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Note 2 - Investments | 3 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Investments and Other Noncurrent Assets [Text Block] | NOTE 2. INVESTMENTS As of September 30, 2025, the Company held investments carried at fair value on a recurring basis of $13.6 million and a cost basis of $16.3 million. The fair value of these investments is approximately 27.8 percent of the Company’s total assets at September 30, 2025. In addition, the Company held other investments of approximately $2.7 million, and held-to-maturity debt investments, net of allowance for credit losses, of $953,000. The cost basis of investments is adjusted for amortization of premium or accretion of discount on debt securities held and the recharacterization of distributions from investments in partnerships, if applicable. Concentrations of Credit Risk A significant portion of the Company’s investments carried at fair value on a recurring basis included investments in USGIF valued at $10.6 million as of September 30, 2025, and $10.5 million at June 30, 2025. 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 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 greater than one year 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. Contractual restrictions on the sale of an equity security are not considered in measuring the security's fair value. 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 third party. The third party may use 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. A binomial lattice model utilizes a number of assumptions in arriving at its results. The effects of changing any of the assumptions or factors utilized in a 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 tables summarize the major categories of investments with fair values adjusted on a recurring basis as of September 30, 2025, and June 30, 2025, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.
|  | September 30, 2025 |
|  |  |  |  |  | Significant |  |  | Significant |  |  |  |  |
|  | Quoted |  |  | Other |  |  | Unobservable |  |  |  |  |
|  | Prices |  |  | Inputs |  |  | Inputs |  |  |  |  |
(dollars in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
Investments carried at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in trading securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities - Domestic |  | $ | 60 |  |  | $ | - |  |  | $ | - |  |  | $ | 60 |
Equities - International |  |  | 847 |  |  |  | - |  |  |  | - |  |  |  | 847 |
Exchange Traded Funds - Crypto & digital asset |  |  | 992 |  |  |  | - |  |  |  | - |  |  |  | 992 |
Exchange Traded Funds - Global equity |  |  | 34 |  |  |  | - |  |  |  | - |  |  |  | 34 |
Exchange Traded Funds - Option strategy & income |  |  | 166 |  |  |  | - |  |  |  | - |  |  |  | 166 |
Mutual funds - Fixed income |  |  | 9,734 |  |  |  | - |  |  |  | - |  |  |  | 9,734 |
Mutual funds - Global equity |  |  | 890 |  |  |  | - |  |  |  | - |  |  |  | 890 |
Total equity securities |  |  | 12,723 |  |  |  | - |  |  |  | - |  |  |  | 12,723 |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  |  | 51 |  |  |  | - |  |  |  | - |  |  |  | 51 |
Total investments in trading securities: |  |  | 12,774 |  |  |  | - |  |  |  | - |  |  |  | 12,774 |
Investments in available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities - Convertible debentures |  |  | - |  |  |  | - |  |  |  | 842 |  |  |  | 842 |
Total investments carried at fair value on a recurring basis: |  | $ | 12,774 |  |  | $ | - |  |  | $ | 842 |  |  | $ | 13,616 |
Investments carried at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other investments (1) |  | $ | - |  |  | $ | - |  |  | $ | 1,828 |  |  | $ | 1,828 |
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 three months ended September 30, 2025. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.
|  | June 30, 2025 |
|  |  |  |  |  | Significant |  |  | Significant |  |  |  |  |
|  | Quoted |  |  | Other |  |  | Unobservable |  |  |  |  |
|  | Prices |  |  | Inputs |  |  | Inputs |  |  |  |  |
(dollars in thousands) |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Total |
Investments carried at fair value on a recurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investments in trading securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equities - Domestic |  | $ | 27 |  |  | $ | - |  |  | $ | - |  |  | $ | 27 |
Equities - International |  |  | 426 |  |  |  | - |  |  |  | - |  |  |  | 426 |
Exchange Traded Funds - Crypto & digital asset |  |  | 997 |  |  |  | - |  |  |  | - |  |  |  | 997 |
Exchange Traded Funds - Global equity |  |  | 32 |  |  |  | - |  |  |  | - |  |  |  | 32 |
Exchange Traded Funds - Option strategy & income |  |  | 111 |  |  |  | - |  |  |  | - |  |  |  | 111 |
Mutual funds - Fixed income |  |  | 9,692 |  |  |  | - |  |  |  | - |  |  |  | 9,692 |
Mutual funds - Global equity |  |  | 841 |  |  |  | - |  |  |  | - |  |  |  | 841 |
Total equity securities |  |  | 12,126 |  |  |  | - |  |  |  | - |  |  |  | 12,126 |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  |  | 62 |  |  |  | - |  |  |  | - |  |  |  | 62 |
Total investments in trading securities: |  |  | 12,188 |  |  |  | - |  |  |  | - |  |  |  | 12,188 |
Investments in available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities - Convertible debentures |  |  | - |  |  |  | - |  |  |  | 1,576 |  |  |  | 1,576 |
Total investments carried at fair value on a recurring basis: |  | $ | 12,188 |  |  | $ | - |  |  | $ | 1,576 |  |  | $ | 13,764 |
Investments carried at fair value on a nonrecurring basis: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other investments (1) |  | $ | - |  |  | $ | - |  |  | $ | 189 |  |  | $ | 189 |
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, 2025. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.
The Company holds 15,000 common shares of HIVE, a company headquartered in the United States with cryptocurrency mining facilities in Paraguay, Sweden, and Canada, at a cost of $41,000. The investment had a fair value of $60,000 and $27,000 as of September 30, 2025, and June 30, 2025, respectively, and was classified within Level 1 in the preceding tables. The common shares represent ownership in HIVE of less than 0.1 percent as of September 30, 2025. Frank Holmes serves on the board as executive chairman of HIVE and held shares, options, and restricted stock units at September 30, 2025. From August 2018 through January 2023, Mr. Holmes was Interim CEO of HIVE. The available-for-sale security carried at fair value on a recurring basis in the preceding tables is an investment in convertible debentures of HIVE. The Company purchased convertible securities for $15.0 million in January 2021. The convertible securities were 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. Under the original terms, the principal amount of each debenture was convertible into common shares in the capital of HIVE at a conversion rate of $2.34, and each whole warrant, which expired in January 2024, entitled the Company to acquire one common share at a price of $3.00 (Canadian). Under the current terms, which reflect a reverse stock split, the principal amount of each debenture is convertible into common shares in the capital of HIVE at a conversion rate of $11.70. The convertible securities did not represent ownership in HIVE at September 30, 2025, or June 30, 2025. The convertible securities are subject to Canadian securities regulations. The Company recorded the convertible debentures 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 net investment income (loss) ratably using the effective interest method until maturity, conversion, or other disposition. The fair value of the convertible debentures was $842,000 and $1.6 million at September 30, 2025, and June 30, 2025, respectively. The remaining principal amount was $842,000 as of September 30, 2025. The Company utilizes an independent third-party to estimate the fair value of the HIVE convertible debentures and the security is classified within Level 3 of the fair value hierarchy. During the three months ended September 30, 2025, the Company reassessed the valuation methodology for the convertible debentures previously measured using a binomial lattice model. Under the prior technique, fair value was determined using significant unobservable inputs, including volatility and credit spread assumptions. As of September 30, 2025, the security is less than four months from maturity. The independent third-party indicated that the convertible note’s outstanding principal balance approximates fair value, as the remaining term to maturity is short and the common stock price of HIVE as of September 30, 2025, is significantly below the convertible note's conversion price. As a result, there were no significant unobservable inputs used as of September 30, 2025. The change in valuation technique represents a change in estimate during the three months ended September 30, 2025. The following table is a reconciliation of investments recorded at fair value for which unobservable inputs (Level 3) were used in determining fair value. Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis
|  | Three Months Ended September 30, 2025 |
|  | Investments in |
(dollars in thousands) |  | debt securities |
Beginning Balance |  | $ | 1,576 |
Principal maturities |  |  | (750 | )
Amortization of day one premium |  |  | (11 | )
Accretion of bifurcation discount |  |  | 31 |
Total gains or losses included in: |  |  |  |
Net Investment Income (Loss) |  |  | 71 |
Other Comprehensive Income (Loss) |  |  | (75 | )
Ending Balance |  | $ | 842 |
The following is quantitative information with respect to the securities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) as of June 30, 2025.
|  | June 30, 2025 |
(dollars in thousands) |  | Fair Value |  | Principal Valuation Techniques |  | Unobservable Inputs |
Investments in available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities - convertible debentures |  | $ | 1,576 |  | Binomial lattice model |  | Volatility |  |  | 85.0 | %
|  |  |  |  |  |  | Credit Spread |  |  | 6.4 | %
|  |  |  |  |  |  | Risk-Free Rate |  |  | 2.6 | %
Investments in Trading Securities at Fair Value Investments in trading securities with readily determinable fair values are carried at fair value, and changes in unrealized gains or losses are reported within net investment income (loss). The following details the components of the Company’s trading securities carried at fair value as of September 30, 2025, and June 30, 2025.
|  | September 30, 2025 |
(dollars in thousands) |  | Cost |  |  | Unrealized Gains (Losses) |  |  | Fair Value |
Trading securities at fair value |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Equities - Domestic |  | $ | 87 |  |  | $ | (27 | ) |  | $ | 60 |
Equities - International |  |  | 761 |  |  |  | 86 |  |  |  | 847 |
Exchange Traded Funds - Crypto & digital asset |  |  | 899 |  |  |  | 93 |  |  |  | 992 |
Exchange Traded Funds - Global equity |  |  | 30 |  |  |  | 4 |  |  |  | 34 |
Exchange Traded Funds - Option strategy & income |  |  | 185 |  |  |  | (19 | ) |  |  | 166 |
Mutual funds - Fixed income |  |  | 9,869 |  |  |  | (135 | ) |  |  | 9,734 |
Mutual funds - Global equity |  |  | 929 |  |  |  | (39 | ) |  |  | 890 |
Total equity securities at fair value |  |  | 12,760 |  |  |  | (37 | ) |  |  | 12,723 |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  |  | 215 |  |  |  | (164 | ) |  |  | 51 |
Total trading securities at fair value |  | $ | 12,975 |  |  | $ | (201 | ) |  | $ | 12,774 |
|  | June 30, 2025 |
(dollars in thousands) |  | Cost |  |  | Unrealized Gains (Losses) |  |  | Fair Value |
Trading securities at fair value |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Equities - Domestic |  | $ | 87 |  |  | $ | (60 | ) |  | $ | 27 |
Equities - International |  |  | 761 |  |  |  | (335 | ) |  |  | 426 |
Exchange Traded Funds - Crypto & digital asset |  |  | 967 |  |  |  | 30 |  |  |  | 997 |
Exchange Traded Funds - Global equity |  |  | 30 |  |  |  | 2 |  |  |  | 32 |
Exchange Traded Funds - Option strategy & income |  |  | 105 |  |  |  | 6 |  |  |  | 111 |
Mutual funds - Fixed income |  |  | 9,869 |  |  |  | (177 | ) |  |  | 9,692 |
Mutual funds - Global equity |  |  | 929 |  |  |  | (88 | ) |  |  | 841 |
Total equity securities at fair value |  |  | 12,748 |  |  |  | (622 | ) |  |  | 12,126 |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  |  | 215 |  |  |  | (153 | ) |  |  | 62 |
Total trading securities at fair value |  | $ | 12,963 |  |  | $ | (775 | ) |  | $ | 12,188 |
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, net of allowance for credit losses, 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 in earnings, and the portion of unrealized loss the Company believes is not related to a credit loss is recognized in other comprehensive income (loss). 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 net 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 tables that follow. The Company held one financial instrument classified as available-for-sale containing an embedded derivative, which represents an investment in HIVE, at September 30, 2025, and June 30, 2025. The fair value of the embedded derivatives was zero at September 30, 2025, and June 30, 2025. As of September 30, 2025, the unrealized loss position in the available-for-sale security was related to changes in the fair value of the embedded derivatives and not the result of credit losses; therefore, an allowance for credit losses was not recorded. The following details the components of the Company’s available-for-sale debt investments as of September 30, 2025, and June 30, 2025.
|  | September 30, 2025 |
(dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains in Other Comprehensive Income (Loss) |  |  | Unrealized Losses in Other Comprehensive Income (Loss) |  |  | Unrealized Losses in Net Investment Income (Loss) (1) |  |  | Fair Value |  |  | Allowance for Credit Losses |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities - Convertible debentures |  | $ | 3,334 |  |  | $ | 50 |  |  | $ | - |  |  | $ | (2,542 | ) |  | $ | 842 |  |  | $ | - |
|  | June 30, 2025 |
(dollars in thousands) |  | Amortized Cost |  |  | Unrealized Gains in Other Comprehensive Income (Loss) |  |  | Unrealized Losses in Other Comprehensive Income (Loss) |  |  | Unrealized Losses in Net Investment Income (Loss) (1) |  |  | Fair Value |  |  | Allowance for Credit Losses |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities - Convertible debentures |  | $ | 3,993 |  |  | $ | 125 |  |  | $ | - |  |  | $ | (2,542 | ) |  | $ | 1,576 |  |  | $ | - |
1. | Represents changes in unrealized gains and losses related to embedded derivatives included within net investment income (loss) on the Consolidated Statements of Operations.
The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the three months ended September 30, 2025, and 2024.
|  | Three Months Ended |
|  | September 30, |
|  | 2025 |  |  | 2024 |
|  | Other Income (Loss) |  |  | Other Income (Loss) |
(dollars in thousands) |  | Net Investment Income (Loss) |  |  | Net Investment Income (Loss) |
Embedded Derivatives: |  |  |  |  |  |  |  |
Equity price risk exposure |  | $ | - |  |  | $ | (5 | )
At September 30, 2025, and June 30, 2025, the Company held one debt security classified as held-to-maturity. The following details are the components of the Company’s held-to-maturity debt investments as of September 30, 2025, and June 30, 2025.
|  | September 30, 2025 |
(dollars in thousands) |  | Amortized Cost |  |  | Allowance for Credit Losses |  |  | Net Carrying Amount |  |  | Gross Unrecognized Holding Gains |  |  | Gross Unrecognized Holding Losses |  |  | Fair Value |
Held-to-maturity debt securities(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  | $ | 1,000 |  |  | $ | (47 | ) |  | $ | 953 |  |  | $ | - |  |  | $ | - |  |  | $ | 953 |
|  | June 30, 2025 |
(dollars in thousands) |  | Amortized Cost |  |  | Allowance for Credit Losses |  |  | Net Carrying Amount |  |  | Gross Unrecognized Holding Gains |  |  | Gross Unrecognized Holding Losses |  |  | Fair Value |
Held-to-maturity debt securities(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt securities |  | $ | 1,000 |  |  | $ | (52 | ) |  | $ | 948 |  |  | $ | - |  |  | $ | - |  |  | $ | 948 |
1. | Held-to-maturity debt investments are carried at amortized cost, net of allowance for credit losses, and the fair value is classified as Level 2 according to the fair value hierarchy.
The Company applies the Current Expected Credit Losses (“CECL”) model to held-to-maturity debt securities. The allowance, which requires significant judgment, reflects lifetime expected credit losses and is deducted from amortized cost to present the net amount expected to be collected. Securities, or portions thereof, are charged against the allowance when deemed uncollectible, and the balance may change as economic conditions or issuer prospects evolve. The Company monitors the credit quality of debt securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying organization. As of September 30, 2025, and June 30, 2025, the held-to-maturity debt investment held by the Company did not have a credit rating. Since the held-to-maturity debt security does not have a credit rating, management has determined that the discounted cash flow method provides the best basis for its assessment and determination of expected credit losses. The Company has elected to reflect the change in the allowance solely attributable to the passage of time in interest income. Changes attributable to the passage of time are those solely due to changes in the present value of the expected cash flows as the instrument approaches maturity rather than expectations of cash flow timing or amounts. The change in allowance for credit losses attributable to the passage of time, included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations, was $5,000 for the three months ended September 30, 2025, and $23,000 for the three months ended September 30, 2024. The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment for the three months ended September 30, 2025, and 2025.
|  | Three Months Ended |
|  | September 30, |
(dollars in thousands) |  | 2025 |  |  | 2024 |
Beginning Balance |  | $ | 52 |  |  | $ | 132 |
Provision for credit losses - reversal (1) |  |  | (5 | ) |  |  | (23 | )
Ending Balance |  | $ | 47 |  |  | $ | 109 |
1. | Represents the change in present value attributable to the passage of time included in interest income.
The following summarizes the net carrying amount and estimated fair value of available-for-sale and held-to-maturity debt securities at September 30, 2025, by contractual maturity dates. Actual maturities may differ from final contractual maturities due to principal repayment installments or prepayment rights held by issuers.
|  | September 30, 2025 |
|  | Available-for-sale |  |  | Held-to-maturity |
|  | debt securities |  |  | debt securities |
|  | Convertible |  |  | Due after one year |
(dollars in thousands) |  | debentures (1) |  |  | through five years |
Amortized Cost |  | $ | 3,334 |  |  | $ | 1,000 |
Fair Value |  | $ | 842 |  |  | $ | 953 |
1. | Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.
As of September 30, 2025, none of the Company's investments in debt securities classified as held-to-maturity or available-for-sale were delinquent or in a non-accrual status, and accrued interest receivable of $35,000 and $40,000 is included in accounts and other receivables on the Consolidated Balance Sheets as of September 30, 2025, and June 30, 2025, respectively. 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 net investment income (loss). The carrying value of equity securities without readily determinable fair values was approximately $1.3 million as of June 30, 2025. The following table presents the carrying value of equity securities without readily determinable fair values held as of September 30, 2025, and 2024, 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.
|  | Three Months Ended |
|  | September 30, |
(dollars in thousands) |  | 2025 |  |  | 2024 |
Other Investments |  |  |  |  |  |  |  |
Carrying value |  | $ | 2,677 |  |  | $ | 1,687 |
Upward carrying value changes |  | $ | 1,328 |  |  | $ | - |
Downward carrying value changes/impairment |  | $ | - |  |  | $ | - |
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 $3.9 million since their respective acquisitions through September 30, 2025. 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 $5.4 million since their respective acquisitions through September 30, 2025. Net Investment Income (Loss) Net investment income (loss) 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;
| ● | impairments and observable price changes on equity investments without readily determinable fair values;
| ● | dividend and interest income; and
| ● | realized foreign currency gains and losses.
The following summarizes net investment income (loss) reflected in earnings for the periods presented.
|  | Three Months Ended |
(dollars in thousands) |  | September 30, |
Net Investment Income (Loss) |  | 2025 |  |  | 2024 |
Net realized gains (losses) on debt securities |  | $ | 71 |  |  | $ | 203 |
Net unrealized gains (losses) on equity securities |  |  | 1,913 |  |  |  | 33 |
Net unrealized gains (losses) on debt securities |  |  | (11 | ) |  |  | 40 |
Net unrealized gains (losses) on embedded derivatives |  |  | - |  |  |  | (5 | )
Net unrealized gains (losses) on cash equivalents |  |  | - |  |  |  | (1 | )
Dividend and interest income |  |  | 397 |  |  |  | 600 |
Net realized foreign currency gains (losses) |  |  | (93 | ) |  |  | 47 |
Total Net Investment Income (Loss) |  | $ | 2,277 |  |  | $ | 917 |
Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $71,000 for the three months ended September 30, 2025, and $203,000 for the three months ended September 30, 2024. The following table presents net unrealized gains (losses) recognized in net investment income (loss) during the three months ended September 30, 2025, and 2024, related to equity securities and debt securities classified as trading that were held as of the respective period-end dates.
|  | Three Months Ended |
|  | September 30, |
(dollars in thousands) |  | 2025 |  |  | 2024 |
Net unrealized gains (losses) for securities held at the reporting date: |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |
Net gains (losses) recognized during the period |  | $ | 1,913 |  |  | $ | 33 |
Less: Net gains (losses) recognized during the period on securities sold during the period |  |  | - |  |  |  | - |
Net unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date (1) |  | $ | 1,913 |  |  | $ | 33 |
Debt securities classified as trading: |  |  |  |  |  |  |  |
Net gains (losses) recognized during the period |  | $ | (11 | ) |  | $ | 40 |
Less: Net gains (losses) recognized during the period on securities sold during the period |  |  | - |  |  |  | - |
Net unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date |  | $ | (11 | ) |  | $ | 40 |
1. | Includes net unrealized gains of $1.3 million as a result of the measurement alternative for the three months ended September 30, 2025. There were no amounts included as a result of the measurement alternative for the three months ended September 30, 2024.
Net investment income (loss) can be volatile and vary depending on market fluctuations, the Company’s ability to participate in investment opportunities, and the timing of transactions. The Company expects that gains and losses will continue to fluctuate in the future.

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