Cost and Equity Method Investments

12 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

The Company holds cost method and equity method investments as of June 30:


	2024		2023
in thousands
Cost method investments	$	2,645	$	4,645
Equity method investments	—		848
Total investments	$	2,645	$	5,493

Nonconsolidated Entities

Cost Method Investments

As of June 30, 2024 and 2023, the Company maintained one investment and two investments, respectively, that were accounted for using the cost method. The Company’s ownership interests are less than 20% of the voting stock of the investments and the Company does not have the ability to exercise significant influence over the operating and financial policies of the investments. The investments do not have a readily determinable fair value and the Company has elected to record the investments at cost, less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.

JetDoc

In August 2021, the Company acquired a minority interest equal to 806,481 shares of the outstanding common stock of Jetdoc, Inc. (“Jetdoc”), a telehealth and virtual urgent care app dedicated to effectively connecting users with medical professionals, for cash consideration of $2.0 million. We determined that indicators of impairment were present as of December 31, 2023, and recognized an impairment loss of $1.9 million during the three months then ended. During the three months ended March 31, 2024, we determined that the remaining balance of our investment in Jetdoc was impaired and recognized an additional impairment loss of $0.1 million. Impairment losses are included in gain on cost and equity method investments on our consolidated statements of operations. During the year ended June 30, 2023, there were no observable price changes or impairments recorded. As of June 30, 2024, the Company does not have any ownership interest in JetDoc.

Dispatch Health

On June 14, 2019, the Company invested $1.5 million in DispatchHealth Holdings, Inc., ("DispatchHealth") through the purchase of a portion of its outstanding Series B Preferred Stock. On April 2, 2020, the Company invested an additional $1.1 million through the purchase of a portion of its outstanding Series C Preferred Stock. As of June 30, 2024, the balance of the Company’s investment was $2.6 million which represents the maximum exposure to loss. The investment does not have a readily determinable fair value and the Company has elected to record the investment at cost, less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. During the years ended June 30, 2024 and 2023, there were no observable price changes or impairments.

Equity Method Investments

Pinewood Lodge

Through May 2, 2024, the Company’s operations included a Senior Housing unit that primarily included the accounts of Continental Community Housing (“CCH”), a wholly-owned subsidiary of the Company and the general partner of PWD, which was organized to develop, construct, own, maintain, and operate certain apartment complexes intended for rental to low-income elderly individuals aged 62 or older.

PWD was a VIE, but the Company was not the primary beneficiary. The Company did not have the power to direct the activities that most significantly impacted the economic performance of PWD. Accordingly, the Company did not consolidate PWD. PWD was accounted for using the equity method of accounting. The equity earnings of PWD were

insignificant. As of June 30, 2023, the balance of the Company’s investment in PWD was $0.8 million, which represented the maximum exposure to loss.

On March 13, 2024, PWD entered into a Purchase and Sale Agreement for the sale of all of PWD's property, including the Senior Housing unit. On May 2, 2024, PWD closed on the sale of its Senior Housing property for $9.5 million. Upon completion of the sale, PWD ceased providing senior housing services and in June 2024 was dissolved. Following the dissolution, the remaining proceeds from the sale were distributed in accordance with the partnership agreement and as otherwise agreed by the partners.

Consolidated Entities

Controlling Interest

InnovAge Florida PACE – Orlando

On May 28, 2024, the Company entered into a Joint Venture Agreement with Orlando Health (“OHI”) to develop and manage PACE centers to serve communities in Orlando, Florida. In connection with the joint venture, the joint venture, InnovAge Florida PACE – Orlando was formed. The Company contributed $26.1 million for its controlling membership interest of 90%. As result, the joint venture’s results are consolidated in the Company’s consolidated financial statements. OHI contributed $2.9 million in cash for its 10% interest.

Noncontrolling Interest

Senior Housing

The Company’s operations include a 0.01% partnership interest in SH1, which was organized to develop, construct, own, maintain, and operate certain apartment complexes intended for rental to low-income elderly individuals aged 62 or older. SH1 is a VIE. The Company is the primary beneficiary of SH1 and consolidates SH1. The Company is the primary beneficiary of SH1 as it has the power to direct the activities that are most significant to SH1 and has an obligation to absorb losses or the right to receive benefits from SH1. The most significant activity of SH1 is the operation of the senior housing facility. The Company has provided a subordinated loan to SH1 and has provided a guarantee for a convertible term loan held by SH1.

The following table shows the assets and liabilities of SH1 as of June 30:


	2024		2023
	in thousands
Assets
Cash and cash equivalents	$	816	$	648

Prepaid expenses and other	5		1
Property, plant and equipment, net	9,465		9,933
Deposits and other, net	409		402
Liabilities
Accounts payable and accrued expenses	295		268


Noncurrent liabilities	456		454
Long-term debt, net of debt issuance costs	3,739		3,784

Redeemable Noncontrolling Interest

InnovAge Sacramento

On March 18, 2019, in connection with the formation of InnovAge Sacramento, the joint venture with Adventist Health System/West (“Adventist”) and Eskaton Properties, Incorporated (“Eskaton”), the Company contributed $9.0 million in cash and land valued at $4.2 million for a 59.9% membership interest in the joint venture. Further, Adventist contributed $5.8 million in cash and Eskaton contributed $3.0 million in cash for membership interests of 26.4% and 13.7%, respectively. In fiscal year 2021, the Company made an additional contribution of $52,000 and obtained an additional 0.1% membership interest in the joint venture, which resulted in the Company obtaining control and consolidating InnovAge Sacramento as of January 1, 2021.

The InnovAge California PACE-Sacramento LLC Limited Liability Company Agreement (the “JV Agreement”) includes numerous provisions whereby, if certain conditions are met, the joint venture may be required to purchase, at fair market value, certain members’ interests or certain members may be required to purchase, at fair market value, the interests of certain other members. The Company’s investment in InnovAge Sacramento includes a put right for the noncontrolling interest holders to require the Company to repurchase the interest of the noncontrolling interest holders at fair value, after the initial term of the management services agreement in 2028. As of June 30, 2024, none of the conditions specified in the JV Agreement had been met. Accordingly, these put rights held by the noncontrolling interests of the joint venture are required to be presented as temporary equity. As of June 30, 2024 and 2023, the Company’s redeemable noncontrolling interest was recorded at fair value of $22.2 million and carrying value of $12.7 million, respectively.