Investments

6 Months Ended

Jun. 30, 2020

Investments

4- Investments

(4) Investments

As of June 30, 2020, we held investments in commercial paper, bonds, money market accounts, mutual funds and equity securities. The commercial paper and bonds are considered held-to-maturity and are recorded at amortized cost in the accompanying consolidated balance sheet. The money market accounts, equity securities and mutual funds are recorded at fair value in the accompanying consolidated balance sheet. The fair values of these investments were estimated using recently executed transactions and market price quotations. We consider as current assets those investments which will mature in the next 12 months including interest receivable on the long-term bonds. The remaining investments are considered non-current assets including our investment in equity securities we intend to hold longer than 12 months.

The components of the Company’s cash and cash equivalents and our short and long-term investments are as follows (in thousands):

	June 30, 2020			December 31, 2019
Cash and cash equivalents:
Cash deposits	$	21,488		$	38,942
Money market funds		1,861			3,460
Commercial paper		750			2,646
Total cash and cash equivalents	$	24,099		$	45,048
Short-term investments:
Commercial paper (held-to-maturity)	$	4,709		$	6,778
Bonds (held-to-maturity)		1,880			16,988
Allowance for credit losses		(16	)		-
Total short-term investments	$	6,573		$	23,766
Long-term investments:
Mutual funds (available for sale)	$	462		$	1,105
Bonds (held-to-maturity)		54,353			27,845
Allowance for credit losses		(66	)		-
Equity securities (available for sale)		2,123			2,822
Total long-term investments	$	56,872		$	31,772
Total cash, cash equivalents and short and long-term investments	$	87,544		$	100,586

Newly adopted Topic 326 utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for held-to-maturity securities at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. Our credit loss calculations for held-to-maturity securities are based upon historical default and recovery rates of bonds rated with the same rating as our portfolio. We also apply an adjustment factor to these credit loss calculations based upon our assessment of the expected impact from current economic conditions on our investments, including the impact of COVID-19. We monitor the credit quality of debt securities classified as held-to-maturity through the use of their respective credit rating and update them on a quarterly basis with our latest assessment completed on June 30, 2020.

The following table summarizes the amortized cost of our held-to-maturity bonds at June 30, 2020, aggregated by credit quality indicator (in thousands):

Held-to-Maturity Bonds
Credit Quality Indicators	Asset Backed Bonds		Fed Govt Bonds/Notes		Municipal Bonds		Corporate Bonds		Totals
AAA/AA/A	$	2,392	$	3,335	$	755	$	34,771	$	41,253
BBB/BB		-		-		-		14,980		14,980
TOTAL	$	2,392	$	3,335	$	755	$	49,751	$	56,233

The following table presents information regarding our allowance for credit losses on our short-term and long-term investments for the six months ended June 30, 2020 (in thousands):

	Short- Term Securities		Long- Term Securities		Total
Beginning balance, December 31, 2019	$	-	$	-	$	-
Allowance recognized upon adoption of Topic 326		9		33		42
Provision for credit loss expense		7		33		40
Ending balance, June 30, 2020	$	16	$	66	$	82

Our investments are required to be measured for disclosure purposes at fair value on a recurring basis. Our investments are considered Level 1 or Level 2 as detailed in the table below. The fair values of these investments were estimated using recently executed transactions and market price quotations. The amortized cost and fair value of our investments, and the related gross unrealized gains and losses, were as follows as of the dates shown below (in thousands):

					Gross Unrealized
	Level		Cost		Gains		Losses			Fair Value
As of June 30, 2020:
Money market		1		1,861	$	--	$	--		$	1,861
Commercial paper		2		5,459	$	14	$	--		$	5,473
Bonds		2		56,233	$	575	$	(45	)	$	56,763
Mutual funds		1		561	$	--	$	(99	)	$	462
Equity investments		2		5,675	$	--	$	(3,552	)	$	2,123
As of December 31, 2019:
Money Market		1		3,460	$	--	$	--		$	3,460
Commercial paper		2		9,424	$	2	$	--		$	9,426
Bonds		2		44,833	$	138	$	(19	)	$	44,952
Mutual funds		1		1,052	$	53	$	--		$	1,105
Equity investments		2		5,675	$	--	$	(2,853	)	$	2,822

The above bonds represent investments in various issuers at June 30, 2020.

The unrealized losses for these bond investments relate to the impact of COVID-19 on the bond market which resulted in a lower market price for those securities. None of these bond investments has been in a loss position for more than 12 months.

The commercial paper has maturities from less than a month to five months. The bonds have maturities from less than a month to 57 months.