NOTES TO FINANCIAL STATEMENTS
NOTE 3 - INVESTMENTS At December 31, 2024 and 2023, investments consisted of the following: 2024 Level 1 Money market funds............................................................... $ 766,262 $
amount of investments categorized within the fair value hierarchy and total investments measured at fair value on the face of the financial statements. Advertising The Institute expenses the costs of advertising as incurred, except for direct-response advertising. Direct-response advertising consists primarily of the costs to produce promotional mailings that contain coded order forms and coupons for specific seminars and publications. These costs are capitalized and expensed during the period in which the seminars are held or upon the sale of the specific publications. Advertising costs totaling approximately $17,000 and $30,000 are included in prepaid expenses at December 31, 2024 and 2023, respectively. Advertising expense for the years ended December 31, 2024 and 2023 totaled approximately $1,663,000 and $2,031,000, respectively. Concentration of Market and Credit Risk Cash, cash equivalents and investments are exposed to interest rate, market, and credit risks. The Institute maintains its cash and cash equivalents in various bank deposit accounts that may exceed federally insured limits at times, however, the Institute has not experienced, nor does it anticipate any losses with respect to these bank accounts. To minimize risk, the Institute’s cash accounts are placed with high- credit quality financial institutions, and the Institute’s investment portfolio is diversified with several investment managers in a variety of asset classes. The Institute regularly evaluates its depository arrangements and investments, including performance thereof. Measure of Operations Operations include all revenues and expenses other than investment income, related investment advisory fees, pension related adjustments other than service cost, and other items considered to be unusual or of a non-recurring nature. Income Taxes The Institute follows guidance that clarifies the accounting for uncertainty in tax positions taken or expected to be taken in a tax return, including issues relating to financial statement recognition and measurement. This guidance provides that the tax effects from an uncertain tax position can only be recognized in the financial statements if the position is “more-likely-than-not” to be sustained if the position were to be challenged by a taxing authority. The assessment of the tax position is based solely on the technical merits of the position, without regard to the likelihood that the tax position may be challenged. The Institute is exempt from federal income tax under IRC section 501(c)(3), though it is subject to tax on income unrelated to its exempt status, unless that income is otherwise excluded by the IRC. PLI has processes presently in place to ensure the maintenance of its tax-exempt status; to identify and report unrelated income; to determine its filing and tax obligations in jurisdictions for which it has nexus; and to identify and evaluate other matters that may be considered tax positions. The Institute has determined that there are no material uncertain tax positions that require recognition or disclosure in the financial statements. Leases The Institute recognizes the assets and related liabilities for the rights and obligations created by the leases (lessees) on the statement of financial position for leases with terms exceeding 12 months. A lease is defined as a contract or part of a contract that conveys the right to control the use of identified assets for a period of time in exchange for consideration. The lessee in a lease will be required to initially measure the right- of-use (“ROU”) asset and the lease liability at the present value of the remaining lease payments, as well as capitalize initial direct costs as part of the ROU asset. The Institute accounts for non-lease components and the lease components to which they relate as a single lease component for all leases. The Institute determines if an arrangement is a lease or contains a lease at inception of a contract. A contract is determined to be or contain a lease if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) in exchange for consideration. The Institute determines these assets are leased because the Institute has the right to obtain substantially all of the economic benefit from and the right to direct the use of the identified asset. Assets in which the supplier or lessor has the practical ability and right to substitute alternative assets for the identified asset and would benefit economically from the exercise of its right to substitute the asset are not considered to be or contain a lease because the Institute does not have the right to control and direct the use of the identified asset. The Institute’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Leases result in the recognition of ROU assets and lease liabilities on the statement of financial position. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease, measured on a discounted basis. The Institute determines lease classification as operating or finance at the lease commencement date. ROU assets and lease liabilities for operating leases are included in the statement of financial position and presented separately based on the classification of the underlying lease arrangement. ROU assets and lease liabilities for financing leases would be included within property, plant and equipment, and lease liabilities, respectively, in the statement of financial position. Currently, the Institute does not have any finance leases. At lease inception, the lease liability is measured at the present value of the lease payments over the lease term. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid or deferred rent, and lease incentives. For the initial and subsequent measurement of all lease liabilities, the discount rate used is the Risk-Free Treasury Par Yield Curve Rate. The portion of payments on operating lease liabilities related to interest, along with the amortization of the related ROU, is recognized as rent expense. This rent expense is recognized on a straight-line basis over the term of the lease. The portion of payments on finance lease liabilities related to interest is recognized as interest expense. The amortization of the ROU assets under finance leases is recognized as part of depreciation expense.
Total
766,262
12,039,453 57,594,384 70,400,099
Fixed income mutual funds........................................................ 12,039,453 Common stocks and commodity mutual funds......................... 57,594,384
$ 70,400,099
56,439,799
Alternative investments at NAV...................................................................... Redemption Receivable*............................................................................... Investments, at fair value...........................................................................
234,873
$127,074,771
2023
Level 1
Total
Money market funds. ............................................................. $ 738,932 $ Fixed income mutual funds....................................................... 12,098,233 Common stocks and commodity mutual funds........................ 52,270,947
738,932
12,098,233 52,270,947 65,108,112 53,930,640
$ 65,108,112
Alternative investments at NAV...................................................................... Investments, at fair value...........................................................................
$119,038,752
* Redemption receivable pertains to a transfer of funds from an investment fund agreed to prior to December 31, 2024 for which the funds will be received subsequent to year end. Investments valued at NAV or its equivalent as of December 31, 2024 consisted of the following:
Frequency of Redemptions (If Currently
Number
Redemption Notice Period
Fair Value of Funds
Commitments Eligible)
Alternative mutual funds Hedge funds
$47,093,341 $ 8,065,742
6 4
$ $
- Monthly and quarterly 5 to 90 days
- Monthly/semi-
65 to 95 days
annually/annually.
Private equity
$ 1,280,716
4
$ 3,670,806 N/A
N/A
Investments valued at NAV or its equivalent as of December 31, 2023 consisted of the following:
Frequency of Redemptions (If Currently
Number
Redemption Notice Period
Fair Value of Funds
Commitments Eligible)
Alternative mutual funds Hedge funds
$44,738,769 $ 8,801,372
6 4
$ $
- Monthly and quarterly 5 to 90 days
- Monthly/semi-
65 to 95 days
annually/annually. Two hedge fund investments are subject to a lockup
period that has not yet expired.
Private equity
$ 390,499
2
$ 2,089,462 N/A
N/A
The net realized and unrealized gains for the years ended December 31, 2024 and 2023 totaled approximately $10,282,000 and $18,539,000, respectively. Investment expenses incurred for the years ended December 31, 2024 and 2023 totaled approximately $553,000 and $528,000, respectively. Included within the investment balance at December 31, 2024 and 2023 are certain shares of stock which have been pledged as collateral in conjunction with the term bank loan, line of credit and letter of credit (Note 7). The value of those shares at December 31, 2024 and 2023 totaled approximately $53,988,000 and $46,966,000, respectively, and are considered to be Level 1 within the fair value hierarchy. NOTE 4 - LIQUIDITY The Institute regularly monitors liquidity required to meet its operating needs and other contractual agreements, while also striving to maximize the investment of its portfolio. The Institute has various sources of liquidity at its disposal, including cash and cash equivalents, short-term marketable equity securities and a revolving line of credit. In addition to financial assets available to meet general expenditure over the next 12 months, the Institute operates with a balanced budget and anticipates collecting sufficient operating revenue and investment portfolio returns to cover all of its operating needs.
11
2024 Annual Report
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