Annual report pursuant to Section 13 and 15(d)

Trading Securities

v3.7.0.1
Trading Securities
12 Months Ended
Dec. 31, 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 Beginning       Proceeds from   Loss on   Contributed   Unrealized   Fair Value at
December 31,
Year   of Year   Purchases   Sale   Sale   Capital   Loss   2016
  2016     $ 324,000     $ 510,000     $ (783,000 )   $ (95,000 )   $ 160,000     $ (57,000 )   $ 59,000  
  2015     $ 6,026,000     $ —       $ (3,061,000 )   $ (1,460,000 )   $ —       $ (1,181,000 )   $ 324,000  

 

Realized gains and losses are determined on the basis of specific identification. During the years ended December 31, 2016 and 2015, sales proceeds and gross realized gains and losses on securities classified as available-for-sale securities and trading securities were:

 

        December 31,
2016
  December 31,
2015
     
  Sales proceeds       $783,000   $3,061,000
  Gross realized (losses)       $(95,000)   $(1,460,000)
  Gross realized gains        
  Loss on sale of trading securities       $(95,000)   $(1,460,000)

 

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
    December 31, 2016   (Level 1)   (Level 2)   (Level 3)
Trading securities    $                   59,000    $                   59,000    $                           -       $                    -   
Money market funds                         36,000                         36,000                                 -                             -   
Total    $                   95,000    $                   95,000    $                           -       $                    -   

 

        Fair Value Measurements at Reporting Date Using
        Quoted Prices   Significant   Significant
        in Active   Other   Unobservable
    Fair Value at   Markets   Observable Inputs   Inputs
    December 31, 2015   (Level 1)   (Level 2)   (Level 3)
Trading securities    $                 324,000    $                 324,000    $                           -       $                    -   
Money market funds                       333,000                       333,000                                 -                             -   
Total    $                 657,000    $                 657,000    $                           -       $                    -   

 

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