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Equity-Accounted Investments And Other Long-Term Assets | 6 Months Ended
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Dec. 31, 2024
Equity-Accounted Investments And Other Long-Term Assets [Abstract] |
Equity-Accounted Investments And Other Long-Term Assets | 6. Equity-accounted investments and other long-term assets Refer to Note 9 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2024, 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, 2024, and June 30, 2024, was as follows: December 31, June 30, 2024 2024 Sandulela Technology (Pty) Ltd ("Sandulela") 49.0 % 49.0 % SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”) 50.0 % 50.0 % Sale and impairment of Finbond shares during the three and six months ended December 31, 2023 On August 10, 2023, the Company, through its wholly owned subsidiary Net1 Finance Holdings (Pty) Ltd, entered into an agreement with Finbond to sell its remaining shareholding to Finbond for a cash consideration of ZAR 64.2 million ($ 3.5 million), or ZAR 0.2911 per share. The transaction was subject to certain conditions, including regulatory and shareholder approvals, which were finalized in December 2023. The cash proceeds received of ZAR 64.2 million ($ 3.5 million) were used to repay capitalized interest under the Company’s borrowing facilities. As noted above, the Company entered into an agreement to exit its position in Finbond and the Company considered this an impairment indicator. The Company is required to include any foreign currency translation reserve and other equity account amounts in its impairment assessment if it considers exiting an equity method investment. The Company performed an impairment assessment of its holding in Finbond, including the foreign currency translation reserve and other equity account amounts, as of September 30, 2023. The Company recorded an impairment loss of $ 1.2 million during the quarter ended September 30, 2023, which represented the difference between the determined fair value of the Company’s interest in Finbond and the Company’s carrying value, including the foreign currency translation reserve (before the impairment). The Company used the price of ZAR 0.2911 referenced in the August 2023 agreement referred to above to calculate the determined fair value for Finbond. 6. Equity-accounted investments and other long-term assets (continued) Equity-accounted investments (continued) Sale and impairment of Finbond shares during the three and six months ended December 31, 2023 (continued) The Company sold 7,379,656 shares in Finbond for cash during the three and six months ended December 31, 2023, respectively. The Company did no t record a gain or loss on the disposal because the sale proceeds were equivalent to the net carrying value, including accumulated reserves, of the investment in Finbond as of the disposal date. The following table presents the calculation of the disposal of Finbond shares during the three and six months ended December 31, 2023: 2023 Loss on disposal of Finbond shares: Consideration received in cash $ 3,508 Less: carrying value of Finbond shares sold (2,112) Less: release of foreign currency translation reserve from accumulated other comprehensive loss (1,543) Add: release of stock-based compensation charge related to equity-accounted investment 147 Loss on sale of Finbond shares $ - Carbon In September 2022, the Company, through its wholly-owned subsidiary, Net1 Applied Technologies Netherlands B.V. (“Net1 BV”), entered into a binding term sheet with the Etobicoke Limited (“Etobicoke”) to sell its entire interest, or 25 %, in Carbon to Etobicoke for $ 0.5 million and a loan due from Carbon, with a face value of $ 3.0 million, to Etobicoke for $ 0.75 million. Both the equity interest and the loan had a carrying value of $ 0 (zero) at June 30, 2022. The parties agreed that Etobicoke pledge the Carbon shares purchased as security for the amounts outstanding under the binding term sheet. The Company received $ 0.25 million on closing and the outstanding balance due by Etobicoke was expected to be paid as follows: (i) $ 0.25 million on September 30, 2023 (the amount was received in October 2023), and (ii) the remaining amount, of $ 0.75 million in March 2024 (the amount has not been received as of December 31, 2024 (refer to Note 3)). Summarized below is the movement in equity-accounted investments and loans provided to equity-accounted investments during the six months ended December 31, 2024: Total (1) Investment in equity Balance as of June 30, 2024 $ 206 Comprehensive income: 77 Other comprehensive income - Equity accounted (loss) earnings 77 Share of net (loss) earnings 77 Impairment - Dividends received (65) Equity-accounted investment acquired in business combination (Note 2) 477 Disposal of equity accounted investment (Note 2) (507) Foreign currency adjustment (2) (7) Balance as of December 31, 2024 $ 181 (1) Includes Sandulela, and SmartSwitch Namibia; (2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR and Namibian dollar, against the U.S. dollar on the carrying value. 6. 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, 2024, and June 30, 2024: December 31, June 30, 2024 2024 Total equity investments $ 42,566 $ 76,297 Investment in 5 % of Cell C (June 30, 2024: 5 %) at fair value (Note 5) - - Investment in 8 % of MobiKwik (June 30, 2024: 10 %) (1) 42,566 76,297 Investment in 87.5 % of CPS (June 30, 2024: 87.5 %) at fair value (1)(2) - - Policy holder assets under investment contracts (Note 8) 217 216 Reinsurance assets under insurance contracts (Note 8) 1,692 1,469 Other long-term assets 1,607 - Total other long-term assets $ 46,082 $ 77,982 (1) The Company determined that MobiKwik (up until December 2024) and CPS do not have readily determinable fair values and therefore elected to record these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. (2) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that CPS be placed into liquidation. Refer to Note 5 for additional information regarding the determination of the fair value of Company’s investment in MobiKwik as of December 31, 2024. The Company used this valuation as the basis for its adjustment to decrease the carrying value of its investment in MobiKwik by $ 33.7 million from $ 76.3 million to $ 42.6 million as of December 31, 2024. The change in the fair value of MobiKwik for the three and six months ended December 31, 2024, of $ 33.7 million, is included in the caption “Change in fair value of equity securities” in the consolidated statement of operations for the three and six months ended December 31, 2024. 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, 2024: Cost basis Unrealized holding Unrealized holding Carrying gains losses value Equity securities: Investment in CPS $ - $ - $ - $ - Held to maturity: Investment in Cedar Cellular notes (Note 3) - - - - 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, 2024: Cost basis Unrealized holding Unrealized holding Carrying 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

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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