Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Fair Value Measurements

Fair Value Measurements

Note 3 – Fair Value Measurements

The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short-term nature of these items.

In accordance with accounting principles generally accepted in the United States, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level hierarchy prioritizes the inputs used to measure fair value as follows:

Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 – Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The following table summarizes our cash equivalents and marketable securities measured at fair value. Certain marketable securities consist of investments in debt and equity securities. We classify our cash equivalents and marketable securities within Level 1 because we use observable inputs that reflect quoted market prices for identical assets in active markets to determine their fair value. We have classified debt securities as available for sale securities with unrealized gains and losses recorded as other comprehensive income. We have classified equity securities as trading and are marked to market with changes recorded as other income on the income statement. Any interest income or dividends are recorded within financing expense, net on the income statement.

The cost, gross unrealized gains (losses) and fair value of marketable securities by major security type as of December 31, 2023 and 2022 were as follows:

	Investment Assets at Fair Value				Investment Assets at Fair Value
	As of December 31, 2023				As of December 31, 2022
	Level 1		Total		Level 1		Total
Debt securities	$	—	$	—	$	936,563	$	936,563
Equity securities		—		—		1,253,027		1,253,027
Cash equivalents		69,291		69,291		801		801
Total Investments at Fair Value	$	69,291	$	69,291	$	2,190,391	$	2,190,391

	As of December 31, 2023						As of December 31, 2022
	Cost		Unrealized Gain (Loss)		Fair Value		Cost		Unrealized Gain (Loss)			Fair Value
Marketable securities
Debt securities	$	—	$	—	$	—	$	1,021,431	$	(84,868	)	$	936,563
Equity securities		—		—		—		1,776,773		(523,746	)		1,253,027
Total marketable securities					$	—						$	2,189,590

The realized loss on the securities for the year ended December 31, 2023 was approximately $510,000.