Quarterly report pursuant to Section 13 or 15(d)

Investment In Trading Securities

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Investment In Trading Securities
9 Months Ended
Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]  
Investment in Trading Securities

NOTE 2 - INVESTMENT IN TRADING SECURITIES

 

The Company’s securities investments that are bought and held for an indefinite period of time are classified as available-for-sale securities. Available-for-sale securities are purchased with the intent of selling them before they reach maturity and are recorded at fair value on the balance sheet in current assets, with the change in fair value during the period excluded from earnings and recorded net of tax as a component of other comprehensive income. The Company’s available-for-sale securities are marketable securities and have no maturity date. When sold the cost of the securities is determined using the average purchase cost of the securities and the difference is recorded as a realized gain or loss. The Company will transfer some of its available for sale securities to trading securities. When this occurs the unrealized gain or loss is immediately recognized in earnings. Trading securities are purchased with the intent of selling them in the short term. Trading securities are recorded at market value and the difference between market value and cost of the securities is recorded as an unrealized gain or loss in the statement of operations. Gains from the sales of such marketable securities will be utilized to fund payment of obligations and to provide working capital for operations and to finance future growth, including, but not limited to: conducting our ongoing business, conducting strategic business development, marketing analysis, due diligence investigations into possible acquisitions, and research and development and implementation of the Company’s business plans generally.

 

The Company’s securities investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value based on quoted market price (level 1) on the balance sheet in current assets.

 

Change in investments in securities is summarized as follows:

 

Fair Value at   Proceeds from   Loss on   Change In Unrealized   Fair Value at
January 1, 2015   Sale   Sale   Gain (Loss)   September 30, 2015
$ 6,026,780     $ (2,576,667 )   $ (971,257 )   $(1,314,931)   $ 1,163,925  

 

Realized gains and losses are determined on the basis of specific identification. During the nine months ended September 30, 2015 and 2014, sales proceeds and gross realized gains and losses on securities classified as available-for-sale securities and trading securities were: 

 

    September 30, 2015   September 30, 2014
         
  Sales proceeds   $ 2,576,667     $ 8,176,418  
  Gross realized (losses)   $ (971,257 )   $ (122,122 )
  Gross realized gains     —         5,941,554  
  Gain on sale of marketable securities   $ (971,257 )   $ 5,819,432  

 

The following table discloses the assets measured at fair value on a recurring basis and the methods used to determine fair value:

 

        Fair Value Measurements at Reporting Date Using
        Quoted Prices   Significant   Significant
        in Active   Other   Unobservable
    Fair Value at   Markets   Observable Inputs   Inputs
    September 30, 2015   (Level 1)   (Level 2)   (Level 3)
Trading securities   $ 1,163,925     $ 1,163,925     $ —       $ —    
Money market funds     248,749       248,749       —         —    
Total   $ 1,412,674     $ 1,412,674     $ —       $ —    

  

        Fair Value Measurements at Reporting Date Using
        Quoted Prices   Significant   Significant
        in Active   Other   Unobservable
    Fair Value at   Markets   Observable Inputs   Inputs
    December 31, 2014   (Level 1)   (Level 2)   (Level 3)
Trading securities   $ 6,026,780     $ 6,026,780     $ —       $ —    
Money market funds     673,281       673,281       —         —    
Total   $ 6,700,061     $ 6,700,061     $ —       $ —