NOTE

: MARKETABLE EQUITY SECURITIES

The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating (expense) income.

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note J, below.

The following table sets forth market value, cost, and unrealized losses and gains on equity securities as of

March 31, 2020

and

December 31, 2019.

	March 31, 2020			December 31, 2019
	(in thousands)
Fair market value	$	23,207		$	29,521
Cost		26,624			24,156
Unrealized (loss) / gain	$	( 3,417	)	$	5,365

The following table sets forth the gross unrealized losses and gains on the Company’s marketable securities as of

March 31, 2020

and

December 31, 2019.

	March 31, 2020			December 31, 2019
	(in thousands)
Gross unrealized gains	$	3,352		$	7,808
Gross unrealized losses		6,769			2,443
Net unrealized (loss) / gain	$	(3,417	)	$	5,365

The following table shows the Company’s net realized (losses) gains during the

first

three

months of

2020

and

2019

on certain marketable equity securities.

	Three Months Ended
	March 31,
	2020			2019
	(in thousands)
Sales proceeds	$	677		$	-
Cost of securities sold		1,211			-
Realized loss	$	(534	)	$	-

There were

sales of marketable equity securities during the

first

three

months of

2019.

For the quarter ended

March 31, 2020,

the Company recognized dividends received of approximately

$305,000

in non-operating income in its statements of operations. For the quarter ended

March 31, 2019,

the Company recognized dividends of approximately

$277,000

in non-operating income in its statements of operations.

The market value of the Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of

March 31, 2020

and

December 31, 2019,

the Company had outstanding borrowings of approximately

$10,242,000

and

$7,474,000,

respectively, under its margin account. Margin account borrowings are used for the purchase of marketable equity securities and as a source of short-term liquidity and are included in Accrued expenses and other liabilities on our balance sheets.

Our marketable equity securities portfolio had a net unrealized pre-tax loss in market value of approximately

$8,805,000

during the

first

quarter of

2020,

and a net unrealized pre-tax gain in market value of approximately

$3,184,000

during the

first

quarter of

2019,

which were reported as Non-operating income for the respective periods.