Quarterly report pursuant to Section 13 or 15(d)

FAIR VALUE MEASUREMENTS

v3.20.1
FAIR VALUE MEASUREMENTS
6 Months Ended
Feb. 29, 2020
FAIR VALUE MEASUREMENTS [Abstract]  
FAIR VALUE MEASUREMENTS
NOTE 2 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of significant input to determine where within the fair value hierarchy the measurement falls.

Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the NASDAQ Stock Market. The Company had no Level 1 assets or liabilities as of February 29, 2020 or August 31, 2019.

Level 2 — Valuations for assets and liabilities obtained from readily available pricing sources via independent providers for market transactions involving similar assets or liabilities. The Company had seven and one Level 2 assets as of February 29, 2020 and August 31, 2019, respectively, which consisted of short-term certificates of deposit.

Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker-traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. The Company had one Level 3 liability, the contingent portion of the CAA, as of February 29, 2020 and August 31, 2019. The Company has determined that the contingent portion of the CAA does not have a determinable fair value (see Note 4 – Long-Term Obligations and Operating Lease).

The Company maintains policies and procedures to value instruments using what management believes to be the best and most relevant data available.

Level 2 Asset – Investments. The Company’s investments are the Company’s only financial assets measured at fair value on a recurring basis. The fair value of investment securities is based on the values reported by the financial institutions where the funds are held. Investment securities include certificates of deposit and U.S. Treasury debt securities.

The Company’s non-financial assets measured at fair value on a non-recurring basis when assessing recoverability consist entirely of its investments in water and water systems and other long-lived assets. See Note 3 – Water and Land Assets below.

The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of February 29, 2020:

               
Fair Value Measurement Using:
       
   
Fair Value
   
Cost /
Other Value
   
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
   
Accumulated
Unrealized
Gains and
(Losses)
 
Certificates of deposit
 
$
1,720,200
   
$
1,720,000
   
$
   
$
1,720,200
   
$
   
$
200
 
Total
 
$
1,720,200
   
$
1,720,000
   
$
   
$
1,720,200
   
$
   
$
200
 

The following table provides information on the assets and liabilities measured at fair value on a recurring basis as of August 31, 2019:

               
Fair Value Measurement Using:
       
   
Fair Value
   
Cost /
Other Value
   
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
   
Accumulated
Unrealized
Gains and
(Losses)
 
U.S. Treasury debt securities
 
$
4,996,000
   
$
4,992,100
   
$
   
$
4,996,000
   
$
   
$
3,900
 
Total
 
$
4,996,000
   
$
4,992,100
   
$
   
$
4,996,000
   
$
   
$
3,900
 

The Company also held a certificate of deposit that is not carried at fair value on the consolidated balance sheets and is classified as a held-to-maturity security. As of February 29, 2020, the carrying amount of held-to-maturity securities was $0. As of August 31, 2019, the carrying amount of held-to-maturity securities was $192,800 and is recorded as short-term investments in the accompanying consolidated financial statements.