INVESTMENTS

6 Months Ended

Dec. 31, 2021

NOTE 4 – INVESTMENTS

The following table summarizes the composition of the Company’s equity method investments with fair value option election and other equity securities at fair value as of December 31, 2021 (successor basis):

Asset Type	Fair Value December 31, 2021
Publicly Traded Companies	$	1,164
Promissory Note		3,014,838
Non Traded Companies		21,344,900
Non Traded Company (Equity method investment with fair value option election)		3,010,784
LP Interests		292,830
LP Interests (Equity method investment with fair value option election)		35,645,406
Investment Trust		39,776
Total	$	63,349,698

The following table summarizes the composition of the Company’s equity method investments with fair value option election and other equity securities at fair value as of June 30, 2021 (successor basis):

Asset Type	Fair Value June 30, 2021
Publicly Traded Companies	$	169,200
Non Traded Companies		29,426,441
Non Traded Company (Equity method investment with fair value option election)		2,867,911
LP Interests		288,494
LP Interests (Equity method investment with fair value option election)		37,722,483
Investment Trust		34,714
Total	$	70,509,243

The Company’s above total investments at fair value are disclosed in two separate lines as investments and unconsolidated investments (non-securities) in the consolidated balance sheet as of December 31, and June 30, 2021.

The following table presents fair value measurements of the Company’s investments as of December 31, 2021, according to the fair value hierarchy that is described in our annual report on Form 10-K (successor basis):

Asset Type	Total		Level I		Level II		Level III
Publicly Traded Companies	$	1,164	$	1,164	$	-	$	-
Non Traded Companies		24,355,684		-		-		24,355,684
LP Interests		35,938,236		-		-		35,938,236
Promissory Note		3,014,838		-		-		3,014,838
Investment Trust		39,776		-		-		39,776
	$	63,349,698	$	1,164	$	-	$	63,348,534

Liability
Securities Sold, Not Yet Purchased		$	7,837,286			$	7,837,286			$	-			$	-

The following table presents fair value measurements of the Company’s investments as of June 30, 2021, according to the fair value hierarchy that is described in our annual report on Form 10-K (successor basis):

Asset Type	Total		Level I		Level II		Level III
Publicly Traded Companies	$	169,200	$	169,200	$	-	$	-
Non Traded Companies		32,294,352		-		-		32,294,352
LP Interests		38,010,977		-		-		38,010,977
Investment Trust		34,714		-		-		34,714
Total	$	70,509,243	$	169,200	$	-	$	70,340,043

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 six months ended December 31, 2021 (successor basis):

Balance at July 1, 2021	$	70,340,043
Purchases of investments		3,232,548
Transfers to Level I		(230,160	)
Proceeds from sales, net		(14,307,919	)
Return of capital distributions		(4,204,209	)
Net realized gain		3,656,387
Net unrealized gains		4,861,844
Ending balance at December 31, 2021	$	63,348,534

The transfer of $230,160 of investments from Level III to Level I category during the six months ended December 31, 2021 resulted from one of the Company’s 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 six months ended December 31, 2021, changes in unrealized gains, net included in earnings relating to Level III investments still held at December 31, 2021 were $6,731,322.

Balance at July 1, 2020	$	86,460,491
Purchases of investments		13,448,477
Transfers to Level I		(1,900,470	)
Consolidation of the Operating Partnership		(8,027,584	)
Proceeds from sales, net		(1,011,748	)
Return of capital		(11,486,835	)
Net realized gains		30,050
Net unrealized losses		(8,634,492	)
Ending balance at December 31, 2020	$	68,877,889

The transfer of $1,900,470 of investments from Level III to Level I category during the six months ended December 31, 2020 resulted from one of the Company’s 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 six months ended December 31, 2020, changes in unrealized losses, net included in earnings relating to Level III investments still held at December 31, 2020 were $1,836,915.

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at December 31, 2021 (successor basis):

Asset Type

Fair Value

Primary Valuation

Techniques

Unobservable Inputs Used

Range

Weighted

Average

Non Traded Company

3,010,784

Direct Capitalization Method

Capitalization rate

7.37%

Liquidity discount

33.0%

Non Traded Companies

21,677

Estimated Liquidation Value

Sponsor provided value

Liquidity discount

82.0%

SEC filings

Non Traded Companies

21,323,223

Market Activity

Secondary market industry publication

Contracted sale of the property

LP Interests

17,108,315

Direct Capitalization Method

Capitalization rate

3.6% - 8.0%

4.93%

Liquidity discount

33.0%

LP Interest

5,000,000

Discounted Cash Flow

Discount rate

9.0%

LP Interests

8,534,000

Estimated Liquidation Value

Sponsor provided value

Contracted sale of the property

LP Interest

5,295,921

Market Activity

Contracted sale of the property

Investment Trust

39,776

Direct Capitalization Method

Capitalization rate

6.0%

Liquidity discount

33.0%

Promissory Note

3,014,838

Estimated Liquidation Value

Forbearance agreement

63,348,534

The following table shows quantitative information about significant unobservable inputs related to the Level III fair value measurements used at June 30, 2021 (successor basis):

Asset Type

Fair Value

Primary Valuation

Techniques

Unobservable Inputs Used

Range

Wt.

Average

Non Traded Company

2,867,911

Direct Capitalization Method

Capitalization rate

7.9%

Liquidity discount

32.0%

Non Traded Companies

66,337

Estimated Liquidation Value

Sponsor provided value

Liquidity discount

2.0% - 67.0%

53.6%

Bankruptcy filing

Non Traded Companies

29,360,104

Market Activity

Secondary market industry publication

Underlying property sales contract

Acquisition cost

LP Interests

19,717,495

Direct Capitalization Method

Capitalization rate

3.5% - 7.5%

5.8%

Liquidity discount

20.0% - 33.0%

20.9%

LP Interests

11,448,000

Discounted Cash Flow

Discount rate

9.0% - 20.0%

13.2%

Discount term (months)

LP Interests

6,845,482

Estimated Liquidation Value

Sponsor provided value

Underlying property sales contract

Liquidity discount

5.0% - 46.19%

16.1%

Appraisal

Investment Trust

34,714

Direct Capitalization Method

Capitalization rate

6.0%

Liquidity discount

33.0%

70,340,043

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 December 31, 2021 and June 30, 2021, 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 December 31, 2021 and June 30, 2021, 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 December 31, 2021, which could have a material adverse effect on our business, financial condition and results of operations.

Summarized or Separate Audited 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 Rules 3-09 and 4-08(g) of Regulation S-X, 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. Rule 3-09 of Regulation S-X requires separate audited financial statements for any significant equity method investments 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%. For interim reporting, under SEC Rule 10-01(b)(1), the investment and income tests prescribed under Rule 3-09 should be applied to all of our equity method investments measured at fair value under the Fair Value Option and if either of the two tests exceed 20%, summarized income statement information of each equity method investee is required to be disclosed separately. The summarized income statement information is not required for any equity method investee that would not be required, pursuant to Rule 13a-13 or 15d-13, to file quarterly financial information with the SEC if it were a registrant.

In addition to the SEC rules, ASC 323-10-50-3(c) requires summarized financial statements of its equity method investments, including those reported under the fair value option, if they are material individually or in aggregate. The Company’s equity method investments accounted under the fair value option were material in aggregate as of December 31, 2021. The aggregated summarized financial information of the investees is as follows:

Total Assets	$	234,277,621
Total Liabilities	$	151,293,866
Total Equities	$	82,983,755
Total Revenues	$	21,707,508
Total Expenses	$	22,083,535
Total Net Loss	$	(376,026	)

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 December 31, 2021 and June 30, 2021, none of our investments in securities was considered a significant subsidiary under the SEC rules described above.