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Investments

9 Months Ended

Sep. 30, 2020

The Company follows the provisions of Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures, for its financial assets and liabilities, and for its non-financial assets and liabilities subject to fair value measurements. ASC 820 provides a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards that permit, or in some cases, require estimates of fair-market value. This standard also expanded financial statement disclosure requirements with respect to a company’s use of fair-value measurements, including the effect of such measurements on earnings. The cost of securities sold is based on the specific identification method.

The Company determines the fair value of its government securities, asset-backed securities, municipal bonds, and corporate bonds by utilizing monthly valuation statements that are provided by its broker. The broker determines the investment valuation by utilizing the bid price in the market and also refers to third party sources to validate valuations, and as such are classified as Level 2 assets.

The Company's certificates of deposit are classified as available for sale and are considered as Level 1 assets. These investments are carried at cost, which approximates fair value.

The Company also periodically makes technology investments in certain non-consolidated third-parties. These equity investments are accounted for in accordance with ASC 321, Investments - Equity Securities. Equity investments that do not have readily determinable fair values, and where the Company has not identified any observable events that would cause adjustment of the valuation to date, such equity investments are held at cost. These technology investments totaled approximately $8.6 million and $9.0 million as of September 30, 2020 and December 31, 2019, respectively. These investments are classified within Long-Term Investments in the consolidated balance sheet.

Assets or liabilities that have recurring fair value measurements are shown below as of September 30, 2020 and December 31, 2019:

As of September 30, 2020:


			Fair Value Measurements at Reporting Date Using
	Total as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	September 30, 2020		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	400,499,542	$	400,499,542	$	—	$	—
Short-Term Investments:
Certificate of Deposit	1,270,465		1,270,465		—		—
Corporate Bonds	14,105,245		—		14,105,245		—
Government Securities	23,235,183		—		23,235,183		—
Municipal Bonds	11,025,844		—		11,025,844		—
Other	2,941,743		2,941,743		—		—
Long-Term Investments:
Asset Backed Securities	42,012,670		—		42,012,670		—
Certificate of Deposit	3,913,968		3,913,968		—		—
Corporate Bonds	8,975,930		—		8,975,930		—
Government Securities	—		—		—		—
Municipal Bonds	95,487,532		—		95,487,532		—


Total	$	603,468,122	$	408,625,718	$	194,842,404	$	—

As of December 31, 2019:


			Fair Value Measurements at Reporting Date Using
	Total as of		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	December 31, 2019		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	296,321,622	$	296,321,622	$	—	$	—
Short-Term Investments:
Certificate of Deposit	50,099,795		50,099,795		—		—
Corporate Bonds	29,219,685		—		29,219,685		—
Government Securities	58,432,823		—		58,432,823		—
Other	2,631,750		2,631,750		—		—

Long-Term Investments:
Asset-backed Securities	25,791,029		—		25,791,029		—
Certificate of Deposit	3,557,798		3,557,798				—
Corporate Bonds	22,815,998		—		22,815,998		—
Governmental Securities	6,088,190		—		6,088,190		—
Municipal Bonds	72,638,690		—		72,638,690		—
Total	$	567,597,380	$	352,610,965	$	214,986,415	$	—

The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of September 30, 2020 and December 31, 2019:

As of September 30, 2020:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	1,252,187	$	18,278	$	—	$	1,270,465
Corporate Bonds	13,970,360		134,885		—		14,105,245
Government Securities	23,105,527		129,656		—		23,235,183
Municipal Bonds	10,864,899		160,945		—		11,025,844
Other	2,941,743		—		—		2,941,743
Long-Term Investments:
Asset Backed Securities	41,521,603		1,086,633		(595,566)		42,012,670
Certificate of Deposit	3,754,312		159,656		—		3,913,968
Corporate Bonds	8,598,910		377,020		—		8,975,930

Municipal Bonds	89,916,703		5,580,670		(9,841)		95,487,532
Total	$	195,926,244	$	7,647,743	$	(605,407)	$	202,968,580

As of December 31, 2019:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	50,099,795	$	—	$	—	$	50,099,795
Corporate Bonds	29,025,624		194,061		—		29,219,685

Government Securities	58,343,911		99,917		(11,005)		58,432,823
Other	2,631,750		—		—		2,631,750
Long-Term Investments:
Asset-backed Securities	25,971,156		—		(180,127)		25,791,029
Certificate of Deposit	3,500,000		58,808		(1,010)		3,557,798
Corporate Bonds	22,306,130		509,868		—		22,815,998
Government Securities	6,012,705		75,485		—		6,088,190
Municipal Bonds	71,997,996		1,036,116		(395,422)		72,638,690

Total	$	269,889,067	$	1,974,255	$	(587,564)	$	271,275,758

Unrealized losses on investments as of September 30, 2020, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value
Loss duration of less than one year	$	605,407	$	24,572,356
Loss duration of greater than one year	—		—
Total	$	605,407	$	24,572,356

Unrealized losses on investments as of December 31, 2019, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value
Loss duration of less than one year	$	587,564	$	90,721,081
Loss duration of greater than one year	—		—
Total	$	587,564	$	90,721,081

As stated in Note 1, effective January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. The guidance modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. The Company utilized the guidance provided by ASC 326 to determine whether any of the available-for-sale debt securities held by the Company were impaired. No investments were considered to be impaired during the periods presented. The Company has the intention and current ability to hold its debt investments until the amortized cost basis has been recovered.

Fixed income securities as of September 30, 2020 have contractual maturities as follows:


Due within one year	$	49,192,972
Due between one and five years	30,466,413
Due over five years	113,325,115
	$	192,984,500

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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