Note 5 - Fair Value of Financial Instruments

9 Months Ended

Dec. 31, 2020

NOTE

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.

Contractual maturities of available-for-sale securities as of

December 31, 2020

are as follows:

Total				<1 Year				1–3 Years				3–5 Years
$	65,694,022			$	25,037,055			$	34,142,192			$	6,514,775

Total available-for-sale securities represented approximately

88%

of our total assets. Marketable securities as of

December

31,

2020

had remaining maturities between

eight

weeks and

months.

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

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

Level

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

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

– 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.”

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

	As of December 31, 2020						As of March 31, 2020
	Level 1		Level 2		Total		Level 1		Level 2		Total
Money market funds	$	13,921,961	$	-	$	13,921,961	$	7,903,433	$	-	$	7,903,433
Corporate bonds		-		51,772,061		51,772,061		-		62,691,309		62,691,309
Total	$	13,921,961	$	51,772,061	$	65,694,022	$	7,903,433	$	62,691,309	$	70,594,742

Our available-for-sale securities as of

December

and

March

31,

2020,

aggregated into classes of securities, were as follows:

	As of December 31, 2020								As of March 31, 2020
	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses			Estimated Fair Value
Money market funds	$	13,921,961	$	-	$	-	$	13,921,961	$	7,903,433	$	-	$	-		$	7,903,433
Corporate bonds		49,873,178		1,898,883		-		51,772,061		62,030,120		752,621		(91,432	)		62,691,309
Total	$	63,795,139	$	1,898,883	$	-	$	65,694,022	$	69,933,553	$	752,621	$	(91,432	)	$	70,594,742

- 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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