Note 3 - Investment in Affiliate

3 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

3. Investment in Affiliate

HC Realty’s 10.00% Series B Cumulative Convertible Preferred Stock (the “Series B Stock”) is not deemed to be in-substance common stock and is accounted for using the measurement alternative for equity investments with no readily determinable fair value. The Series B Stock will be reported at cost, adjusted for impairments or any observable price changes in ordinary transactions with identical or similar investments issued by HC Realty.

The following table summarizes the Company’s investment in HC Realty as of March 31, 2022 and December 31, 2021 (in thousands):

	Ownership %						Investment in Affiliate Balance				Loss recorded in the Statements of Operations (b)
											For the Three Months Ended March 31,
	March 31, 2022			December 31, 2021			March 31, 2022		December 31, 2021		2022			2021
HC Realty Series B Stock (a)		26.8	%		26.8	%	$	10,250	$	10,250	$	-			-
HC Realty common stock		7.1	%		7.1	%		1,066		1,200		(93	)		(116	)
Total		33.9	%		33.9	%	$	11,316	$	11,450	$	(93	)	$	(116	)

(a) Represents investments in shares of HC Realty Series B Stock with a basis of $10.25 million. Each share of Series B Stock can be converted into one share of HC Realty common stock at a conversion price equal to the lesser of $9.10 per share or the fair market value per share of HC Realty common stock, subject to adjustment upon the occurrence of certain events.

(b) Loss from these investments is included in “Loss from affiliate” in the consolidated statement of operations. Since HC Realty is a Real Estate Investment Trust and not a taxable entity, the loss is not reported net of taxes.

The Company’s investment in HC Realty common stock is accounted for under the equity method of accounting.