Note 3 - Investments in Related Parties

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

3. Investments in Related Parties

The following table summarizes the Company’s investment in HC Realty as of March 31, 2024, and  December 31, 2023 (dollar amounts in thousands):

											Loss recorded in the Consolidated
	Ownership %						Carrying Value				Statements of Operations(b)
											For the Three
											Months Ended
											March 31,
	March 31,			December 31,			March 31,		December 31,
	2024			2023			2024		2023		2024			2023
HC Series B Stock (a)		26.3	%		26.3	%	$	10,250	$	10,250	$	-		$	-
HC Common Stock		1.1	%		1.1	%		275		301		(26	)		(121	)
Total		27.4	%		27.4	%	$	10,525	$	10,551	$	(26	)	$	(121	)

(a) Represents investments in shares of HC Series B Stock with a basis of $10.25 million. Each share of HC Series B Stock has voting rights on an as converted basis and can be converted into shares of HC Common Stock at a conversion ratio equal to $10.00 per share divided by the lesser of $9.10 per share or the fair market value per share of HC Common Stock, subject to adjustment upon the occurrence of certain events.

(b) Loss from these investments is included in “Net income (loss) from investments in related parties” in the Unaudited Consolidated Statements of Operations. Since HC Realty is a REIT and not a taxable entity, the loss is not reported net of taxes.

The Company’s investment in HC Common Stock is accounted for under the equity method of accounting as the Company has concluded it has a significant influence over the investee. The HC Series B Stock is not deemed to be in-substance common stock and is accounted for under the cost adjusted for market observable events less impairment method.

As a result of the Company’s holding in HC Realty, the Company includes the following summarized income statement information of HC Realty for the three months ended March 31, 2024 and 2023 (in thousands):

	Three Months
	Ended
	March 31,			March 31,
	2024			2023
Total revenue	$	5,243		$	4,949
Total expense		8,713			7,512
Net loss	$	(3,470	)	$	(2,563	)

The Company’s other investments in related parties were $282,000 as of both  March 31, 2024 and December 31, 2023, and include investments in limited liability companies and corporations. These investments do not meet the criteria for accounting under the equity method and are accounted for under the cost adjusted for market observable events less impairment method. As of March 31, 2024, the Company had total receivables from these related parties of $40,000 and payables of $42,000. As of December 31, 2023, the Company had total receivables and payables from these related parties of $27,000 and $73,000, respectively. During the three month period ended March 31, 2024, the Company received $161,000 of distributions from other investments in related parties, which are included in “Net income (loss) from investments in related parties” in the Unaudited Consolidated Statements of Operations. No distributions were received from other investments in related parties during the three month period ended March 31, 2023.