Perritt Funds, Inc. | ||||||
Notes to the Schedule of Investments (Unaudited) | July 31, 2022 | |||||
1. Security Valuation | ||||||
Exchange-listed securities are generally valued at the last sales price reported by the principal security exchange on which the issue is traded, or if no sale | ||||||
is reported, the mean between the latest bid and ask price unless the Funds' investment advisor believes that the mean does not represent a fair value, in | ||||||
which case the securities are valued as set forth below. Securities listed on NASDAQ are valued at the NASDAQ Official Closing Price. Demand notes, | ||||||
commercial paper, U.S. Treasury Bills and warrants are stated at fair value using market prices if available, or a pricing service when such prices are | ||||||
believed to reflect fair value. Securities for which market quotations are not readily available are valued at their fair value as determined in good faith by | ||||||
the Funds' advisor under procedures established by and under the supervision of the Board of Directors of the Fund. The Funds' fair value procedures allow | ||||||
for the use of certain methods performed by the Funds' advisor to value those securities for which market quotations are not readily available, at a price | ||||||
that a Fund might reasonably expect to receive upon a sale of such securities. For example, these methods may be based on a multiple of earnings, or a discount | ||||||
from market of a similarly freely traded security, or a yield to maturity with respect to debt issues, or a combination of these and other methods. | ||||||
The Funds' may invest in warrants or rights (other than those acquired in units or attached to other securities), which entitle the purchaser to buy | ||||||
equity securities at a specific price for a specific period of time. Warrants and rights have no voting rights, receive no dividends and have no rights with | ||||||
respect to the assets of the issuer. | ||||||
General Accepted Accounting Principles ("GAAP") establishes an authoritative definition of fair value and sets out a hierarchy for measuring fair value. | ||||||
GAAP also requires additional disclosures about the various inputs used to develop the measurements of fair value. These inputs are summarized in the | ||||||
three broad levels listed below: | ||||||
• Level 1 - Quoted prices in active markets for identical securities | ||||||
• Level 2 - Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) | ||||||
• Level 3 - Significant unobservable inputs (including the Funds' own assumptions in determining the fair value of investments). | ||||||
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The | ||||||
following is a summary of the inputs used to value the Funds' securities as of January 31, 2023: |
Perritt MicroCap Opportunities Fund | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 2,043,847 | $ | - | $ | - | $ | 2,043,847 | ||||||||
Consumer Discretionary | 7,617,384 | - | - | 7,617,384 | ||||||||||||
Consumer Staples | 698,250 | - | - | 698,250 | ||||||||||||
Energy | 3,276,449 | - | - | 3,276,449 | ||||||||||||
Financials | 9,058,259 | - | - | 9,058,259 | ||||||||||||
Health Care | 3,769,824 | - | - | 3,769,824 | ||||||||||||
Industrials | 17,377,686 | - | - | 17,377,686 | ||||||||||||
Information Technology | 8,098,005 | - | - | 8,098,005 | ||||||||||||
Materials | 5,004,192 | - | - | 5,004,192 | ||||||||||||
Utilities | 313,950 | - | - | 313,950 | ||||||||||||
Total Common Stocks | 57,257,846 | - | - | 57,257,846 | ||||||||||||
Short Term Investments | 692,538 | - | - | 692,538 | ||||||||||||
Total Investments in Securities | $ | 57,950,384 | $ | - | $ | - | $ | 57,950,384 |
Below is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value: |
Description | Warrants | ||||||||||
Balance as of November 1, 2022 | $ | 0 | |||||||||
Purchases | - | ||||||||||
Sales proceeds and paydowns | 0 | ||||||||||
Accreted discounts, net | - | ||||||||||
Corporate Actions | - | ||||||||||
Realized gain (loss) | - | ||||||||||
Change in unrealized appreciation (depreciation) | 0 | ||||||||||
Transfers into/(out of) Level 3 | - | ||||||||||
Balance as of January 31, 2023 | - | ||||||||||
Change in unrealized appreciation (depreciation) during the | |||||||||||
period for Level 3 investments held at January 31, 2023. | $ | - |
Perritt Ultra MicroCap Fund | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 827,235 | $ | - | $ | - | $ | 827,235 | ||||||||
Consumer Discretionary | 1,105,400 | - | - | 1,105,400 | ||||||||||||
Consumer Staples | 212,015 | - | - | 212,015 | ||||||||||||
Energy | 131,256 | - | - | 131,256 | ||||||||||||
Financials | 847,078 | - | - | 847,078 | ||||||||||||
Health Care | 1,660,258 | - | - | 1,660,258 | ||||||||||||
Industrials | 2,603,743 | - | - | 2,603,743 | ||||||||||||
Information Technology | 3,897,475 | - | - | 3,897,475 | ||||||||||||
Materials | 569,852 | - | - | 569,852 | ||||||||||||
Real Estate | 313,495 | - | - | 313,495 | ||||||||||||
Utilities | 256,140 | - | - | 256,140 | ||||||||||||
Total Common Stocks | 12,423,947 | - | - | 12,423,947 | ||||||||||||
Warrants | ||||||||||||||||
Health Care | - | - | 0 | 0 | ||||||||||||
Materials | 4,485 | - | - | 4,485 | ||||||||||||
Total Warrants | 4,485 | - | 0 | 4,485 | ||||||||||||
Short Term Investments | 345,993 | - | - | 345,993 | ||||||||||||
Total Investments in Securities | $ | 12,774,425 | $ | - | $ | 0 | $ | 12,774,425 |
Below is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value: |
Description | Warrants | |||||||||||
Balance as of November 1, 2022 | $ | 0 | ||||||||||
Purchases | - | |||||||||||
Sales proceeds and paydowns | - | |||||||||||
Accreted discounts, net | - | |||||||||||
Corporate Actions | - | |||||||||||
Realized gain (loss) | - | |||||||||||
Change in unrealized appreciation (depreciation) | - | |||||||||||
Transfers into/(out of) Level 3 | - | |||||||||||
Balance as of January 31, 2023 | $ | 0 | ||||||||||
Change in unrealized appreciation (depreciation) during the | ||||||||||||
period for Level 3 investments held at January 31, 2023. | $ | - |
Please refer to the Schedule of Investments for additional information regarding the composition of the amounts listed above. |