Quarterly report pursuant to Section 13 or 15(d)

Trading and Available-For-Sale Securities at Fair Value

v3.20.2
Trading and Available-For-Sale Securities at Fair Value
3 Months Ended
Jun. 30, 2020
Trading and Available-For-Sale Securities at Fair Value  
NOTE 5 - TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE

NOTE 5 -TRADING AND AVAILABLE-FOR-SALE SECURITIES AT FAIR VALUE

  

As of June 30, 2020 and March 31, 2020, trading and available-for-sale securities consisted of:

  

 

 

June 30,

2020

 

 

March 31,

2020

 

 

 

 

 

 

 

 

Debt securities

 

$ 117,422

 

 

$ 87,014

 

Equity securities

 

 

59,662

 

 

 

69,530

 

Total trading securities

 

$ 177,084

 

 

$ 156,544

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$ 1

 

 

$ 1

 

Certificate of deposit

 

 

-

 

 

 

5,076

 

Mutual investment funds

 

 

-

 

 

 

672

 

Debt securities

 

 

-

 

 

 

405

 

Preferred shares

 

 

-

 

 

 

284

 

Total available-for-sale securities, at fair value

 

$ 1

 

 

$ 6,438

 

 

The Company recognized no other than temporary impairment in accumulated other comprehensive income.

The fair value of assets and liabilities is determined using observable market data based on recent trading activity. Where observable market data is unavailable due to a lack of trading activity, the Company utilizes internally developed models to estimate fair value and independent third parties to validate assumptions, when appropriate. Estimating fair value requires significant management judgment, including benchmarking to similar instruments with observable market data and applying appropriate discounts that reflect differences between the securities that the Company is valuing and the selected benchmark. Depending on the type of securities owned by the Company, other valuation methodologies may be required.

 

Measurement of fair value is classified within a hierarchy based upon the transparency of inputs used in the valuation of an asset or liability. Classification within the hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

The valuation hierarchy contains three levels:

  

·

Level 1 - Valuation inputs are unadjusted quoted market prices for identical assets or liabilities in active markets.

·

Level 2 - Valuation inputs are quoted market prices for identical assets or liabilities in markets that are not active, quoted market prices for similar assets and liabilities in active markets, and other observable inputs directly or indirectly related to the asset or liability being measured.

·

Level 3 - Valuation inputs are unobservable and significant to the fair value measurement.

  

The following tables present trading securities assets in the condensed consolidated financial statements at fair value on a recurring basis as of June 30, 2020 and March 31, 2020:

 

 

 

 

 

Fair Value Measurements at

 

 

 

 

 

June 30, 2020 using

 

 

 

 

 

 

Quoted Prices in Active Markets for Identical Assets

 

 

Significant Other Observable Inputs

 

 

Significant unobservable units

 

 

 

June 30, 2020 

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities  

 

$ 117,422

 

 

$ 117,422

 

 

$ -

 

 

$ -

 

Equity securities 

 

 

59,662

 

 

 

48,029

 

 

 

-

 

 

 

11,633

 

Total trading securities

 

$ 177,084

 

 

$ 165,451

 

 

$ -

 

 

$ 11,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$ 1

 

 

$ -

 

 

$ -

 

 

$ 1

 

Total available-for-sale securities, at fair value

 

$ 1

 

 

$ -

 

 

$ -

 

 

$ 1

 

 

 

 

 

 

Fair Value Measurements at

 

 

 

 

 

March 31, 2020 using

 

 

 

 

 

 

Quoted Prices in Active Markets for Identical Assets

 

 

Significant Other Observable Inputs

 

 

Significant unobservable units

 

 

 

March 31, 2020

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities

 

$ 87,014

 

 

$ 87,014

 

 

$ -

 

 

$ -

 

Equity securities

 

 

69,530

 

 

 

58,271

 

 

 

-

 

 

 

11,259

 

Total trading securities

 

$ 156,544

 

 

$ 145,285

 

 

$ -

 

 

$ 11,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

$ 1

 

 

$ -

 

 

$ -

 

 

$ 1

 

Debt securities

 

 

405

 

 

 

-

 

 

 

405

 

 

 

-

 

Certificate of deposit

 

 

5,076

 

 

 

-

 

 

 

5,076

 

 

 

-

 

Mutual investment funds

 

 

672

 

 

 

672

 

 

 

-

 

 

 

-

 

Preferred shares

 

 

284

 

 

 

-

 

 

 

284

 

 

 

-

 

Total available-for-sale securities, at fair value

 

$ 6,438

 

 

$ 672

 

 

$ 5,765

 

 

$ 1

 

 

The table below presents the Valuation Techniques and Significant Level 3 Inputs used in the valuation as of June 30, 2020 and March 31, 2020. The table is not intended to be all inclusive, but instead captures the significant unobservable inputs relevant to determination of fair value.

 

Type

 

Valuation Technique

 

FV as of June 30, 2020 

 

 

FV as of March 31, 2020

 

 

Significant

Unobservable Inputs

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

DCF

 

$ 11,259

 

 

$ 11,259

 

 

Discount rate

 

 

9.50 %

 

 

 

 

 

 

 

 

 

 

 

 

Estimated number of years

 

9 years

 

Equity securities

 

DCF

 

$ 374

 

 

 

-

 

 

Discount rate

 

 

20.3 %

 

 

 

 

 

 

 

 

 

 

 

 

Estimated number of years

 

10 years

 

  

The following table provides a reconciliation of the beginning and ending balances for investments that use Level 3 inputs for the three months ended June 30, 2020 and the year ended March 31, 2020:

  

 

 

Trading

securities

 

 

Available-for-sale securities

 

Balance as of March 31, 2020

 

$ 11,259

 

 

$ 1

 

 

 

 

 

 

 

 

 

 

Purchase of investments that use Level 3 inputs

 

 

374

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2020

 

$ 11,633

 

 

$ 1

 

 

 

 

Trading

securities

 

 

Available-for-sale securities

 

Balance as of March 31, 2019

 

$ 504

 

 

$ 2

 

 

 

 

 

 

 

 

 

 

Sale of investments that use Level 3 inputs

 

 

(497 )

 

 

-

 

Purchase of investments that use Level 3 inputs

 

 

10,430

 

 

 

-

 

Revaluation of investments that use Level 3 inputs

 

 

829

 

 

 

-

 

Foreign currency translation

 

 

(7 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Balance as of  March 31, 2020

 

$ 11,259

 

 

$ 2

 

   

 

 

 

June 30, 2020

 

 

 

Assets measured at amortized cost

 

 

Unrealized loss accumulated in other comprehensive income/(loss)

 

 

Assets measured at fair value

 

 

 

 

 

 

 

Equity securities

 

$ 1

 

 

$ -

 

 

$ 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2020

 

$ 1

 

 

$ -

 

 

$ 1

 

  

 

 

 

March 31, 2020

 

 

 

Assets measured at amortized cost

 

 

Unrealized loss accumulated in other comprehensive income/(loss)

 

 

Assets measured at fair value

 

 

 

 

 

 

 

Certificate of deposit

 

$ 5,050

 

 

$ 26

 

 

$ 5,076

 

Mutual investment funds

 

 

696

 

 

 

(24 )

 

 

672

 

Debt securities

 

 

456

 

 

 

(51 )

 

 

405

 

Preferred shares

 

 

306

 

 

 

(22 )

 

 

284

 

Equity securities

 

 

1

 

 

 

-

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2020

 

$ 6,509

 

 

$ (71 )

 

$ 6,438

 

 

In connection with the 2011 sale of the Company’s oil and gas exploration and production operations the Company declared distributions to its stockholders. Certain stockholders, however, never completed and submitted the necessary documentation to establish their right to receive the distributions. The total amount held in reserve by the Company on behalf of such stockholders is equal to available-for-sale securities, at fair value, less equity securities, plus the amount identified as “deferred distribution payments” in Note 4 - Restricted Cash. These funds are currently payable. The Company has no control over when, or if, any entitled stockholder will submit the necessary documentation to establish their claim to receive their distribution payment.