NOTE

NVESTMENTS

, INCLUDING INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Short-term Investments

Short-term investments consist of certificates of deposit having maturity dates of less than

twelve

months and are carried at cost, U.S. Treasury securities and a corporate bond that are held to maturity and mature in less than

twelve

months, and a convertible note receivable. The certificates of deposit are held to maturity and mature in the upcoming year. The U.S. Treasury notes, the corporate bond, and the certificates of deposit are held by UC&S. For the

six

months ended

June 30, 2018,

gains on redemptions of U.S. Treasury notes were

$2,137.

	June 30,		December 31,
	2018		2017

Certificates of deposit	$	816,709	$	746,219
U.S. Treasury notes and corporate bond		4,039,422		809,184
Convertible note receivable		-		103,896

Total	$	4,856,131	$	1,659,299

Convertible Note Receivable

September 13, 2016,

we purchased an unsecured convertible note receivable from Breezeway Homes, Inc. (“Breezeway”) for the principal sum of

$100,000.

The note bore interest at

per annum, with principal and accrued interest payable upon demand at the earlier of

December 31, 2018

or the closing of Breezeway’s next equity financing.

January 2018,

Breezeway completed a

second

round of equity financing, in which we agreed to tender our promissory note in exchange for preferred stock. At the time that the note receivable was tendered, principal, together with accrued interest, was

$104,019.

December 31, 2017,

the balance of the note plus accrued interest was

$103,896.

As part of the loan arrangement, the parties entered into a memorandum of understanding for the parties to work together on the sale of damage waiver insurance related products, which the parties

may

develop, to property managers, lessors, and renters for residential homes through Breezeway’s platform.

Note Receivable

April 27, 2018,

we made a short-term loan to CB&T Holding Corporation (“CB&T”). In connection with the short-term loan, CB&T issued us a promissory note in the principal amount of

$2,116,972,

with an interest rate of

15%

per annum, and reimbursed us for certain costs associated with the transaction. The loan was repaid on

June 1, 2018

together with

$29,990

in interest.

U.S. Treasury Trading Securities

and U.S. Treasury Securities Available for Sale

Our security investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value on the balance sheet in current assets, with the change in fair value during the period included in earnings. Our trading securities consist of U.S. Treasury securities. Trading securities as of

June 30, 2018

and

December 31, 2017

are as follows:

			Gross
			Unrealized		Fair
	Cost		Gain		Value

U.S. Treasury bills, June 30, 2018	$	-	$	-	$	-

U.S. Treasury bills, December 31, 2017	$	82,968,614	$	132,191	$	83,100,805

We classify our investments in debt securities that we intend to hold for indefinite periods of time as “available for sale.” Our securities available for sale are carried at fair value in the balance sheet. Because we have elected the fair value option for these securities, unrealized holding gains and losses during the period are included in earnings. Interest income is recognized at the coupon rate. Securities available for sale as of

June 30, 2018

are as follows:

			Gross
			Unrealized		Fair
	Cost		Gain		Value

U.S. Treasury securities, June 30, 2018	$	150,100,946	$	245,494	$	150,346,440

Long-term Investments

Long-term investments consist of certificates of deposit having maturity dates in excess of

twelve

months, and U.S. Treasury securities. The certificates of deposit have maturity dates ranging from

2019

through

2021.

We have the intent and the ability to hold the investments to maturity. Certificates of deposit and U.S. Treasury securities are stated at carrying value which approximates fair value and are held by UC&S.

Long-term investments consist of the following:

	June 30,		December 31,
	2018		2017

U.S. Treasury securities, held to maturity	$	2,083,624	$	2,820,855
Certificates of deposit		931,291		1,080,426
Preferred stock		104,019		-
Non-voting common units of Dream Finders Holdings, LLC		10,000,000		10,000,000
Voting common stock of CB&T Holding Corporation		19,058,485		-

Total	$	32,177,419	$	13,901,281

Cost Investment

May 31, 2018,

we invested

$19,058,485

in voting common stock of CB&T, the privately held parent company of Crescent Bank & Trust. Our investment represents

14.99%

of CB&T’s outstanding common stock. CB&T is a closely held corporation, whose majority ownership rests with

one

family.

During late

December 2017,

we invested

$10,000,000

in non-voting common units of Dream Finders Holdings, LLC, a national homebuilder. Excluding their non-convertible preferred equity, our investment represents an approximately

ownership stake in the company.

During

January 2018,

we exchanged our convertible note receivable from Breezeway for

31,227

shares of preferred stock. The preferred stock is noncumulative and has a dividend rate of

$.2665

per share, should dividends be declared. The preferred stock has

one

vote per share and is convertible into whole shares of common stock, determined according to the conversion formula contained in Breezeway’s amended and restated articles of incorporation.

We reviewed our investments as of

June 30, 2018

and

December 31, 2017

and concluded that

impairment to the carrying value was required.

Investment in

Unconsolidated

Affiliates

We have various investments in equity method affiliates, whose businesses are in real estate and real estate services. Our interest in these affiliates ranges from

7.15%

30%.

Two of the investments in affiliates, Logic Real Estate Companies, LLC and TAG SW

LLC having a combined carrying amount of

$417,287

June 30, 2018,

are managed by a member of our board of directors. During the

six

months ended

June 30, 2018,

TAG SW

LLC sold its remaining investments and realized a gain on the sale of its assets.

The following table is a reconciliation of our investments in equity affiliates as presented in investments in unconsolidated affiliates on our consolidated balance sheets:

	June 30,			December 31,
	2018			2017

Beginning of period	$	952,128		$	871,918
Additional investments in unconsolidated affiliates		-			66,000
Distributions received		(382,443	)		(59,550	)
Loss on investment in affiliate		(107,630	)		-
Equity in income of unconsolidated affiliates		385,091			73,760

End of period	$	847,146		$	952,128

The loss on investment in affiliate is related to the wind-down of TAG SW

LLC and is included on our consolidated statements of operations in the caption “Loss on disposition of investments.”