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, 2016:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	6,249,703	$	6,249,703	$	—	$	6,249,703
Cash equivalents (original maturity of 3 months or less)
FDIC insured deposits and money market funds		24,978,489		24,978,489		—		24,978,489
Cash and cash equivalents	$	31,228,192	$	31,228,192	$	—	$	31,228,192
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	86,078,622	$	86,053,755	$	—	$	86,053,755
Corporate obligations		20,941,799		—		20,925,469		20,925,469
Total short-term investments	$	107,020,420	$	86,053,755	$	20,925,469	$	106,979,224

The following table summarizes the fair value of cash and cash equivalents and investments as of September 30, 2017:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	6,110,170	$	6,110,170	$	—	$	6,110,170
Cash equivalents (original maturity of 3 months or less)
Repurchase agreements		15,000,000		—		15,000,000		15,000,000
Money market funds		14,573,254		14,573,254		—		14,573,254
U.S. government treasury obligations		9,495,984		9,496,720		—		9,496,720
Corporate obligations		1,998,361		—		1,998,361		1,998,361
Cash and cash equivalents	$	47,177,769	$	30,180,144	$	16,998,361	$	47,178,505
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	36,957,883	$	36,953,105	$	—	$	36,953,105
Corporate obligations		18,949,143		—		18,948,624		18,948,624
Total short-term investments	$	55,907,026	$	36,953,105	$	18,948,624	$	55,901,729

All securities held at December 31, 2016 and September 30, 2017, were classified as available-for-sale as defined by ASC 320.

Total unrealized gross gains were $8,257 and $2,623 as of December 31, 2016 and September 30, 2017, respectively. Total unrealized gross losses were $49,453 and $7,183 as of December 31, 2016 and September 30, 2017, 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 losses were $53 for the three and nine months ended September 30, 2016. There were no total realized gross gains for the three or nine months ended September 30, 2016. There were no total realized gross gains or total realized gross losses for the three or nine months ended September 30, 2017.