Annual report pursuant to Section 13 and 15(d)

Note 5 - Fair Value Measurements

v3.21.1
Note 5 - Fair Value Measurements
 12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
5.
           
Fair Value Measurements
 
The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on
three
levels of inputs, of which the
first
two
are considered observable and the last unobservable, that
may
be used to measure fair value which are the following:
 
 
•
Level
1—Quoted
prices in active markets for identical assets or liabilities;
 
 
•
Level
2—Inputs
other than Level
1
that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are
not
active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
 
 
•
Level
3—Unobservable
inputs that are supported by little or
no
market activity and that are significant to the fair value of the assets or liabilities.
 
The following table represents the fair value hierarchy for the Company's financial assets (cash equivalents) measured at fair value on a recurring basis as of
December 31, 2020
and
2019:
 
   
Level 1
    
Level 2
    
Level 3
  
December 31, 2020
                        
Money market funds
   $
1,343,370
     $
-
     $
-
  
Total
   $
1,343,370
     $
-
     $
-
  
                         
December 31, 2019
                        
Money market funds
   $
940,773
     $
-
     $
-
  
Total
   $
940,773
     $
-
     $
-
  
 
Money market funds are highly liquid investments. The pricing information on these investment instruments are readily available and can be independently validated as of the measurement date. This approach results in the classification of these securities as Level
1
of the fair value hierarchy.
 
The carrying amount of financial instruments such as accounts receivable and accounts payable approximate the related fair value due to the short-term maturities of these instruments.