Investments

3 Months Ended

Mar. 31, 2024

Available for sale securities

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.

On October 4, 2023, the Company entered into a Stock Purchase Agreement to acquire up to 3,137,500 shares of VOXX International Corporation ("VOXX") Class A Common Stock. The Company agreed to purchase the shares in two tranches: (1) on October 6, 2023, the Company purchased 1,568,750 shares of Class A Common Stock at a price of $10 per share, and (2) on January 5, 2024, the Company purchased 1,568,750 shares of Class A Common Stock at a price of $10 per share. The VOXX shares held by the Company are publicly traded and have a readily determinable fair market value and are considered Level 1 assets. The investment is accounted for in accordance with ASC 321, Investments - Equity Securities, with changes in fair value recorded in Investment income, net in consolidated statements of income.

Technology Investments

The Company also periodically makes strategic investments in the non-marketable debt or equity securities of non-consolidated third parties ("technology investments"). Such technology investments totaled approximately $133.9 million as of March 31, 2024, of which $130.4 million and $3.5 million are recorded in long-term investments and short-term investments on the consolidated balance sheet, and $128.0 million as of December 31, 2023, of which $124.6 million and $3.4 million are recorded in long-term investments and short-term investments on the consolidated balance sheet. Depending on the form of investment, and the degree of influence the Company has over the investee, the Company primarily accounts for the technology investments in accordance with ASC 321, Investments- Equity Securities or ASC 323 – Investments – Equity Method and Joint Venture. The Company accounts for equity securities in non-controlled affiliates through which the Company exercises significant influence but do not have control over the investee under the equity method, with the Company’s share of the earnings or losses of non-controlled affiliates recognized within Other (loss) income, net in the Company's consolidated statement of income. All other technology investments that the Company holds are primarily accounted for under the measurement alternative of ASC 321. Under the measurement alternative, the carrying value is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

Assets or liabilities that have recurring fair value measurements are shown below as of March 31, 2024 and December 31, 2023:

As of March 31, 2024:


			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	March 31, 2024		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	249,004,534	$	249,004,534	$	—	$	—

Short-Term Investments:
Certificate of Deposit	746,125		746,125		—		—
Corporate Bonds	1,955,083		—		1,955,083		—
Government Securities	7,382,970		—		7,382,970		—
Municipal Bonds	1,730,433		—		1,730,433		—
Other	1,477,288		1,477,288		—		—
Long-Term Investments:
Asset Backed Securities	32,561,930		—		32,561,930		—
Certificate of Deposit	748,245		748,245		—		—
Corporate Bonds	66,095,516		—		66,095,516		—
Government Securities	6,781,490		—		6,781,490		—
Municipal Bonds	47,375,455		—		47,375,455		—
Common Stock	27,020,275		27,020,275		—		—
Total	$	442,879,344	$	278,996,467	$	163,882,877	$	—

As of December 31, 2023:


			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, 2023		(Level 1)		(Level 2)		(Level 3)
Cash & Cash Equivalents	$	226,435,019	$	226,435,019	$	—	$	—

Short-Term Investments:
Certificate of Deposit	994,013		994,013		—		—
Corporate Bonds	1,943,886		—		1,943,886		—
Government Securities	4,759,507		—		4,759,507		—
Municipal Bonds	1,726,658		—		1,726,658		—
Other	1,465,388		1,465,388		—		—
Long-Term Investments:
Asset-backed Securities	27,146,504		—		27,146,504		—
Certificate of Deposit	748,358		748,358		—		—
Corporate Bonds	65,404,340		—		65,404,340		—
Governmental Securities	6,227,129		—		6,227,129		—
Municipal Bonds	56,336,921		—		56,336,921
Common Stock	18,610,519		18,610,519		—		—
Total	$	411,798,242	$	248,253,297	$	163,544,945	$	—

The amortized cost, unrealized gains and losses, and market value of investment securities are shown as of March 31, 2024 and December 31, 2023:

As of March 31, 2024:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	750,000	$	—	$	(3,875)	$	746,125
Corporate Bonds	1,970,327		—		(15,244)		1,955,083
Government Securities	7,401,456		—		(18,486)		7,382,970
Municipal Bonds	1,749,223		—		(18,790)		1,730,433
Other	1,477,288		—		—		1,477,288
Long-Term Investments:
Asset Backed Securities	32,384,759		363,920		(186,749)		32,561,930
Certificate of Deposit	750,000		—		(1,755)		748,245
Corporate Bonds	67,027,320		319,188		(1,250,992)		66,095,516
Government Securities	6,826,404		—		(44,914)		6,781,490
Municipal Bonds	49,025,853		287,737		(1,938,135)		47,375,455
Common Stock	33,012,386		123,840		(6,115,951)		27,020,275
Total	$	202,375,016	$	1,094,685	$	(9,594,891)	$	193,874,810

As of December 31, 2023:


			Unrealized
	Cost		Gains		Losses		Market Value
Short-Term Investments:
Certificate of Deposit	$	1,000,000	$	—	$	(5,987)	$	994,013
Corporate Bonds	1,976,195		—		(32,309)		1,943,886
Government Securities	4,754,495		21,141		(16,129)		4,759,507
Municipal Bonds	1,749,038		—		(22,380)		1,726,658
Other	1,465,388		—		—		1,465,388
Long-Term Investments:
Asset-backed Securities	26,923,803		331,847		(109,146)		27,146,504
Certificate of Deposit	750,000				(1,642)		748,358
Corporate Bonds	66,214,398		748,471		(1,558,529)		65,404,340
Government Securities	6,217,774		10,675		(1,320)		6,227,129
Municipal Bonds	58,261,615		811,128		(2,735,822)		56,336,921
Common Stock	17,324,886		1,328,446		(42,813)		18,610,519
Total	$	186,637,592	$	3,251,708	$	(4,526,077)	$	185,363,223

Unrealized losses on investments as of March 31, 2024, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value of Investments
Loss duration of less than one year	$	6,442,204	$	67,460,003
Loss duration of greater than one year	3,152,687		60,198,609
Total	$	9,594,891	$	127,658,612

Unrealized losses on investments as of December 31, 2023, are as follows:


	Aggregate Unrealized Losses		Aggregate Fair Value of Investments
Loss duration of less than one year	$	126,074	$	13,449,592
Loss duration of greater than one year	4,400,003		76,966,258
Total	$	4,526,077	$	90,415,850

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 any amortized cost basis has been recovered.

Fixed income securities as of March 31, 2024 have contractual maturities as follows:


Due within one year	$	11,814,611
Due between one and five years	87,792,966
Due over five years	65,769,670
	$	165,377,247

- 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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