INVESTMENTS

9 Months Ended

Mar. 31, 2023

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 March 31, 2023 and June 30, 2022:

	Fair Value		Fair Value
Asset Type	March 31, 2023		June 30, 2022
Non Traded Companies	$	8,438,289	$	11,517,226
GP Interests (Equity method investment with fair value option election)		9,322,000		18,333,000
LP Interest		168,960		330,000
LP Interests (Equity method investment with fair value option election)		6,789,744		27,363,840
Investment Trust		-		49,178
Total	$	24,718,993	$	57,593,244

Our above total investments at fair value are disclosed in two separate lines as investments and unconsolidated investments (non-securities) in the consolidated balance sheets as of March 31, 2023 and June 30, 2022.

The following table presents fair value measurements of our investments as of March 31, 2023, according to the fair value hierarchy that is described in our annual report on Form 10-K:

Asset Type	Total		Level I		Level II		Level III
Non Traded Companies	$	8,438,289	$	-	$	-	$	8,438,289
GP Interests		9,322,000		-		-		9,322,000
LP Interests		6,958,704		-		-		6,958,704
Total	$	24,718,993	$	-	$	-	$	24,718,993

The following table presents fair value measurements of our investments as of June 30, 2022, according to the fair value hierarchy that is described in our annual report on Form 10-K:

Asset Type	Total		Level I		Level II		Level III
Non Traded Companies	$	11,517,226	$	-	$	-	$	11,517,226
GP Interests		18,333,000		-		-		18,333,000
LP Interests		27,693,840		-		-		27,693,840
Investment Trust		49,178		-		-		49,178
Total	$	57,593,244	$	-	$	-	$	57,593,244

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 nine months ended March 31, 2023:

Balance at July 1, 2022	$	57,593,244
Purchases of investments		303,884
Transfers to Level I		(30,753	)
Transfer to Investments in Real Estate		(8,488,467	)
Proceeds from sales, net		(3,163,025	)
Return of capital distributions		(12,298,337	)
Written off contingent consideration		(57,875	)
Net realized gains		821,375
Net unrealized loss		(9,961,053	)
Ending balance at March 31, 2023	$	24,718,993

The transfer of $30,753 of investments from Level III to Level I category during the nine months ended March 31, 2023 resulted from one of our investments converting from a non-traded REIT to publicly traded REIT. Transfers are assumed to have occurred at the beginning of the period.

For the nine months ended March 31, 2023, changes in unrealized gains, net included in earnings relating to Level III investments still held at March 31, 2023 were $9,577,691.

Balance at July 1, 2021	$	70,340,043
Purchases of investments		3,343,802
Transfers to Level I		(230,160	)
Proceeds from sales, net		(29,230,856	)
Return of capital distributions		(11,807,238	)
Net realized gain		8,765,565
Net unrealized gains		6,170,851
Ending balance at March 31, 2022	$	47,352,007

The transfers of $230,160 from Level III to Level I category during the nine months ended March 31, 2022 resulted from one of our investments converting from a non-traded REIT to publicly traded REIT. Transfers are assumed to have occurred at the beginning of the period.

For the nine months ended March 31, 2022, changes in unrealized gains, net included in earnings relating to Level III investments still held at March 31, 2022 were $10,108,363.

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at March 31, 2023:

Asset Type	Fair Value		Primary Valuation Techniques	Unobservable Inputs Used	Range		Weighted Average

Non Traded Company	$	955,737	Estimated Liquidation Value	Sponsor provided value		20%
Non Traded Companies		7,482,552	Market Activity	Secondary market industry publication

GP Interests		9,322,000	Direct Capitalization Method	Capitalization rate		6.3% - 6.5%		6.4%
				Discount rate		6.8% - 7.0%		7.0%

LP Interests		6,393,260	Discounted Cash Flow	Discount rate		6.3% - 9.0%		6.6%
LP Interests		396,484	Estimated Liquidation Value	Sponsor provided value		0% - 12.0%		0.2%
LP Interest		168,960	Market Activity	Contracted sale of property

	$	24,718,993

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2022:

Asset Type

Fair Value

Primary Valuation

Techniques

Unobservable Inputs Used

Range

Weighted

Average

Non Traded Companies

1,011,081

Estimated Liquidation Value

Sponsor provided value

Liquidity discount

25.0% - 75.0%

25.0%

Non Traded Companies

10,506,145

Market Activity

Secondary market industry publication

Contracted purchase of security

GP Interests

18,333,000

Market Activity

Contracted purchase price

LP Interests

21,550,730

Direct Capitalization Method

Capitalization rate

4.0% - 5.0%

4.2%

Liquidity discount

15%

LP Interests

5,806,290

Discounted Cash Flow

Discount rate

6.3% - 9.0%

8.6%

LP Interest

6,820

Estimated Liquidation Value

Sponsor provided value

Liquidity discount

12%

LP Interest

330,000

Market Activity

Secondary market industry publication

Investment Trust

49,178

Direct Capitalization Method

Capitalization rate

Liquidity discount

15%

57,593,244

Impact of COVID-19 Pandemic

The COVID-19 pandemic and related changes in tenant behavior have adversely impacted the fair value of our investments as of March 31, 2023 and June 30, 2022, and the values assigned as of this date may differ materially from the values that we may ultimately realize with respect to our investments. The impact of the COVID-19 pandemic may not yet be fully reflected in the valuation of our investments as our valuations, and particularly valuations of private investments and private companies, are inherently uncertain, may fluctuate over short periods of time and are often based on estimates, comparisons and qualitative evaluations of private information that is often from a time period earlier, generally two to three months, than the quarter for which we are reporting. Additionally, we may not have yet received information or certifications from our portfolio companies that indicate any or the full extent of declining performance or non-compliance with debt covenants, as applicable, as a result of the COVID-19 pandemic. As a result, our valuations at March 31, 2023 and June 30, 2022, may not show the complete or continuing impact of the COVID-19 pandemic and the resulting measures taken in response thereto. Accordingly, we may continue to incur additional net unrealized losses or may incur realized losses subsequent to March 31, 2023, which could have a material adverse effect on our business, financial condition and results of operations.

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. Our investment in Dimension 28, LLP was determined to be significant under the income test as of March 31, 2023. In addition, our equity method investments accounted under the fair value option were material in aggregate as of March 31, 2023.

The summarized financial information of Dimension 28, LLP and aggregated summarized financial information of all equity method investees as of March 31, 2023 is as follows:

	Dimension 28, LP		All Equity Method Investee Aggregated
Total Assets	$	1,147,171	$	94,267,563
Total Liabilities	$	10,125	$	70,626,037
Total Equities	$	1,137,046	$	23,641,526
Total Revenues	$	31,719,093	$	42,450,387
Total Expenses	$	5,212,716	$	14,114,665
Total Net Income	$	26,506,377	$	28,335,722

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 March 31, 2023 and June 30, 2022, none of our investments in securities was considered an unconsolidated significant subsidiary under the SEC rules described above.