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Note 1 - Restatement of Previously Issued Consolidated Financial Statements

3 Months Ended

Sep. 30, 2022

Note 1 - RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited consolidated financial statements as of September 30, 2022, and for the three months then ended have been restated to reflect corrections of misstatements related to our corporate investments in HIVE Blockchain Technologies ("HIVE"). In addition to the changes listed below, various footnotes reflect the effects of this restatement, including but not limited to, Note 3, Investments, Note 9, Earnings Per Share, Note 11, Accumulated Other Comprehensive Income (Loss), and Note 12, Financial Information by Business Segment.

An error was detected in the fair value calculations performed by a third party for the investment in HIVE common share purchase warrants and the investment in HIVE unsecured convertible debentures. Specifically, related to the common share purchase warrants, the valuation model was not appropriately adjusted after a share consolidation by the issuer in May 2022. As a result, the fair value of the common share purchase warrants was corrected at September 30, 2022. The effect was as follows:

	Three Months Ended
	and as of
(dollars in thousands, except per share data)	September 30, 2022
(Overstatement)/Understatement
Deferred tax asset	$	449
Investments in equity securities at fair value, non-current	$	(2,140	)
Total Shareholders’ Equity	$	(1,691	)
Investment Loss	$	(13	)
Tax Expense	$	(2	)
Net Income	$	(11	)
Earnings Per Share	$	-

The error related to the investment in HIVE unsecured convertible debentures was related to an additional principal payment being included within the binomial lattice valuation model. As a result, the fair value of the HIVE unsecured convertible debentures was corrected at September 30, 2022. The effect was as follows:

	Three Months Ended
	and as of
(dollars in thousands)	September 30, 2022
(Overstatement)/Understatement
Deferred tax asset	$	173
Investments in available-for-sale debt securities at fair value	$	(820	)
Total Shareholders’ Equity	$	(647	)
Other Comprehensive Loss	$	5

The following tables set forth the impact of the restatement on the Company's consolidated financial statements as of and for the three months ended September 30, 2022.

CONSOLIDATED BALANCE SHEET (UNAUDITED)

	September 30, 2022
	As
	Previously			Restatement			As
(dollars in thousands)	Reported			Adjustments			Restated
Assets
Current Assets
Cash and cash equivalents	$	23,287		$	-		$	23,287
Restricted cash		1,000			-			1,000
Investments in securities at fair value, current		11,963			-			11,963
Accounts and other receivables		1,576			-			1,576
Tax receivable		96			-			96
Prepaid expenses		312			-			312
Total Current Assets		38,234			-			38,234

Net Property and Equipment		1,320			-			1,320

Other Assets
Deferred tax asset		751			622			1,373
Investments in equity securities at fair value, non-current		4,383			(2,140	)		2,243
Investments in available-for-sale debt securities at fair value		10,686			(820	)		9,866
Investments in held-to-maturity debt securities		1,000			-			1,000
Other investments		2,630			-			2,630
Financing lease, right of use assets		86			-			86
Other assets, non-current		233			-			233
Total Other Assets		19,769			(2,338	)		17,431
Total Assets	$	59,323		$	(2,338	)	$	56,985
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	14		$	-		$	14
Accrued compensation and related costs		1,925			-			1,925
Dividends payable		336			-			336
Financing lease liability, short-term		28			-			28
Other accrued expenses		1,137			-			1,137
Taxes payable		157			-			157
Total Current Liabilities		3,597			-			3,597

Long-Term Liabilities
Financing lease liability, long-term		59			-			59
Total Long-Term Liabilities		59			-			59
Total Liabilities		3,656			-			3,656

Commitments and Contingencies (Note 13)

Shareholders’ Equity
Common stock (class A) - $0.025 par value; nonvoting; 28,000,000 shares authorized, and 13,866,999 shares issued at September 30, 2022, and June 30, 2022; 12,852,968 and 12,888,950 shares outstanding at September 30, 2022, and June 30, 2022, respectively		347			-			347
Common stock (class B) - $0.025 par value; nonvoting; 4,500,000 shares authorized; no shares issued		-			-			-
Convertible common stock (class C) - $0.025 par value; voting; 3,500,000 shares authorized; 2,068,549 shares issued and outstanding at September 30, 2022, and June 30, 2022		52			-			52
Additional paid-in-capital		16,440			-			16,440
Treasury stock, class A shares at cost; 1,014,031 shares and 978,049 shares at September 30, 2022, and June 30, 2022, respectively		(2,722	)		-			(2,722	)
Accumulated comprehensive income, net of tax		3,785			(647	)		3,138
Retained earnings		37,765			(1,691	)		36,074
Total Shareholders’ Equity		55,667			(2,338	)		53,329
Total Liabilities and Shareholders’ Equity	$	59,323		$	(2,338	)	$	56,985

CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

(dollars in thousands, except per share data)	*Three Months Ended September 30, 2022*
	As
	*Previously*			*Restatement*			As
	*Reported*			*Adjustments*			*Restated*
Operating Revenues
Advisory fees	$	4,377		$	-		$	4,377
Administrative services fees		35			-			35
		4,412			-			4,412
Operating Expenses
Employee compensation and benefits		1,175			-			1,175
General and administrative		1,504			-			1,504
Advertising		86			-			86
Depreciation		61			-			61
Interest		1			-			1
		2,827			-			2,827
Operating Income		1,585			-			1,585
Other Income (Loss)
Investment loss		(1,447	)		(13	)		(1,460	)
Income from equity method investments		-			-			-
Other income		61			-			61
		(1,386	)		(13	)		(1,399	)
Income Before Income Taxes		199			(13	)		186
Provision for Income Taxes
Tax expense		81			(2	)		79
Net Income	$	118		$	(11	)	$	107

Basic Net Income per Share	$	0.01		$	-		$	0.01
Diluted Net Income per Share	$	0.01		$	-		$	0.01

Basic weighted average number of common shares outstanding		14,948,688						14,948,688
Diluted weighted average number of common shares outstanding		14,949,275						14,949,275

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended September 30, 2022
	As
	Previously			Restatement			As
(dollars in thousands)	Reported			Adjustments			Restated
Net Income	$	118		$	(11	)	$	107
Other Comprehensive Income (Loss), Net of Tax:
Unrealized losses on available-for-sale securities arising during period		(120	)		5			(115	)
Less: reclassification adjustment for gains included in net income		(371	)		-			(371	)
Net change from available-for-sale securities, net of tax		(491	)		5			(486	)
Foreign currency translation adjustment		-			-			-
Other Comprehensive Loss		(491	)		5			(486	)
Comprehensive Income (Loss)	$	(373	)	$	(6	)	$	(379	)

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (UNAUDITED)

																		Accumulated
	*Common*				*Common*													*Other*
	*Stock*		*Common*		*Stock*		*Common*		*Additional*			*Treasury*						*Comprehensive*
	*(class A)*		*Stock*		*(class C)*		*Stock*		*Paid-in*			*Stock*			*Treasury*			*Income*			*Retained*
	*Shares*		*(class A)*		*Shares*		*(class C)*		*Capital*			*Shares*			*Stock*			*(Loss)*			*Earnings*			*Total*
(dollars in thousands)
	*As Previously Reported:*
Balance at June 30, 2022		13,866,999	$	347		2,068,549	$	52	$	16,438			978,049		$	(2,599	)	$	4,276		$	37,982		$	56,496
Purchases of shares of Common Stock (class A)		-		-		-		-		-			39,965			(133	)		-			-			(133	)
Issuance of stock under ESPP of shares of Common Stock (class A)		-		-		-		-		3			(3,983	)		10			-			-			13
Share-based compensation, adjustment for forfeitures, net of tax		-		-		-		-		(1	)		-			-			-			-			(1	)
Dividends declared		-		-		-		-		-			-			-			-			(335	)		(335	)
Other comprehensive loss, net of tax		-		-		-		-		-			-			-			(491	)		-			(491	)
Net Income		-		-		-		-		-			-			-			-			118			118
Balance at September 30, 2022		13,866,999	$	347		2,068,549	$	52	$	16,440			1,014,031		$	(2,722	)	$	3,785		$	37,765		$	55,667

	*Restatement Adjustments:*
Other comprehensive loss, net of tax		-		-		-		-		-			-			-			5			-			5
Net income		-		-		-		-		-			-			-			-			(11	)		(11	)

	*As Restated:*
Balance at June 30, 2022 (As Previously Reported)		13,866,999	$	347		2,068,549	$	52	$	16,438			978,049		$	(2,599	)	$	4,276		$	37,982		$	56,496
Restatement adjustments		-		-		-		-		-			-			-			(652	)		(1,680	)		(2,332	)
Balance at June 30, 2022 (As Restated)		13,866,999	$	347		2,068,549	$	52	$	16,438			978,049		$	(2,599	)	$	3,624		$	36,302		$	54,164
Purchases of shares of Common Stock (class A)		-		-		-		-		-			39,965			(133	)		-			-			(133	)
Issuance of stock under ESPP of shares of Common Stock (class A)		-		-		-		-		3			(3,983	)		10			-			-			13
Share-based compensation, adjustment for forfeitures, net of tax		-		-		-		-		(1	)		-			-			-			-			(1	)
Dividends declared		-		-		-		-		-			-			-			-			(335	)		(335	)
Other comprehensive loss, net of tax		-		-		-		-		-			-			-			(486	)		-			(486	)
Net Income		-		-		-		-		-			-			-			-			107			107
Balance at September 30, 2022		13,866,999	$	347		2,068,549	$	52	$	16,440			1,014,031		$	(2,722	)	$	3,138		$	36,074		$	53,329

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

	Three Months Ended September 30, 2022
	As
	Previously			Restatement			As
(dollars in thousands)	Reported			Adjustments			Restated
Cash Flows from Operating Activities:
Net Income	$	118		$	(11	)	$	107
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion		(77	)		-			(77	)
Net recognized loss on disposal of fixed assets		3			-			3
Net realized gains on securities		(469	)		-			(469	)
Unrealized losses on securities		1,917			13			1,930
Net income from equity method investment		-			-			-
Provision for deferred taxes		(369	)		(2	)		(371	)
Stock-based compensation expense		-			-			-
Changes in operating assets and liabilities:
Accounts and other receivables		508			-			508
Prepaid expenses and other assets		78			-			78
Accounts payable and accrued expenses		(534	)		-			(534	)
Total adjustments		1,057			11			1,068
Net cash provided by operating activities		1,175			-			1,175
Cash Flows from Investing Activities:
Purchase of property and equipment		(14	)		-			(14	)
Purchase of other investments		(477	)		-			(477	)
Proceeds on sale of equity securities at fair value, non-current		-			-			-
Proceeds from principal paydowns of available-for-sale debt securities at fair value		750			-			750
Return of capital on other investments		2			-			2
Net cash provided by investing activities		261			-			261
Cash Flows from Financing Activities:
Principal payments on financing lease		(7	)		-			(7	)
Issuance of common stock		13			-			13
Repurchases of common stock		(133	)		-			(133	)
Dividends paid		(336	)		-			(336	)
Net cash used in financing activities		(463	)		-			(463	)
Net increase in cash, cash equivalents, and restricted cash		973			-			973
Beginning cash, cash equivalents, and restricted cash		23,314			-			23,314
Ending cash, cash equivalents, and restricted cash	$	24,287		$	-		$	24,287

Supplemental Disclosures of Non-Cash Investing and Financing Activities
Dividends declared but not paid	$	336		$	-		$	336
Unsettled sales of non-current investments	$	-		$	-		$	-
Unsettled class A common stock repurchases	$	10		$	-		$	10

Supplemental Disclosures of Cash Flow Information
Cash paid for income taxes	$	-		$	-		$	-