Quarterly report pursuant to Section 13 or 15(d)

Trading Securities

v3.5.0.2
Trading Securities
6 Months Ended
Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]  
Trading Securities

NOTE 2 - TRADING SECURITIES

 

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, with the change in fair value during the period included in earnings.

 

Investments in securities are summarized as follows:

 

    Fair Value at       Proceeds from   Gain on   Unrealized   Fair Value at
Year   Beginning of Year   Purchases   Sale   Sale   Loss   June 30, 2016
  2016     $ 324,444     $ 510,000     $ (280,195 )   $ 74,410     $ (84,393 )   $ 544,266  

 

Realized gains and losses are determined on the basis of specific identification. During the six months ended June 30, 2016 and 2015, sales proceeds and gross realized gains and losses on trading securities were:

 

    June 30,
2016
  June 30,
2015
         
  Sales proceeds   $ 280,195     $ 1,959,738  
  Gross realized (losses)   $ —       $ (485,329 )
  Gross realized gains     74,410       —    
  Gain (loss) on sale of trading securities   $ 74,410     $ (485,329 )

  

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
          Significant  
        Quoted Prices in Active   Other Observable   Significant Unobservable
    Fair Value at   Markets   Inputs   Inputs
    June 30, 2016   (Level 1)   (Level 2)   (Level 3)
Trading securities   $ 544,266     $ 544,266     $ —       $ —    
Money market funds     42,734       42,734       —         —    
Total   $ 587,000     $ 587,000     $ —       $ —    

  

      Fair Value Measurements at Reporting Date Using
          Significant  
        Quoted Prices in Active   Other Observable   Significant Unobservable
    Fair Value at   Markets   Inputs   Inputs
    December 31, 2015   (Level 1)   (Level 2)   (Level 3)
Trading securities   $ 324,444     $ 324,444     $ —       $ —    
Money market funds     332,706       332,706       —         —    
Total   $ 657,150     $ 657,150     $ —       $ —    

 

Generally, for all trading securities and available-for-sale securities, fair value is determined by reference to quoted market prices (level 1).