4 Fair Value of Financial Instruments

9 Months Ended

Mar. 31, 2022

4 Fair Value of Financial Instruments

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

In valuing assets and liabilities, the Company is required to maximize the use of quoted market prices and minimize the use of unobservable inputs. The Company calculated the fair value of its Level 1 and 2 instruments based on the exchange traded price of similar or identical instruments where available or based on other observable instruments. These calculations take into consideration the credit risk of both the Company and its counterparties. The Company has not changed its valuation techniques in measuring the fair value of any financial assets or liabilities during the period.

The fair value of the contingent consideration obligations are based on a probability-weighted approach derived from the estimates of earn-out criteria and the probability assessment with respect to the likelihood of achieving those criteria. The measurement is based on significant inputs that are not observable in the market, therefore, the Company classifies this liability as Level 3 in the following table.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2022 and June 30, 2021 according to the valuation techniques the Company used to estimate their fair values:

	Fair Value at		Fair Value Measurements Using Inputs Considered as
	March 31, 2022		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	4,068,000	$	4,068,000	$	-	$	-
Investment securities		7,768,600		6,796,500		972,100		-
Total	$	11,836,600	$	10,864,500	$	972,100	$	-
Liabilities:
Contingent consideration	$	117,500	$	-	$	-	$	117,500

	Fair Value at		Fair Value Measurements Using Inputs Considered as
	June 30, 2021		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	9,675,200	$	9,675,200	$	-	$	-
Investment securities		3,744,600		2,920,600		824,000		-
Total	$	13,419,800	$	12,595,800	$	824,000	$	-
Liabilities:
Contingent consideration	$	160,000	$	-	$	-	$	160,000

Investments in marketable securities by security type at March 31, 2022 and June 30, 2021 consisted of the following:

	Cost		Fair Value		Unrealized Holding Gain (Loss)
At March 31, 2022:
Equity securities	$	118,900	$	176,900	$	58,000
Mutual funds		6,708,300		6,619,600		(88,700	)
Debt securities		977,200		972,100		(5,100	)
	$	7,804,400		7,768,600		(35,800	)

	Cost		Fair Value		Unrealized Holding Gain (Loss)
At June 30, 2021:
Equity securities	$	102,200	$	154,100	$	51,900
Mutual funds		2,752,400		2,766,500		14,100
Debt securities		832,700		824,000		(8,700	)
	$	3,687,300	$	3,744,600	$	57,300