Note 17 - Related Party Transactions

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 17. RELATED PARTY TRANSACTIONS

On June 30, 2022, and 2021, the Company had $12.8 million and $7.3 million, respectively, at fair value invested in USGIF funds the Company advised. These amounts were included in the Consolidated Balance Sheets as “investments in equity securities at fair value.” During the year ended June 30, 2022, the Company made an additional investment for $6.0 million. The Company recorded $146,000 and $15,000 in income from capital gain distributions and dividends from USGIF investments in fiscal years 2022 and 2021, respectively. There was no net realized gains or losses on its investments in the Funds in fiscal years 2022 or 2021.

The Company earned advisory and administrative services fees, as applicable, from the various funds for which it acts as investment adviser, as disclosed in Note 5. Receivables include amounts due from the funds for those fees and out-of-pocket expenses, net of amounts payable to the funds for expense reimbursements. As of June 30, 2022, and 2021, the Company had $1.6 million and $2.4 million, respectively, of receivables from funds included in the Consolidated Balance Sheets within “receivables.” As of June 30, 2022, the Company had $110,000 of payables to funds included in the Consolidated Balance Sheets within “other accrued expenses.”

The Company has had various investments in HIVE that were valued at approximately $11.1 million and $25.1 million and as of June 30, 2022, and 2021, respectively. As discussed in Note 4, in January 2021, the Company purchased convertible securities in HIVE, and an unrealized gain was recognized in other comprehensive income (loss) for the convertible debentures, which will be realized in investment income (loss) ratably using the effective interest method until maturity, conversion, or other disposition. During the fiscal year ended June 30, 2022, and 2021, $3.0 million and $1.4 million, respectively, in principal payments were received, and $2.2 million and $1.2 million, respectively, was included in investment income (loss) as realized gains on principal payment proceeds. On July 1, 2018, the Company reclassified $3.2 million of unrealized gains related to its investment in HIVE from Accumulated Other Comprehensive Income (Loss) into Retained Earnings. Therefore, when a HIVE investment was sold during the fiscal year ended  June 30, 2021, the amount included in realized gains on sales of fair valued securities was the proceeds of $20.6 million, less the cost of $2.4 million and the ASU 2016-01 reclassified unrealized gains of $3.2 million, or $15.0 million. The Company recorded $1.6 million and $368,000 in interest income from HIVE investments during the fiscal year ended June 30, 2022, and 2021, respectively. The Company earned other income from HIVE for consulting fees in the amount of $120,000 and $40,000 during the fiscal year ended June 30, 2022, and 2021, respectively. The Company had $140,000 and $40,000 of receivables from HIVE included in the Consolidated Balance Sheets within “receivables” as of June 30, 2022, and 2021, respectively. Frank Holmes, a director and Chief Executive Officer of the Company, is the executive chairman of HIVE, for which he received director fees from HIVE during fiscal years 2022 and 2021. Mr. Holmes held shares and options of HIVE at June 30, 2022, and 2021. Effective August 31, 2018, Mr. Holmes was named Interim CEO and Interim Executive Chairman of HIVE. Effective December 22, 2020, Mr. Holmes became the Executive Chairman of HIVE.

As discussed in Note 4, the Company held an investment in Thunderbird that was valued at approximately $2.7 million as of 2021. Realized gains on sales totaled $1.9 million and $936,000 during the fiscal years ended June 30, 2022, and 2001, respectively. Frank Holmes served on the board of this company as a director, for which he received fees, from June 2014 to March 2021.

As discussed in Note 4, the Company has an investment in Sonar that had a carrying value of approximately $362,000 and $100,000 at June 30, 2022, and 2021, respectively. During the year ended June 30, 2022, the Company purchased additional common shares for $75,000, resulting in an observable price change and upward adjustment for the existing common shares held of approximately $187,000, using the measurement alternative. The Company earned lease income from Sonar in the amount of $15,000 during the fiscal year ended June 30, 2022, and none in 2021. Roy D. Terracina, Director and Vice Chairman of the Board of Directors for U.S. Global, has served as the CEO of Sonar since July 2021.