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 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, 2017:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	2,544,972	$	2,544,972	$	—	$	2,544,972
Cash equivalents (maturity of 3 months or less)
Repurchase agreements		10,000,000		—		10,000,000		10,000,000
Money market funds		6,014,158		6,014,158		—		6,014,158
Cash and cash equivalents	$	18,559,130	$	8,559,130	$	10,000,000	$	18,559,130
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	63,034,548	$	62,970,115	$	—	$	62,970,115
Corporate obligations		15,942,182		—		15,942,182		15,942,182
Total short-term investments	$	78,976,730	$	62,970,115	$	15,942,182	$	78,912,297

The following table summarizes the fair value of cash and cash equivalents and investments as of September 30, 2018:


							Fair Value
Description	Cost		Level 1		Level 2		(Carrying Value)
Cash
Cash	$	7,280,004	$	7,280,004	$	—	$	7,280,004
Cash equivalents (maturity of 3 months or less)
Repurchase agreements		10,000,000		—		10,000,000		10,000,000
Money market funds		35,004,236		35,004,236		—		35,004,236
U.S. government agency obligations		14,984,175		—		14,984,100		14,984,100
Cash and cash equivalents	$	67,268,415	$	42,284,240	$	24,984,100	$	67,268,340
Short-term investments (due within 1 year)
U.S. government treasury obligations	$	187,315,613	$	187,297,850	$	—	$	187,297,850
Corporate obligations		89,649,086		—		89,644,301		89,644,301
Total short-term investments	$	276,964,699	$	187,297,850	$	89,644,301	$	276,942,151

All securities held at December 31, 2017 and September 30, 2018, were classified as available-for-sale as defined by ASC 320.

Total unrealized gross gains were $2,464 at September 30, 2018. There were no unrealized gross gains as of December 31, 2017. Total unrealized gross losses were $64,433 and $25,148 as of December 31, 2017 and September 30, 2018, 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. There were no total realized gross gains or total realized gross losses for the three or nine months ended September 30, 2017 and 2018.