The Company accounts for equity securities under ASC 321. Such securities are reported at fair value on the consolidated balance sheets, and the related unrealized gains and losses are reported in the consolidated statements of cash flows as non-cash adjustments to income or loss. Any unrealized appreciation or depreciation on investment securities is reported in the consolidated statements of operations as an unrealized gain or loss on marketable securities. In addition, unrealized gain or loss on marketable securities as reported in the consolidated statements of operations also includes the reversal of unrealized gains and losses at the time investment gains and losses are realized. During the years ended December 31, 2022 and 2021, realized loss on marketable securities was ($22,649,000) and ($16,962,000), respectively. Unrealized gain (loss) on marketable securities was $18,121,000 and ($22,949,000), respectively, for the years ended December 31, 2022 and 2021, respectively.

Details of marketable securities held at December 31, 2022 and 2021 are as follows (in thousands):

					Cumulative
					Unrealized
	Fair Value		Basis		(Loss) Gain
IronNet:	December 31, 2022
198,750 common shares - unrestricted	$	46	$	4,273	$	(4,227	)
		46		4,273		(4,227	)
Equity fund and other securities		16,539		17,024		(485	)
	$	16,585	$	21,297	$	(4,712	)

IronNet:	December 31, 2021
1,250,000 common shares - restricted	$	4,734	$	26,501	$	(21,767	)
88,620 common shares - unrestricted		372		2,195		(1,823	)
Put options		1,245		489		756
		6,351		29,185		(22,834	)
Equity fund and other securities		9,806		9,805		1
	$	16,157	$	38,990	$	(22,833	)

The IRNT common stock was received by the Company as a result of the previously discussed Sponsor distribution. The fair value of these shares determined at the date of distribution represents the basis of these securities.

As a result of the IronNet Business Combination and LGL’s investment in the Sponsor, LGL was distributed 2,065,000 IRNT private warrants and 1,572,529 shares of common stock on September 14, 2021. In an effort to continue its stakeholder responsibilities in the context of global corporate citizenship, the Company made a charitable gift on September 28, 2021 of 50,000 shares of IRNT common stock recognizing the fair value of $1,318,000 as an administrative expense at the date of donation. The fair value of the remaining 1,250,000 shares of IRNT restricted common stock outstanding was determined by applying a discount for lack of marketability to the publicly quoted market price of IRNT common stock. The 272,529 shares of PIPE-related common stock and 2,065,000 private warrants were subject to trading restrictions upon distribution until the registration statement became effective on September 30, 2021. A Monte Carlo simulation model was used to estimate the market price of IRNT private warrants.

On October 1, 2021, the Company exercised its 2,065,000 IRNT private warrants on a cashless basis and received 1,271,406 shares of IRNT common stock upon such exercise. The basis of the private warrants was carried over to the IRNT common shares received upon exercise of such warrants. As of December 31, 2021, the Company sold 1,455,315 shares of IRNT common stock and closed certain related derivative positions resulting in approximately $18,548,000 of pre-tax proceeds. At December 31, 2021, the Company held 88,620 shares of unrestricted IRNT common stock and 1,250,000 shares of IRNT that were restricted from sale until early 2022. The fair value of these shares of restricted common stock was determined by applying a discount for lack of marketability to the publicly quoted market price of IRNT common stock at December 31, 2021. During the first quarter of 2022, the sale restrictions were released. The fair value of our IRNT securities at December 31, 2022 was determined based on their publicly quoted market price. At December 31, 2022, the Company held 198,750 shares of unrestricted IRNT common stock.

The Company executed derivatives transactions as part of its plan to minimize the economic risk of IRNT share price volatility to its IRNT holdings. At December 31, 2021, the Company reported an unrealized gain of $756,000 related to put options for 300,000 shares of IRNT common stock with a May 2022 expiration date. During the first quarter of 2022, the Company delivered 50,000 shares against its IRNT put options. On May 5, 2022, the Company sold put options held at March 31, 2022 covering 250,000 shares of IRNT common stock for $1,263,000.