NOTE 6.

INVESTMENT SECURITIES

During December 2013, the Company purchased approximately $730,000 of preferred stock of a publicly traded real estate investment trust with a market capitalization of more than $1.5 billion. In accordance with ASC Topic 320, Investments – Debt and Equity Securities, the preferred stock investments have been determined to be equity securities classified as available-for-sale which are recorded at fair market value in the consolidated balance sheets. The fair value of the Company’s investment securities is measured quarterly, on a recurring basis, using Level 1 inputs, or quoted prices for identical, actively traded assets.

Available-for-Sale securities consist of the following:

 

		Year Ended December 31, 2013
		Cost				Gains in Accumulated Other Comprehensive Income				Losses in Accumulated Other Comprehensive Income				Estimated Fair Value (Level 1 Inputs)
Preferred Stock		$	729,814			$	—			$	—			$	729,814
Total Equity Securities		$	729,814			$	—			$	—			$	729,814
Total Available-for-Sale Securities		$	729,814			$	—			$	—			$	729,814

As of December 31, 2012 and 2011, the Company held no investment securities.

Prior to the 2013 purchases of preferred stock equity securities, the Company held a portfolio of investment securities until they were fully liquidated in the fourth quarter of 2011. Until the decision was made to liquidate the investment securities portfolio, the Company classified as held to maturity those securities which the Company had the intent and ability to hold through their stated maturity date. Investment securities, which were classified as held to maturity, were carried at cost, adjusted for amortization of premiums, and accretion of discounts. Gains and losses were determined using the specific identification method.

Following is a table reflecting the sale of investment securities and losses recognized during the three years ended December 31, 2013, 2012, and 2011:

 

		Year Ended December 31,
		2013				2012				2011
Proceeds from the Disposition of Investment Securities		$	—			$	—			$	6,929,493
Cost Basis of Investment Securities Sold			—				—				(7,069,929	)
Loss recognized in Statement of Operations on the Disposition of Investment Securities		$	—			$	—			$	(140,436	)