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Valuation of investments—The Fund calculates its net asset value based on the current market value for its portfolio securities. The Fund normally obtains market values for its securities from independent pricing sources and broker-dealers. Independent pricing sources may use last reported sale prices or if not available the most recent bid price, current market quotations or valuations from computerized “matrix” systems that derive values based on comparable securities. A matrix system incorporates parameters such as security quality, maturity and coupon, and/or research and evaluations by its staff, including review of broker-dealer market price quotations, if available, in determining the valuation of the portfolio securities. If a market value is not available from an independent pricing source or a broker-dealer for a particular security, that security is valued at fair value as determined in good faith by or under the direction of the Fund’s Board of Directors (the “Board”). Various factors may be reviewed in order to make a good faith determination of a security’s fair value. Factors for other securities may include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; and changes in overall market conditions. If events occur that materially affect the value of securities between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities may be fair valued. U.S. and foreign debt securities including short-term debt instruments having a maturity of 60 days or less shall be valued in accordance with the price supplied by a Pricing Service using the evaluated bid price. Money market mutual funds, demand notes and repurchase agreements are valued at cost, unless the Board or its delegate determines that this does not represent fair value.

On March 30, 2018, U.S. and certain other financial markets were closed, while some foreign markets were open.  Price changes of securities in those foreign markets were immaterial to the Fund.  The Fund’s securities were valued as of the close of regular trading on the last day the NYSE was open during the period.

The Fund has adopted fair valuation accounting standards that establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require additional disclosures about the various input and valuation techniques used in measuring fair value. Fair value inputs are summarized in the three broad levels listed below:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2—Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3—Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available; representing the Fund’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The Fund adopted Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-04 (“ASU 2011-04”), Fair Value Measurement: Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRS, which, among other things, clarifies existing disclosure requirements provided by ASC 820 regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value.

The significant unobservable inputs used in fair value measurement of the Fund’s investment companies, corporate bonds, promissory notes, liquidation claims and warrants are (1) cost and (2) indicative bids or price ranges from dealers, brokers, or market makers. Significant changes in any of these inputs in isolation may result in a change in higher fair value measurement.

In accordance with procedures established by the Fund’s Board of Directors, the Adviser shall initially value non-publicly-traded securities (for which a current market value is not readily available) at their acquisition cost less related expenses, where identifiable, unless and until the Adviser determines that such value does not represent fair value.

The Adviser sends a memorandum to the Chairman of the Valuation Committee with respect to any non-publicly-traded securities that are valued using a method other than cost detailing the reason, factors considered, and impact on the Fund’s NAV. If the Chairman determines that such fair valuation(s) require the involvement of the Valuation Committee, a special meeting of the Valuation Committee is called as soon as practicable to discuss such fair valuation(s). The Valuation Committee of the Board consists of at least two non-interested Directors, as defined by the Investment Company Act of 1940.

At each regular quarterly Board meeting, the Adviser delivers a written report (the “Quarterly Report”) to the Board regarding any recommendations of fair valuation during the past quarter, including fair valuations which have not changed. The Board reviews the Quarterly Report and discusses the valuation of the fair valued securities.

The Valuation Committee reviews all Quarterly Reports and any other interim reports, and reviews and approves the valuation of all fair valued securities. This review includes a review and discussion of an updated fair valuation summary with appropriate levels of representatives of the Adviser’s management.

 

The following is a summary of the fair valuations according to the inputs used as of March 31, 2018 in valuing the Fund's investments:

		Quoted Prices in Active				Significant Other
		Markets for Identical				Observable Inputs				Unobservable Inputs
		Investments (Level 1)*				(Level 2)*				(Level 3)**				Total
Investment Companies		$	96,317,283			$	-			$	-			$	96,317,283
Preferred Stocks
Real Estate Investment Trusts			4,611,006				-				6,083,000				10,694,006
Common Stocks
Consumer Finance			893,192				-				-				893,192
Hotels, Restaurants & Leisure			5,069,096				-				-				5,069,096
Independent Power & Renewable Electricity Producers			40,487				-				-				40,487
Insurance			9,489,546				-				-				9,489,546
Professional Services			5,997,683				-				-				5,997,683
Real Estate Investment Trusts			6,050,634				-				-				6,050,634
Real Estate Management & Development			231,920				-				-				231,920
Special Purpose Acquisition Vehicles			23,580,527				7,007,267				-				30,587,794
Liquidating Trusts			-				-				2,335,972				2,335,972
Convertible Notes			-				1,908,104				273,806				2,181,910
Corporate Bonds			-				-				15,000				15,000
Corporate Notes			-				7,028,000				-				7,028,000
Senior Secured Notes			-				-				1,600,000				1,600,000
Warrants			806,987				250,680				0				1,057,667
Rights			321,532				227,931				-				549,463
Money Market Funds			16,715,046				-				-				16,715,046
Total		$	170,124,939			$	16,421,982			$	10,307,778			$	196,854,699

* Transfers between Levels are recognized at the end of the reporting period.
**The Fund measures Level 3 activity as of the beginning and end of each financial reporting period.
Transfers between Level 1 and Level 2 securities as of March 31, 2018 resulted from securities priced previously with an official close price (Level 1 securities) or on days where there
is not an official close price the bid price is used (Level 2 securities).  Transfers as of March 31, 2018 are summarized in the table below:

Transfers into Level 1
Common Stock
Independent Power & Renewable Electricity Producers		$	40,487
Special Purpose Acquisition Vehicle			5,310,416
Warrants			150,382
Rights			33,734
Transfers out of Level 1
Common Stock
Special Purpose Acquisition Vehicle		$	(2,104,085	)
Warrants			(117,504	)
Rights			(161,006	)
Net transfers in and/or out of Level 1		$	3,152,424
Transfers into Level 2
Common Stock
Special Purpose Acquisition Vehicle		$	2,104,085
Warrants			117,504
Rights			161,006
Transfers out of Level 2
Common Stock
Independent Power & Renewable Electricity Producers		$	(40,487	)
Special Purpose Acquisition Vehicle			(5,310,416	)
Warrants			(150,382	)
Rights			(33,734	)
Net transfers in and/or out of Level 2		$	(3,152,424	)

 

 

Special Opportunities Fund
The fair value of derivative instruments as reported within the Schedule of Investments as of March 31, 2018:
Derivatives not accounted for as hedging instruments	Statement of Assets & Liabilities Location		Value
Equity Contracts - Warrants	Investments, at value		$	1,057,667
The effect of derivative instruments on the Statement of Operations for the period ended March 31, 2018:
	Amount of Realized Gain on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments	Statement of Operations Location		Value
Equity Contracts - Warrants	Net Realized Gain		$	30,770
	on Investments
	Change in Unrealized Appreciation on Derivatives Recognized in Income
Derivatives not accounted for as hedging instruments	Statement of Operations Location		Total
Equity Contracts - Warrants	Net change in unrealized		$	168,666
	appreciation of investments