938,704
Total short-term investments	$	158,248,231	$	129,230,128	$	28,938,704	$	158,168,832

The following table summarizes the fair value of cash and cash equivalents and investments as of September 30, 2016:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	7,441,394	$	7,441,394	$	—	$	7,441,394
Cash equivalents
FDIC insured deposits and money market funds		27,291,388		27,291,388		—		27,291,388
Cash and cash equivalents	$	34,732,782	$	34,732,782	$	—	$	34,732,782
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	79,555,312	$	79,590,040	$	—	$	79,590,040
U.S. government agency obligations		8,026,091		8,027,400		—		8,027,400
Corporate obligations		24,370,746		—		24,366,349		24,366,349
Total short-term investments	$	111,952,149	$	87,617,440	$	24,366,349	$	111,983,789

All securities held at December 31, 2015 and September 30, 2016, were classified as available-for-sale as defined by ASC 320.

Total unrealized gross gains were $5,690 and $44,544 as of December 31, 2015 and September 30, 2016, respectively. Total unrealized gross losses were $85,089 and $12,904 as of December 31, 2015 and September 30, 2016, respectively. The Company does not consider any of the unrealized losses to be other-than-temporary impairments because the Company has the intent and ability to hold investments until they recover in value. Total realized gross gains were $1,667 for the nine months ended September 30, 2015. There were no total realized gross gains for the nine months ended September 30, 2016. Total realized gross losses were $53 for the nine months ended September 30, 2016. There were no total realized gross losses for the nine months ended September 30, 2015.