Note 4 - Investments in Related Parties

6 Months Ended

Jun. 30, 2025

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

4.	Investments in Related Parties

The following table summarizes the Company’s investment in HC Realty as of June 30, 2025 and December 31, 2024 and for the three and six months ended June 30, 2025 and 2024 (amounts in thousands, except ratios):

																		Loss recorded in the Consolidated
		Ownership %								Carrying Value								Statements of Operations (b)
																		For the Three								For the Six
																		Months Ended								Months Ended
																		June 30,								June 30,
		*June 30,*				December 31,				*June 30,*				December 31,
		*2025*				2024				*2025*				2024				*2025*				2024				*2025*				2024

HC Series B Stock (a)			27.9	%			27.9	%		$	9,215			$	9,256			$	-			$	-			$	(41	)		$	-
HC Common Stock			0.1	%			0.1	%			9				9				-				(245	)			-				(271	)
Total			28.0	%			28.0	%		$	9,224			$	9,265			$	-			$	(245	)		$	(41	)		$	(271	)

(a)

Represents investments in shares of HC Series B Stock with a basis of $10.25 million. Each share of HC Series B Stock has voting rights on an as converted basis and can be converted into shares of HC Common Stock at a conversion ratio equal to $10.00 per share divided by the lesser of $9.10 per share or the fair market value per share of HC Common Stock, subject to adjustment upon the occurrence of certain events.

(b)

Loss from these investments is included in “Income (loss) from investments in related parties, net” in the Unaudited Consolidated Statements of Operations. Since HC Realty is a REIT and not a taxable entity, the loss is not reported net of taxes.

The Company’s investment in HC Common Stock is accounted for under the equity method of accounting as the Company has concluded it has a significant influence over the investee. The HC Series B Stock is not deemed to be in-substance common stock and is accounted for under the cost adjusted for market observable events less impairment method. Both investments in HC Common Stock and HC Series B Stock are evaluated quarterly for impairment. During the three and six months ended June 30, 2025, the Company did not recognize any impairment of HC Common Stock. During the three and six months ended June 30, 2024, the Company recognized an impairment of HC Common Stock in the amount of $241,000. During the three and six months ended June 30, 2025, the Company recognized impairment of HC Series B Stock of $0 and $41,000 respectively. During the three and six months ended June 30, 2024, the Company did not recognize any impairment of HC Series B Stock.

As a result of the Company’s holding in HC Realty, the Company includes the following summarized income statement information of HC Realty for the three and six months ended June 30, 2025 and 2024 (in thousands):

		Three Months								Six Months
		Ended								Ended
		*June 30,*				June 30,				*June 30,*				June 30,
		*2025*				2024				*2025*				2024
Total revenue		$	5,270			$	5,369			$	10,610			$	10,612
Total expense			8,347				8,936				16,667				17,649
Net loss		$	(3,077	)		$	(3,567	)		$	(6,057	)		$	(7,037	)

The Company’s other investments in related parties totaled $1.1 million as of June 30, 2025 and $808,000 as of December 31, 2024, and included investments in limited liability companies and corporations. These investments do not meet the criteria for accounting under the equity method and are accounted for under the cost adjusted for market observable events less impairment method. As of June 30, 2025, the Company had total receivables and payables from the related parties of $526,000 and $209,000, respectively. As of December 31, 2024, the Company had total receivables and payables from these related parties of $3,000 and $136,000, respectively. During the three- and six-month periods ended June 30, 2025, the Company received $240,000 and $485,000 of distributions from the related party investees, respectively, which are included in “Income (loss) from investments in related parties, net” in the Unaudited Consolidated Statements of Operations. During the three- and six-month periods ended June 30, 2024, the Company received $161,000 and $200,000 of distributions from other investments in related parties, respectively, which are included in “Income (loss) from investments in related parties, net” in the Unaudited Consolidated Statements of Operations.