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OHL USA, INC. AND SUBSIDIARIES <br />NOTES TO CONSOLIDATED FINANCIAL STATEMENTS <br />DECEMEER 31, 2020 <br />Note 3 - Concentration of Credit Risk <br />The Company maintains cash balances in several financial institutions, which balances are <br />insured by the Federal Deposit Insurance Corporation ("FDIC") for up to $250,000 per <br />institution. From time to time, the Company's balances may exceed these limits. <br />Note 4 - Marketable Securities <br />Marketable debt securities were valued using Level 2 inputs consisting of quoted market <br />prices of identical securities. At December 31, 2020, marketable debt securities consisted of: <br />• Municipal bonds - state are issued by the States of New York and California. <br />• Municipal bonds - local are issue~ by localities within the States of New York and <br />California. <br />Marketable debt securities - available for sale: <br />Municipal Bonds - Local <br />Municipal Bonds - State <br />Marketable debt securities - held to maturity: <br />Municipal Bonds - Local <br />Carrying Amortized Unrealized <br />Value Cost Gain <br />$ 33,478,963 $ 32,851,689 $ 627,274 <br />707,942 665,846 42,096 <br />34,186,905 33,517,535 669,370 <br />25,967,183 25,967,183 <br />$ 60,154,088 $ 59,484,718 $ 669,370 <br />Municipal bonds have various maturity dates ranging from January 2021 to August 2042, with <br />interest rates ranging from 0.00% to 5.421lo per annum. <br />At December 31, 2020, the Company has pledged approximately $40,826,000 of its <br />marketable debt securities in lieu of retainage relating to certain completed and uncompleted <br />contracts. The Company does not expect approximately $21,896,000 of these municipal <br />bonds to be released within one year. <br />Note 5 - Fair Value Measurements <br />The following is a description of the valuation methodologies used for assets measured at fair <br />value. There have been no changes in methodologies used at December 31, 2020. <br />The fair value of municipal bonds is estinated using recently executed transactions, market <br />price quotations and pricing models that factor in, where applicable, interest rates, bond or <br />credit default swap spreads and volatility. Municipal bonds are generally categorized in Level <br />2 of the fair value hierarchy. <br />23 <br />