Note 5 - Fair Value of Financial Instruments

3 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

5.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Our corporate bonds and money market funds are classified as available-for-sale securities and carried at estimated fair value. Unrealized holding gains and losses are included in accumulated other comprehensive income (loss) in the statement of shareholders’ equity. Corporate bonds with remaining maturities less than

one

year are classified as short-term, and those with remaining maturities greater than

one

year are classified as long-term. We consider all highly-liquid investments with maturities of

three

months or less when purchased, including money market funds, to be cash equivalents. Gains and losses on marketable security transactions are reported on the specific-identification method.

    The fair value of our available-for-sale securities as of

June 

30,

2018

by maturity were as follows:

Total		<1 Year		1–3 Years		3–5 Years
$	77,648,829	$	31,090,601	$	21,634,678	$	24,923,550

 
     Generally accepted accounting principles establish a framework for measuring fair value, provide a definition of fair value and prescribe required disclosures about fair-value measurements. Generally accepted accounting principles define fair value as the price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement that should be determined using assumptions that market participants would use in pricing an asset or liability. Generally accepted accounting principles utilize a valuation hierarchy for disclosure of fair value measurements. The categorization within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The categories within the valuation hierarchy are described as follows:

     Level

1

– Financial instruments with quoted prices in active markets for identical assets or liabilities.

     Level

2

– Financial instruments with quoted prices in active markets for similar assets or liabilities. Level 

2

fair value measurements are determined using either prices for similar instruments or inputs that are either directly or indirectly observable, such as interest rates.

     Level

3

– Inputs to the fair value measurement are unobservable inputs or valuation techniques.
 

     Money market funds are included on the balance sheets in “Cash and cash equivalents.” Corporate bonds are included on the balance sheets in “Marketable securities, short term” and “Marketable securities, long term.” We recategorized our Level 

1

corporate bond holdings to Level 

2

as of

June 

30,

2018

based on our ongoing analysis of the individual securities. As a result, bonds with a total fair value of

$51,558,274

as of

June 

30,

2018

were recategorized from Level 

1

to Level 

2.

We do

not

have any financial assets or liabilities being measured at fair value that are classified as Level 

3

financial instruments.

     The following table shows the estimated fair value of assets that were accounted for at fair value on a recurring basis:

	As of June 30, 2018						As of March 31, 2018
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	8,166,425	$	-	$	8,166,425	$	3,951,032	$	-	$	3,951,032
Corporate bonds		-		69,482,404		69,482,404		54,517,969		19,085,998		73,603,967
Total	$	8,166,425	$	69,482,404	$	77,648,829	$	58,469,001	$	19,085,998	$	77,554,999

     Our available-for-sale securities as of

June 

30

and

March 

31,

2018,

aggregated into classes of securities, were as follows:

	As of June 30, 2018									As of March 31, 2018
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Money market funds	$	8,166,425	$	-	$	-		$	8,166,425	$	3,951,032	$	-	$	-		$	3,951,032
Corporate bonds		70,868,766		-		(1,386,363	)		69,482,404		74,853,327		-		(1,249,360	)		73,603,967
Total	$	79,035,191	$	-	$	(1,386,363	)	$	77,648,829	$	78,804,359	$	-	$	(1,249,360	)	$	77,554,999

 
     The following table shows the gross unrealized holding losses and fair value of our available-for-sale securities with unrealized holding losses, aggregated by class of securities and length of time that individual securities had been in a continuous unrealized loss position as of

June 

30

and

March 

31,

2018.

	Less Than 12 Months					12 Months or Greater					Total
	Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Losses
As of June 30, 2018
Corporate bonds	$	57,948,027	$	(1,122,499	)	$	11,534,377	$	(263,864	)	$	69,482,404	$	(1,386,363	)
Total	$	57,948,027	$	(1,122,499	)	$	11,534,377	$	(263,864	)	$	69,482,404	$	(1,386,363	)
As of March 31, 2018
Corporate bonds	$	61,731,248	$	(1,003,849	)	$	9,072,719	$	(245,511	)	$	70,803,967	$	(1,249,360	)
Total	$	61,731,248	$	(1,003,849	)	$	9,072,719	$	(245,511	)	$	70,803,967	$	(1,249,360	)

 
     We did

not

consider any of our available-for-sale securities to be impaired as of

June 

30,

2018.

None

of the securities were impaired at acquisition, and subsequent declines in fair value are

not

attributed to declines in credit quality. When evaluating for impairment we assess indicators that include, but are

not

limited to, earnings performance, changes in underlying credit ratings, market conditions, bona fide offers to purchase or sell, and ability to hold until maturity. Because we believe it is more likely than

not

we will recover the cost basis of our investments, we did

not

consider any of our marketable securities to be impaired as of

June 

30,

2018.