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Equity-Accounted Investments And Other Long-Term Assets

6 Months Ended

Dec. 31, 2021

Equity-Accounted Investments And Other Long-Term Assets [Abstract]

Equity-Accounted Investments And Other Long-Term Assets

5.Equity-accounted investments and other long-term assets

Refer to Note 8 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2021, for additional information regarding its equity-accounted investments and other long-term assets.

Equity-accounted investments

The Company’s ownership percentage in its equity-accounted investments as of December 31, 2021, and June 30, 2021, was as follows:

														December 31,				June 30,
														2021				2021
	Finbond Group Limited (“Finbond”)														31.5	%		31.5	%
	Carbon Tech Limited (“Carbon”)														25.0	%		25.0	%
	SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”)														50.0	%		50.0	%

Finbond

As of December 31, 2021, the Company owned 268,820,933 shares in Finbond representing approximately 31.5% of its issued and outstanding ordinary shares. Finbond is listed on the Johannesburg Stock Exchange (“JSE”) and its closing price on December 31, 2021, the last trading day of the month, was ZAR 0.99 per share. The market value, using the December 31, 2021, closing price, of the Company’s holding in Finbond on December 31, 2021, was ZAR 266.1 million ($16.7 million translated at exchange rates applicable as of December 31, 2021).

Summarized below is the movement in equity-accounted investments and loans provided to equity-accounted investments during the six months ended December 31, 2021:

								Finbond			Other⁽¹⁾			Total
	Investment in equity
		Balance as of June 30, 2021						$	9,822		$	182		$	10,004
			Stock-based compensation						9			-			9
			Comprehensive loss:						(1,800)			-			(1,800)
				Other comprehensive loss					(644)			-			(644)
				Equity accounted loss					(1,156)			-			(1,156)
					Share of net loss				(1,156)			-			(1,156)
			Dividends received						-			(137)			(137)
			Foreign currency adjustment⁽²⁾						(852)			(7)			(859)
		Balance as of December 31, 2021						$	7,179		$	38		$	7,217

								Equity			Loans			Total
	Carrying amount as of :
			June 30, 2021					$	10,004		$	-		$	10,004
			December 31, 2021					$	7,217		$	-		$	7,217

(1) Includes Carbon and SmartSwitch Namibia.

(2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR, Nigerian naira and Namibian dollar against the U.S. dollar on the carrying value.

5.Equity-accounted investments and other long-term assets (continued)

Other long-term assets

Summarized below is the breakdown of other long-term assets as of December 31, 2021, and June 30, 2021:

													December 31,				June 30,
														2021			2021

	Total equity investments												$	76,297		$	76,297
			Investment in 15% of Cell C, at fair value (Note 4)											-			-
			Investment in 10% of MobiKwik (June 30, 2021: 12%)											76,297			76,297
			Investment in 87.5% of CPS⁽¹⁾											-			-
	Total held to maturity investments													-			-
			Investment in 7.625% of Cedar Cellular Investment 1 (RF) (Pty) Ltd 8.625% notes⁽²⁾											-			-
	Long-term portion of amount due related to sale of interest in Bank Frick⁽³⁾													-			3,890
	Policy holder assets under investment contracts (Note 7)													342			381
	Reinsurance assets under insurance contracts (Note 7)													1,182			1,298
			Total other long-term assets										$	77,821		$	81,866

(1) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that CPS be placed into liquidation.

(2) The note is included in accounts receivable, net and other receivables as of December 31, 2021 (refer to Note 2).

(3) Long-term portion of amount due related to sale of interest in Bank Frick as of June 30, 2021, represents the amount due from the purchaser in July 2022 and is included in accounts receivable, net, and other receivables as of December 31, 2021 (refer to Note 2).

MobiKwik

In October 2021, the Company converted its 310,781 shares of compulsorily convertible cumulative preferences shares to 6,215,620 equity shares in anticipation of MobiKwik’s initial public offering. The Company’s investment percentage remained unchanged following the conversion. The Company’s investment percentage as of December 31, 2021, was 10.2% following an issuance in December 2021, which the Company did not consider as an observable orderly transaction because it was made to an existing shareholder (i.e., a related party to MobiKwik), as well as the issuance of shares into an Employee Share Option Plan. There was no change in the fair value of MobiKwik during the three and six months ended December 31, 2021.

In early November 2020, MobiKwik entered into an agreement to raise additional capital through the issuance of additional shares to a new shareholder at a valuation of $135.54 per share. The Company used this valuation as the basis for its adjustment to increase the carrying value in its investment in MobiKwik in the unaudited condensed consolidated statement of operations by $15.1 million from $27.0 million to $42.1 million as of December 31, 2020.

The change in the fair value of MobiKwik during the three and six months ended December 31, 2020, of $15.1 million, respectively, is included in the caption “Change in fair value of equity securities” in the unaudited condensed consolidated statement of operations for the three and six months ended December 31, 2020.

Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of December 31, 2021:

											Cost basis			Unrealized holding			Unrealized holding			Carrying
											Cost basis			gains			losses			value
	Equity securities:
		Investment in MobiKwik								$	26,993		$	49,304		$	-		$	76,297
		Investment in CPS									-			-			-			-
	Held to maturity:
		Investment in Cedar Cellular notes (Note 2)									-			-			-			-
				Total						$	26,993		$	49,304		$	-		$	76,297

5.Equity-accounted investments and other long-term assets (continued)

Other long-term assets (continued)

Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of June 30, 2021:

											Cost basis			Unrealized holding			Unrealized holding			Carrying
											Cost basis			gains			losses			value
	Equity securities:
		Investment in MobiKwik								$	26,993		$	49,304		$	-		$	76,297
		Investment in CPS									-			-			-			-
	Held to maturity:
		Investment in Cedar Cellular notes									-			-			-			-
				Total						$	26,993		$	49,304		$	-		$	76,297