Quarterly report pursuant to Section 13 or 15(d)

Trading Securities

v3.5.0.2
Trading Securities
9 Months Ended
Sep. 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:

 

Year   Fair Value at
Beginning of Year
  Purchases   Proceeds from
Sale
  Gain on
Sale
  Unrealized
Loss
  Fair Value at
September 30, 2016
2016     $ 324,444     $ 510,000     $ (283,255 )   $ 74,712     $ (295,270 )   $ 330,631  

 

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

  

    September 30, 2016   September 30, 2015
         
  Sales proceeds   $ 283,255     $ 2,576,667  
  Gross realized (losses)   $ —       $ (971,257 )
  Gross realized gains     74,712       —    
  Gain (loss) on sale of trading securities   $ 74,712     $ (971,257 )

 

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   Other   Significant
    Fair Value at   in Active   Observable   Unobservable
    September 30, 2016   Markets
(Level 1)
  Inputs
(Level 2)
  Inputs
(Level 3)
Trading securities   $ 330,631     $ 330,631     $ —       $ —    
Money market funds     36,255       36,255       —         —    
Total   $ 366,886     $ 366,886     $ —       $ —    

 

        Fair Value Measurements at Reporting Date Using
          Significant  
        Quoted Prices   Other   Significant
    Fair Value at   in Active   Observable   Unobservable
    December 31, 2015   Markets
(Level 1)
  Inputs
(Level 2)
  Inputs
(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).