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INVESTMENTS | 6 Months Ended
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Dec. 31, 2021
Disclosure Text Block Supplement [Abstract] |
Investments and Other Noncurrent Assets [Text Block] | NOTE 2. INVESTMENTS As of December 31, 2021, the Company held investments carried at fair value on a recurring basis of $30.5 million and a cost basis of $22.2 million. The fair value of these investments is approximately 47.4 percent of the Company’s total assets at December 31, 2021. In addition, the Company held other investments of approximately $3.6 million, held-to-maturity debt investments of $1.0 million and investments of $489,000 accounted for under the equity method of accounting. The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held or the recharacterization of distributions from investments in partnerships. Fair Value Hierarchy Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques described below maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The inputs used for measuring financial instruments at fair value are summarized in the three broad levels listed below: Level 1 – Inputs represent unadjusted quoted prices for identical assets exchanged in active markets. Level 2 – Inputs include directly or indirectly observable inputs (other than Level 1 inputs) such as quoted prices for similar assets exchanged in active or inactive markets; quoted prices for identical assets exchanged in inactive markets; other inputs that may be considered in fair value determinations of the assets, such as interest rates and yield curves; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 – Inputs include unobservable inputs used in the measurement of assets. The Company is required to use its own assumptions regarding unobservable inputs because there is little, if any, market activity in the assets and it may be unable to corroborate the related observable inputs. Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with the investing in those securities. Because of the inherent uncertainties of valuation, the values reflected may materially differ from the values received upon actual sale of those investments. The Company has established a Proprietary Valuation Committee (the “Committee”) to administer and oversee the Company’s valuation policies and procedures, which are approved by the Board of Directors, and to perform a periodic review of valuations provided by independent pricing services. For actively traded securities, the Company values investments using the closing price of the securities on the exchange or market on which the securities principally trade. If the security is not traded on the last business day of the quarter, it is generally valued at the mean between the last bid and ask quotation. The fair value of a security that has a restriction is based on the quoted price for an otherwise identical unrestricted instrument that trades in a public market, adjusted for the estimated effect of the restriction. Mutual funds, which include open- and closed-end funds and exchange-traded funds, are valued at net asset value or closing price, as applicable. For common share purchase warrants not traded on an exchange, the estimated fair value is determined using the Black-Scholes option-pricing model. This sophisticated model utilizes a number of assumptions in arriving at its results, including the estimated life, the risk-free interest rate, and historical volatility of the underlying common stock. The Company may change the assumption of the risk-free interest rate and utilize the yield curve for instruments with similar characteristics, such as credit ratings and jurisdiction, or change the expected volatility. The effects of changing any of the assumptions or factors employed by the Black-Scholes model may result in a significantly different valuation. Certain convertible debt securities not traded on an exchange are valued by an independent pricing service using a binomial lattice model based on factors such as yield, quality, maturity, coupon rate, type of issuance, individual trading characteristics of the underlying common shares and other market data. The model utilizes a number of assumptions in arriving at its results. The effects of changing any of the assumptions or factors utilized in the binomial lattice model, including expected volatility, credit adjusted discount rates, and discounts for lack of marketability, may result in a significantly different valuation for the securities. For other securities included in the fair value hierarchy with unobservable inputs, the Committee considers a number of factors in determining a security’s fair value, including the security’s trading volume, market values of similar class issuances, investment personnel’s judgment regarding the market experience of the issuer, financial status of the issuer, the issuer’s management, and back testing, as appropriate. The fair values may differ from what may have been used had a broader market for these securities existed. The Committee reviews inputs and assumptions and reports material items to the Board of Directors. Securities which do not have readily determinable fair values are also periodically reviewed by the Committee. The following summarizes the major categories of investments with fair values adjusted on a recurring basis as of December 31, 2021, and June 30, 2021, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy. There were no fair values adjusted on a nonrecurring basis during the six months ended December 31, 2021.
|  | December 31, 2021 |
|  |  |  |  |  | Significant |  |  | Significant |  |  |  |  |
|  | Quoted Prices |  |  | Other Inputs |  |  | Unobservable Inputs |  |  |  |  |
(dollars in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
Investments carried at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities - International |  | $ | 993 |  |  | $ | - |  |  | $ | 7,316 |  |  | $ | 8,309 |
Mutual funds - Fixed income |  |  | 6,291 |  |  |  | - |  |  |  | - |  |  |  | 6,291 |
Mutual funds - Global equity |  |  | 881 |  |  |  | - |  |  |  | - |  |  |  | 881 |
Total investments in equity securities: |  | $ | 8,165 |  |  | $ | - |  |  | $ | 7,316 |  |  | $ | 15,481 |
Investments in debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale - Convertible debentures |  |  | - |  |  |  | - |  |  |  | 14,971 |  |  |  | 14,971 |
Total investments carried at fair value on a recurring basis: |  | $ | 8,165 |  |  | $ | - |  |  | $ | 22,287 |  |  | $ | 30,452 |
|  | June 30, 2021 |
|  |  |  |  |  | Significant |  |  | Significant |  |  |  |  |
|  | Quoted Prices |  |  | Other Inputs |  |  | Unobservable Inputs |  |  |  |  |
(dollars in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
Investments carried at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities - International |  | $ | 2,837 |  |  | $ | 135 |  |  | $ | 8,026 |  |  | $ | 10,998 |
Mutual funds - Fixed income |  |  | 6,322 |  |  |  | - |  |  |  | - |  |  |  | 6,322 |
Mutual funds - Global equity |  |  | 938 |  |  |  | - |  |  |  | - |  |  |  | 938 |
Total investments in equity securities: |  | $ | 10,097 |  |  | $ | 135 |  |  | $ | 8,026 |  |  | $ | 18,258 |
Investments in debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale - Convertible debentures |  |  | - |  |  |  | - |  |  |  | 17,049 |  |  |  | 17,049 |
Total investments carried at fair value on a recurring basis: |  | $ | 10,097 |  |  | $ | 135 |  |  | $ | 25,075 |  |  | $ | 35,307 |
Investments carried at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other investments1 |  | $ | - |  |  | $ | - |  |  | $ | 2,554 |  |  | $ | 2,554 |
| 1. | Other investments include equity securities without readily determinable fair values that were adjusted as a result of the measurement alternative on dates during the fiscal year ended June 30, 2021. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.
A significant portion of the securities recorded at fair value on a recurring basis in the above tables is in investments in HIVE Blockchain Technologies Ltd. (“HIVE”), which were warrants and convertible debentures valued at $22.3 million and classified as Level 3 at December 31, 2021, and valued at $25.1 million and classified as Level 3 at June 30, 2021. The following table is a reconciliation of investments recorded at fair value for which unobservable inputs (Level 3) were used in determining fair value during the six months ended December 31, 2021.
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis |
|  | Six Months Ended December 31, 2021 |
(dollars in thousands) |  | Investments in equity securities |  |  | Investments in debt securities |
Beginning Balance |  | $ | 8,026 |  |  | $ | 17,049 |
Principal repayments |  |  | - |  |  |  | (1,500 | )
Amortization of Premium |  |  | - |  |  |  | (177 | )
Accretion of Discount |  |  | - |  |  |  | 521 |
Total gains (losses) included in: |  |  |  |  |  |  |  |
Investment Income |  |  | (710 | ) |  |  | 612 |
Other Comprehensive Income (Loss) |  |  | - |  |  |  | (1,534 | )
Ending Balance |  | $ | 7,316 |  |  | $ | 14,971 |
During the third quarter of fiscal year 2021, the Company purchased convertible securities of HIVE, a company that is headquartered and traded in Canada with cryptocurrency mining facilities in Iceland, Sweden, and Canada, for $15.0 million. The convertible securities are comprised of 8.0% interest-bearing unsecured convertible debentures, payable in quarterly installments with a final maturity in January 2026, and 5 million common share purchase warrants in the capital of HIVE. The principal amount of each debenture is convertible into common shares in the capital of HIVE at a conversion rate of $2.34, and the remaining principal amount was $12.1 million as of December 31, 2021, and $14.3 million as of June 30, 2021. Each whole warrant, expiring in January 2024, entitles the Company to acquire one common share at a price of $3.00 (Canadian). Cryptocurrency markets and related securities have been, and are expected to continue to be, volatile. There has been significant volatility in the market price of HIVE, which has materially impacted the value of the investments included on the balance sheet, unrealized gain recognized in investment income (loss), and unrealized gain recognized in other comprehensive income (loss). The investments did not represent ownership in HIVE as of December 31, 2021, or June 30, 2021. The securities are subject to Canadian securities regulations. Frank Holmes serves on the board as non-executive chairman of HIVE and held shares and options at December 31, 2021. Effective August 31, 2018, Mr. Holmes was named Interim Executive Chairman of HIVE. The Company recorded the warrants at the estimated fair value of $5.9 million on purchase date. The debentures were recorded at the estimated fair value of $16.0 million on purchase date, and an unrealized gain of $6.9 million was recognized in other comprehensive income (loss), which will be realized in investment income (loss) ratably using the effective interest method until maturity, conversion, or other disposition. During the three and six months ended December 31, 2021, $569,000 and $1.2 million was realized in investment income (loss), and $4.5 million remains in accumulated other comprehensive income at December 31, 2021. The fair value of the warrants and debentures was $7.3 million and $15.0 million, respectively, at December 31, 2021, and $8.0 million and $17.0 million, respectively, at June 30, 2021. The Company currently considers the related fair value measurements to contain Level 3 inputs. The following is quantitative information as of December 31, 2021, with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3):
|  | December 31, 2021 |
(dollars in thousands) |  | Fair Value |  | Principal Valuation Techniques |  | Unobservable Inputs |  |  |  |
Investments in equity securities: |  |  |  |  |  |  |  |  |  |  |
Common share purchase warrants |  | $ | 7,316 |  | Option pricing model |  |  |  |  |  |
|  |  |  |  |  |  | Volatility |  |  | 97.2 | %
Investments in debt securities: |  |  |  |  |  |  |  |  |  |  |
Available-for-sale - Convertible debentures |  | $ | 14,971 |  | Binomial lattice model |  |  |  |  |  |
|  |  |  |  |  |  | Volatility |  |  | 64.0 | %
|  |  |  |  |  |  | Credit Adjusted Discount Rate |  |  | 2.2 | %
The Company had an investment in Thunderbird Entertainment Group Inc. (“Thunderbird”), a company headquartered and traded in Canada, which was valued at approximately $2.7 million at June 30, 2021, and classified as Level 1 in the fair value hierarchy. During the three and six months ended December 31, 2021, the Company realized gains on sales of this investment in the amount of $43,000 and $1.9 million, respectively. The Company did not have ownership of Thunderbird as of December 31, 2021. Frank Holmes served on the board of this company as a director from June 2014 to March 2021. Equity Investments at Fair Value Investments in equity securities with readily determinable fair values are carried at fair value, and changes in unrealized gains or losses are reported in current period earnings. The following details the components of the Company’s equity investments carried at fair value as of December 31, 2021, and June 30, 2021.
|  | December 31, 2021 |
(dollars in thousands) |  | Cost |  |  | Unrealized Gains (Losses) |  |  | Fair Value |
Equity securities at fair value |  |  |  |  |  |  |  |  |  |  |  |
Equities - International |  | $ | 6,201 |  |  | $ | 2,108 |  |  | $ | 8,309 |
Equities - Domestic |  |  | 45 |  |  |  | (45 | ) |  |  | - |
Mutual funds - Fixed income |  |  | 6,313 |  |  |  | (22 | ) |  |  | 6,291 |
Mutual funds - Global equity |  |  | 929 |  |  |  | (48 | ) |  |  | 881 |
Total equity securities at fair value |  | $ | 13,488 |  |  | $ | 1,993 |  |  | $ | 15,481 |
|  | June 30, 2021 |
(dollars in thousands) |  | Cost |  |  | Unrealized Gains (Losses) |  |  | Fair Value |
Equity securities at fair value |  |  |  |  |  |  |  |  |  |  |  |
Equities - International |  | $ | 7,076 |  |  | $ | 3,922 |  |  | $ | 10,998 |
Equities - Domestic |  |  | 45 |  |  |  | (45 | ) |  |  | - |
Mutual funds - Fixed income |  |  | 6,313 |  |  |  | 9 |  |  |  | 6,322 |
Mutual funds - Global equity |  |  | 929 |  |  |  | 9 |  |  |  | 938 |
Total equity securities at fair value |  | $ | 14,363 |  |  | $ | 3,895 |  |  | $ | 18,258 |
Included in the above table was $7.2 million and $7.3 million as of December 31, 2021, and June 30, 2021, respectively, at fair value invested in USGIF. Debt Investments Investments in debt securities are classified on the acquisition dates and at each balance sheet date. Securities classified as held-to-maturity are carried at amortized cost, reflecting the ability and intent to hold the securities to maturity. Debt securities classified as trading are acquired with the intent to sell in the near term and are carried at fair value with changes reported in earnings. All other debt securities are classified as available-for-sale and are carried at fair value. Investment gains and losses on available-for-sale debt securities are recorded when the securities are sold, as determined on a specific identification basis, and recognized in current period earnings. Changes in unrealized gains on available-for-sale debt securities are reported net of tax in accumulated other comprehensive income (loss). For debt securities in an unrealized loss position, a loss in earnings is recognized for the excess of amortized cost over fair value if the Company intends to sell before the price recovers. Otherwise, the Company evaluates as of the balance sheet date whether the unrealized losses are attributable to credit losses or other factors. The severity of the decline in value, creditworthiness of the issuer and other relevant factors are considered. The portion of unrealized loss the Company believes is related to a credit loss is recognized earnings, and the portion of unrealized loss the Company believes is not related to a credit loss is recognized in other comprehensive income. The following details the components of the Company’s available-for-sale debt investments as of December 31, 2021, and June 30, 2021.
|  | December 31, 2021 |
(dollars in thousands) |  | Amortized Cost |  |  | Gross Unrealized Gains in Other Comprehensive Income |  |  | Gross Unrealized Losses in Earnings |  |  | Fair Value |
Available-for-sale - Convertible debentures1 |  | $ | 8,755 |  |  | $ | 6,775 |  |  | $ | (559 | ) |  | $ | 14,971 |
|  | June 30, 2021 |
(dollars in thousands) |  | Amortized Cost |  |  | Gross Unrealized Gains in Other Comprehensive Income |  |  | Gross Unrealized Losses in Earnings |  |  | Fair Value |
Available-for-sale - Convertible debentures1 |  | $ | 8,741 |  |  | $ | 8,308 |  |  | $ | - |  |  | $ | 17,049 |
| 1. | Changes in unrealized gains and losses are included in the statement of comprehensive income (loss), except for embedded derivatives. Changes in unrealized and realized gains and losses for embedded derivatives are included in earnings in the statement of operations.
The following details the components of the Company’s held-to-maturity debt investments as of December 31, 2021, and June 30, 2021.
|  | December 31, 2021 |
(dollars in thousands) |  | Amortized Cost |  |  | Gross Unrecognized Holding Gains |  |  | Gross Unrecognized Holding Losses |  |  | Fair Value |
Held-to-maturity - Debentures1 |  | $ | 1,000 |  |  | $ | - |  |  | $ | (22 | ) |  | $ | 978 |
|  | June 30, 2021 |
(dollars in thousands) |  | Amortized Cost |  |  | Gross Unrecognized Holding Gains |  |  | Gross Unrecognized Holding Losses |  |  | Fair Value |
Held-to-maturity - Debentures1 |  | $ | 1,000 |  |  | $ | 3 |  |  | $ | - |  |  | $ | 1,003 |
| 1. | Held-to-maturity debt investments are carried at amortized cost.
Investments in debt securities classified as held-to-maturity are carried at amortized cost. The following summarizes the net carrying amount and estimated fair value of debt securities at December 31, 2021, by contractual maturity dates. Actual maturities may differ from final contractual maturities due to principal repayment installments or prepayment rights held by issuers.
|  | December 31, 2021 |
|  | Available-for-sale debt securities |  |  | Held-to-maturity debt securities |
(dollars in thousands) |  | Convertible debentures (1) |  |  | Due after one year through five years |
Net Carrying Amount |  | $ | 8,755 |  |  | $ | 1,000 |
Fair Value |  | $ | 14,971 |  |  | $ | 978 |
| 1. | Principal payments are due quarterly with a final maturity date in January 2026.
Certain derivatives embedded in other financial instruments, such as the conversion option in a convertible bond, are reported at fair value, and changes in fair value are recorded through earnings within investment income (loss). The host contract continues to be accounted for in accordance with the appropriate accounting standard. The embedded derivative and the related host contract represent one legal contract and are combined on the Consolidated Balance Sheets and the preceding tables. The Company held one financial instrument containing an embedded derivative, which represents an investment in HIVE, at December 31, 2021, and June 30, 2021. The following table summarizes the fair values of embedded derivatives on the Consolidated Balance Sheet, categorized by risk exposure, at December 31, 2021, and June 30, 2021.
|  | December 31, 2021 |  |  | June 30, 2021 |
|  | Other Assets |  |  | Other Assets |
(dollars in thousands) |  | Investments in available-for-sale debt securities |  |  | Investments in available-for-sale debt securities |
Embedded Derivatives: |  |  |  |  |  |  |  |
Equity price risk exposure |  | $ | 1,983 |  |  | $ | 2,542 |
The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the three and six months ended December 31, 2021, and 2020.
|  | Six Months Ended December 31, 2021 |  |  | Six Months Ended December 31, 2020 |  |  | Three Months Ended December 31, 2021 |  |  | Three Months Ended December 31, 2020 |
|  | Other Income (Loss) |  |  | Other Income (Loss) |  |  | Other Income (Loss) |  |  | Other Income (Loss) |
(dollars in thousands) |  | Investment income (loss) |  |  | Investment income (loss) |  |  | Investment income (loss) |  |  | Investment income (loss) |
Embedded Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity price risk exposure |  | $ | (559 | ) |  | $ | - |  |  | $ | (121 | ) |  | $ | - |
Other Investments Other investments consist of equity investments in entities over which the Company is unable to exercise significant influence and which do not have readily determinable fair values. For these securities, the Company generally elects to value using the measurement alternative, under which such securities are measured at cost, less impairment, if any. If the Company identifies observable price changes for identical or similar securities of the same issuer, the equity security is measured at fair value as of the date the observable transaction occurred, with such changes recorded in investment income (loss). The following table presents the carrying value of equity securities without readily determinable fair values held as of December 31, 2021, and 2020, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes or impairments. These securities are included in the nonrecurring fair value hierarchy tables when applicable price changes are observable, or when impairments occur.
|  | Six Months Ended |  |  | Three Months Ended |
|  | December 31, |  |  | December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Other Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Carrying value |  | $ | 3,551 |  |  | $ | 1,385 |  |  | $ | 3,551 |  |  | $ | 1,385 |
Upward carrying value changes |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Downward carrying value changes/impairment |  |  | - |  |  |  | (123 | ) |  |  | - |  |  |  | (6 | )
The carrying value of equity securities without readily determinable fair values was approximately $3.5 million as of June 30, 2021. The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes. The cumulative amount of upward adjustments to all equity securities without readily determinable fair values total $2.3 million since their respective acquisitions through December 31, 2021. The cumulative amount of impairments and other downward adjustments, which include return of capital distributions and observable price changes, to all equity securities without readily determinable fair values total $1.5 million since their respective acquisitions through December 31, 2021. Investments Classified as Equity Method During fiscal years 2021 and 2022, the Company had an equity method investment in Galileo New Economy Fund LP. The Company owns approximately 22 percent of the LP as of December 31, 2021, and the Company is considered to have the ability to exercise significant influence. Thus, the investment is accounted for under the equity method of accounting. Included in other income (loss) for the three and six months ended December 31, 2021, is ($48,000) and ($33,000), respectively, for this investment. Included in other income (loss) for the three and six months ended December 31, 2020, is $463,000 and $484,000 respectively, for this investment. The Company’s investment in the LP had a carrying value of approximately $489,000 and $532,000 at December 31, 2021, and June 30, 2021, respectively. The LP is in the process of dissolution, and the carrying value at December 31, 2021, reflects the distribution the Company expects to receive, which includes cash and common shares of an investment held in the LP. Frank Holmes also directly held an investment in the LP at December 31, 2021. This investment has a concentration in technology and blockchain companies, which may result in volatility in its valuation. Investment Income Investment income from the Company’s investments includes:
| ● | realized gains and losses on sales of securities;
| ● | realized gains and losses on principal payment proceeds;
| ● | unrealized gains and losses on securities at fair value;
| ● | realized foreign currency gains and losses;
| ● | impairments and observable price changes on equity investments without readily determinable fair values; and
| ● | dividend and interest income.
The following summarizes investment income reflected in earnings for the periods presented.
|  | Six Months Ended |  |  | Three Months Ended |
(dollars in thousands) |  | December 31, |  |  | December 31, |
Investment Income |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Unrealized gains (losses) on fair valued securities |  | $ | (1,903 | ) |  | $ | 6,573 |  |  | $ | 455 |  |  | $ | 5,466 |
Unrealized losses on embedded derivatives |  |  | (559 | ) |  |  | - |  |  |  | (121 | ) |  |  | - |
Unrealized losses on equity securities without readily determinable fair values |  |  | - |  |  |  | (113 | ) |  |  | - |  |  |  | - |
Realized gains on principal payment proceeds |  |  | 1,170 |  |  |  | - |  |  |  | 569 |  |  |  | - |
Realized gains on sales of fair valued securities |  |  | 1,853 |  |  |  | 15,043 |  |  |  | 43 |  |  |  | 15,043 |
Realized foreign currency gains (losses) |  |  | (120 | ) |  |  | 176 |  |  |  | 26 |  |  |  | 175 |
Dividend and interest income |  |  | 1,104 |  |  |  | 21 |  |  |  | 607 |  |  |  | 18 |
Total Investment Income |  | $ | 1,545 |  |  | $ | 21,700 |  |  | $ | 1,579 |  |  | $ | 20,702 |
For the three and six months ended December 31, 2021, realized gains on principal payment proceeds in the amount of $569,000 and $1.2 million, respectively, was released from other comprehensive income (loss). Unrealized gains and losses recognized on equity investments held as of the end of each three and six months ended December 31, 2021, and 2020 are as follows:
|  | Six Months Ended |  |  | Three Months Ended |
|  | December 31, |  |  | December 31, |
(dollars in thousands) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Net gains (losses) recognized during the period on equity securities |  | $ | (50 | ) |  | $ | 21,503 |  |  | $ | 498 |  |  | $ | 20,509 |
Less: Net gains (losses) recognized during the period on equity securities sold during the period |  |  | (183 | ) |  |  | (18,284 | ) |  |  | 1 |  |  |  | (18,013 | )
Net unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date1 |  | $ | (233 | ) |  | $ | 3,219 |  |  | $ | 499 |  |  | $ | 2,496 |
| 1. | Included $(113,000) for the six months ended December 31, 2020, of net gains (losses) as a result of the measurement alternative. There were no net gains (losses) as a result of the measurement alternative for the six months ended December 31, 2021, or for the three months ended December 31, 2021, and 2020.
Investment income (loss) can be volatile and varies depending on market fluctuations, the Company’s ability to participate in investment opportunities, and timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.

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