Perritt Funds, Inc. | ||||||
Notes to the Schedule of Investments (Unaudited) | July 31, 2021 | |||||
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 July 31, 2021: |
Perritt MicroCap Opportunities Fund | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 1,971,397 | $ | - | $ | - | $ | 1,971,397 | ||||||||
Consumer Discretionary | 8,299,671 | - | - | 8,299,671 | ||||||||||||
Consumer Staples | 564,350 | - | - | 564,350 | ||||||||||||
Energy | 1,181,860 | - | - | 1,181,860 | ||||||||||||
Financials | 9,873,366 | - | - | 9,873,366 | ||||||||||||
Health Care | 3,256,340 | - | - | 3,256,340 | ||||||||||||
Industrials | 21,513,997 | - | - | 21,513,997 | ||||||||||||
Information Technology | 15,871,523 | - | - | 15,871,523 | ||||||||||||
Materials | 6,251,845 | - | - | 6,251,845 | ||||||||||||
Utilities | 773,000 | - | - | 773,000 | ||||||||||||
Total Common Stocks | 69,557,349 | - | - | 69,557,349 | ||||||||||||
Short Term Investments | 724,954 | - | - | 724,954 | ||||||||||||
Total Investments in Securities | $ | 70,282,303 | $ | - | $ | - | $ | 70,282,303 | ||||||||
Perritt Ultra MicroCap Fund | ||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Investments in Securities | ||||||||||||||||
Common Stocks | ||||||||||||||||
Communication Services | $ | 922,070 | $ | - | $ | - | $ | 922,070 | ||||||||
Consumer Discretionary | 1,349,500 | 266,000 | - | 1,615,500 | ||||||||||||
Consumer Staples | 501,040 | - | - | 501,040 | ||||||||||||
Energy | 379,611 | - | - | 379,611 | ||||||||||||
Financials | 1,283,400 | - | - | 1,283,400 | ||||||||||||
Health Care | 2,011,372 | - | - | 2,011,372 | ||||||||||||
Industrials | 4,265,277 | - | - | 4,265,277 | ||||||||||||
Information Technology | 6,083,944 | 204,000 | - | 6,287,944 | ||||||||||||
Materials | 1,315,698 | - | - | 1,315,698 | ||||||||||||
Real Estate Investment Trusts | 510,544 | - | - | 510,544 | ||||||||||||
Utilities | 352,400 | - | - | 352,400 | ||||||||||||
Total Common Stocks | 18,974,856 | 470,000 | - | 19,444,856 | ||||||||||||
Warrants | ||||||||||||||||
Health Care | - | 0 | - | 0 | ||||||||||||
Materials | 15,450 | - | - | 15,450 | ||||||||||||
Total Warrants | 15,450 | - | - | 15,450 | ||||||||||||
Short Term Investments | 325,425 | - | - | 325,425 | ||||||||||||
Total Investments in Securities | $ | 19,315,731 | $ | 470,000 | $ | - | $ | 19,785,731 | ||||||||
During the nine months ended July 31, 2021, the Microcap Fund and the Ultra Microcap Fund did not hold any Level 3 securities. |