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Fair Value of Financial Instruments
3 Months Ended
Mar. 31, 2014
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

The Company utilizes a portfolio management company for the valuation of the majority of its investments. This company is an independent, third-party vendor recognized to be an industry leader with access to market information that obtains or computes fair market values from quoted market prices, pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models. For valuations obtained from the pricing service, the Company performs due diligence to understand how the valuation was calculated or derived, focusing on the valuation technique used and the nature of the inputs.

 

Based on the fair value hierarchy, the Company classifies its cash equivalents and marketable securities within Level 1 or Level 2. This is because the Company values its cash equivalents and marketable securities using quoted market prices or alternative pricing sources and models utilizing market observable inputs.

Assets measured or disclosed at fair value on a recurring basis as of March 31, 2014 are summarized below:

 

     Fair Value Measurements Using  
     Level 1      Level 2      Level 3      Total  

Assets:

           

Cash and cash equivalents

   $ 126,319,457       $ —         $ —         $ 126,319,457   

Certificates of deposit

     —           1,328,632         —           1,328,632   

U.S. Government debt securities

     —           4,503,211         —           4,503,211   

Corporate debt securities

     —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 126,319,457       $ 5,831,843       $ —         $ 132,151,300   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company’s corporate debt securities are all investment grade.

Assets measured or disclosed at fair value on a recurring basis as of March 31, 2013 are summarized below:

 

     Fair Value Measurements Using  
     Level 1      Level 2      Level 3      Total  

Assets:

           

Cash and cash equivalents

   $ 2,594,118       $ —         $ —         $ 2,594,118   
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,594,118       $ —         $ —         $ 2,594,118   
  

 

 

    

 

 

    

 

 

    

 

 

 

The Company had no assets or liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2014 and December 31, 2013.

Investment securities are exposed to various risks such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would result in material changes in the fair value of investments.