Note 5 - Fair Value Measurements

3 Months Ended

Dec. 31, 2019

5.	FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist principally of cash equivalents, short and long-term marketable securities, accounts receivable and accounts payable. The fair value of a financial instrument is the amount that would be received in an asset sale or paid to transfer a liability in an orderly transaction between unaffiliated market participants. Assets and liabilities measured at fair value are categorized based on whether or

not

the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into

three

levels (with Level

being the lowest) defined as follows:

Level

Inputs are based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

Level

Inputs include quoted prices for similar assets or liabilities in active markets and/or quoted prices for identical or similar assets or liabilities in markets that are

not

active near the measurement date.

Level

Inputs include management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

The fair value of the Company’s cash equivalents and marketable securities was determined based on Level

and Level

inputs. The Company did

not

have any marketable securities in the Level

category as of

December 31, 2019

September 30, 2019.

The Company believes that the recorded values of its other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Instruments Measured at Fair Value

The following tables present the Company’s cash equivalents and marketable securities’ costs, gross unrealized gains and losses, and fair value by major security type recorded as cash equivalents or short-term or long-term marketable securities as of

December 31, 2019

and

September 30, 2019.

	December 31, 2019
	Cost Basis		Unrealized Gain		Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money Market Funds	$	254,408	$	-	$	254,408	$	254,408	$	-	$	-

Level 2:
Certificates of deposit		1,444,833		-		1,444,833		-		499,000		945,833
Municipal securities		270,221		453		270,674		-		270,674		-
Corporate bonds		3,404,812		7,423		3,412,235		-		3,412,235		-
Subtotal		5,119,866		7,876		5,127,742		-		4,181,909		945,833

Total	$	5,374,274	$	7,876	$	5,382,150	$	254,408	$	4,181,909	$	945,833

	September 30, 2019
	Cost Basis		Unrealized Gain		Fair Value		Cash Equivalents		Short-term Securities		Long-term Securities
Level 1:
Money Market Funds	$	275,538	$	-	$	275,538	$	275,538	$	-	$	-

Level 2:
Certificates of deposit		971,592		-		971,592		-		499,000		472,592
Municipal securities		240,463		205		240,668		-		80,336		160,332
Corporate bonds		3,856,766		11,157		3,867,923		-		3,116,028		751,895
Subtotal		5,068,821		11,362		5,080,183		-		3,695,364		1,384,819

Total	$	5,344,359	$	11,362	$	5,355,721	$	275,538	$	3,695,364	$	1,384,819

- 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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