NOTE 4 – INVESTMENTS

 

The following table summarizes the composition of our equity method investments with fair value option election and other equity securities at fair value as of June 30, 2026 and 2025. On the consolidated balance sheets, these investments are reflected in two separate lines: (i) investments at fair value, which are classified as equity securities under ASC Topic 321, and (ii) equity method investments with fair value option election.

 

During the year ended June 30, 2026, we realized a total net gain of $24,302 from nine investment liquidations and disposals (Highlands REIT, Inc., Starwood Real Estate Income Trust, Inc. – Class S, Starwood Real Estate Income Trust, Inc. – Class I, SmartStop Self Storage REIT, Inc. – Class A, SmartStop Self Storage REIT, Inc. – Class A sold short, SmartStop Self Storage REIT, Inc. – Class T, National Healthcare Properties, Inc., CNL Healthcare Properties, Inc. and Sonida Senior Living, Inc.).

During the year ended June 30, 2025, we realized a total net gain of $132,434 from four investment liquidations and disposals (Blackstone Real Estate Income Trust, Inc., Highlands REIT, Inc., National Healthcare Properties, Inc., and 5210 Fountaingate, LP).

The following table presents fair value measurements of our investments as of June 30, 2026 and 2025, according to the fair value hierarchy:

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2026:

The transfers of $1,081,429 from Level III to Level I category during the year ended June 30, 2026 resulted from one of the Company’s investments converting from a non-traded company to a publicly traded company and one of the Company’s investments merging with a publicly traded company, survived by the latter. Transfers are assumed to have occurred at the beginning of the year.

For the year ended June 30, 2026, net change in unrealized gains included in earnings relating to Level III investments still held at June 30, 2026 were $1,213,621.

The following is a reconciliation of the beginning and ending balances for investments measured at fair value on a recurring basis using significant unobservable inputs (Level III of the fair value hierarchy) for the year ended June 30, 2025:

For the year ended June 30, 2025, net change in unrealized losses included in earnings relating to Level III investments still held at June 30, 2025 were $2,680,923.

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2026:

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2025:

Summarized Financial Statements for Equity Method Investments (Fair Value Option)

Our investments in securities are generally in small and mid-sized companies in a variety of industries. In accordance with the Rule 8-03(b)(3) of Regulation S-X applicable for smaller reporting companies, we must determine which of our equity method investments measured at fair value under the Fair Value Option are considered “significant”, if any. Regulation S-X mandates the use of three different tests to determine if any of our investments are considered significant investments: the investment test, the asset test, and the income test. The rule requires summarized financial statements for any significant equity method investments in an annual and interim report if any of the three tests exceed 20%.

In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of our equity method investments, including those reported under the fair value option, if they are material individually or in aggregate.

None of our equity method investments accounted under the fair value option were determined to be individually significant under any of the tests as of June 30, 2026. Furthermore, our equity method investments accounted under the fair value option in aggregate were not material as of June 30, 2026.

Unconsolidated Significant Subsidiaries

In accordance with SEC Rules 3-09 and 4-08(g) of Regulation S-X, we must determine which of our investments in securities are considered “significant subsidiaries”, if any. Regulation S-X mandates the use of three different tests to determine if any of our controlled investments are significant subsidiaries: the investment test, the asset test, and the income test. Rule 3-09 of Regulation S-X requires separate audited financial statements for any unconsolidated majority-owned subsidiary in an annual report if any of the three tests exceed 20%. Rule 4-08(g) of Regulation S-X requires summarized financial information in an annual report if any of the three tests exceeds 10%.

As of June 30, 2026 and 2025, none of our investments in securities were considered unconsolidated significant subsidiaries under the SEC rules described above.