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Note 3 - Investments

6 Months Ended

Dec. 31, 2023

Investments and Other Noncurrent Assets [Text Block]

NOTE 3. INVESTMENTS

As of December 31, 2023, the Company held investments carried at fair value on a recurring basis of $17.3 million and a cost basis of $25.1 million. The fair value of these investments is approximately 32.3 percent of the Company’s total assets at December 31, 2023. In addition, the Company held other investments of approximately $1.6 million and held-to-maturity debt investments, net of allowance for credit losses, of $823,000.

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.

Concentrations of Credit Risk

A significant portion of the Company’s investments carried at fair value on a recurring basis is investments in USGIF, which were $10.9 million and $12.4 million as of December 31, 2023, and June 30, 2023, respectively, and investments in HIVE Digital Technologies Ltd. (“HIVE”), which were warrants and convertible debentures valued at $5.8 million at December 31, 2023, and $7.3 million at June 30, 2023. For these investments, the maximum amount of loss due to credit risk the Company could incur is the fair value of the financial instruments.

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 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 third party 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 tables summarize the major categories of investments with fair values adjusted on a recurring basis as of December 31, 2023, and June 30, 2023, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.

	*December 31, 2023*
			*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 - International	$	443	$	-	$	2	$	445
Mutual funds - Fixed income		10,092		-		-		10,092
Mutual funds - Global equity		760		-		-		760
Total equity securities		11,295		-		2		11,297
Debt securities:
Corporate debt securities		260		-		-		260
Total investments in trading securities:		11,555		-		2		11,557
Investments in available-for-sale debt securities:
Corporate debt securities - Convertible debentures		-		-		5,784		5,784
Total investments carried at fair value on a recurring basis:	$	11,555	$	-	$	5,786	$	17,341
Investments carried at fair value on a nonrecurring basis:
Other investments ⁽¹⁾	$	-	$	-	$	435	$	435

^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 six months ended December 31, 2023. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

	*June 30, 2023*
			*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 - International	$	488	$	-	$	290	$	778
Mutual funds - Fixed income		11,642		-		-		11,642
Mutual funds - Global equity		785		-		-		785
Total equity securities		12,915		-		290		13,205
Debt securities:
Corporate debt securities		-		-		-		-
Total investments in trading securities:		12,915		-		290		13,205
Investments in available-for-sale debt securities:
Corporate debt securities - Convertible debentures		-		-		7,008		7,008
Total investments carried at fair value on a recurring basis:	$	12,915	$	-	$	7,298	$	20,213
Investments carried at fair value on a nonrecurring basis:
Other investments ⁽¹⁾	$	-	$	-	$	1,786	$	1,786

^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, 2023. These securities are classified as level 3 due to the infrequency of the observable price changes and/or restrictions on the shares.

The securities classified as Level 3 and carried at fair value on a recurring basis in the preceding tables are investments in convertible securities of HIVE, a company that is headquartered in Canada with cryptocurrency mining facilities in Iceland, Sweden, and Canada. The Company purchased the convertible securities for $15.0 million in January 2021. 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. 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, expiring 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, and each five whole warrants entitles the Company to acquire one common share at a price of $15.00 (Canadian). The remaining principal amount was $6.1 million as of December 31, 2023. 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 Consolidated Balance Sheets, unrealized gain (loss) recognized in net investment income (loss), and unrealized gain (loss) recognized in other comprehensive income (loss). The investments did not represent ownership in HIVE as of December 31, 2023, or June 30, 2023. The securities are subject to Canadian securities regulations. Frank Holmes serves on the board as executive chairman of HIVE and held shares and options at December 31, 2023. From August 2018 through January 2023, Mr. Holmes was Interim CEO of HIVE.

The Company recorded the warrants at the estimated fair value of $5.9 million on the 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 net investment income (loss) ratably using the effective interest method until maturity, conversion, or other disposition. The fair value of the warrants and debentures was $2,000 and $5.8 million, respectively, at December 31, 2023, and $290,000 and $7.0 million, respectively, at June 30, 2023.

The Company utilizes an independent third-party to estimate the fair values of the HIVE convertible securities and currently considers the fair value measurements to contain Level 3 inputs. 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, 2023.

Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis

	*Six Months Ended December 31, 2023*
	*Investments in*			*Investments in*
(dollars in thousands)	*equity securities*			*debt securities*
Beginning Balance	$	290		$	7,008
Principal repayments		-			(1,500	)
Amortization of day one premium		-			(96	)
Accretion of bifurcation discount		-			284
Total gains or losses included in:
Net Investment Income (Loss)		(288	)		576
Other Comprehensive Income (Loss)		-			(488	)
Ending Balance	$	2		$	5,784

The following is quantitative information as of December 31, 2023, 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, 2023*
(dollars in thousands)	*Fair Value*		*Principal Valuation Techniques*	*Unobservable Inputs*
Investments in equity securities:
Common share purchase warrants	$	2	Option pricing model	Volatility	185.0	%
				Risk-Free Rate	4.66	%
Investments in available-for-sale debt securities:
Corporate debt securities - Convertible debentures	$	5,784	Binomial lattice model	Volatility	100.0	%
				Credit Spread	9.90	%
				Risk-Free Rate	3.78	%

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 in the current period's earnings. The following details the components of the Company’s trading securities carried at fair value as of December 31, 2023, and June 30, 2023.

	December 31, 2023
(dollars in thousands)	Cost		Unrealized Gains (Losses)			Fair Value
Trading securities at fair value
Equity securities:
Equities - International	$	6,595	$	(6,150	)	$	445
Equities - Domestic		45		(45	)		-
Mutual funds - Fixed income		10,280		(188	)		10,092
Mutual funds - Global equity		929		(169	)		760
Total equity securities		17,849		(6,552	)		11,297
Debt securities:
Corporate debt securities		215		45			260
Total trading securities at fair value	$	18,064	$	(6,507	)	$	11,557

	*June 30, 2023*
(dollars in thousands)	*Cost*		*Unrealized Gains (Losses)*			*Fair Value*
Trading securities at fair value
Equity securities:
Equities - International	$	6,679	$	(5,901	)	$	778
Equities - Domestic		45		(45	)		-
Mutual funds - Fixed income		11,947		(305	)		11,642
Mutual funds - Global equity		930		(145	)		785
Total equity securities		19,601		(6,396	)		13,205
Debt securities:
Corporate debt securities		-		-			-
Total trading securities at fair value	$	19,601	$	(6,396	)	$	13,205

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 below. The Company held one financial instrument classified as available-for-sale containing an embedded derivative, which represents an investment in HIVE, at December 31, 2023, and June 30, 2023. As of December 31, 2023, 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 December 31, 2023, and June 30, 2023.

	*December 31, 2023*
(dollars in thousands)	*Amortized Cost*		*Gross Unrealized Gains in Other Comprehensive Income (Loss)*		*Gross Unrealized Losses in Other Comprehensive Income (Loss)*		Gross Unrealized Losses in Net Investment Income (Loss) ⁽¹⁾			*Fair Value*		*Allowance for Credit Losses*
Available-for-sale debt securities:
Corporate debt securities - Convertible debentures	$	7,056	$	1,219	$	-	$	(2,491	)	$	5,784	$	-

	*June 30, 2023*
(dollars in thousands)	*Amortized Cost*		*Gross Unrealized Gains in Other Comprehensive Income (Loss)*		*Gross Unrealized Losses in Other Comprehensive Income (Loss)*		Gross Unrealized Losses in Net Investment Income (Loss)⁽¹⁾			*Fair Value*		*Allowance for Credit Losses*
Available-for-sale debt securities:
Corporate debt securities - Convertible debentures	$	7,729	$	1,707	$	-	$	(2,428	)	$	7,008	$	-

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 summarizes the fair values of embedded derivatives on the Consolidated Balance Sheets, categorized by risk exposure, at December 31, 2023, and June 30, 2023.

	*December 31, 2023*		*June 30, 2023*
	*Other Assets*		*Other Assets*
	*Investments in*		*Investments in*
	*available-for-sale*		*available-for-sale*
(dollars in thousands)	*debt securities*		*debt securities*
Embedded Derivatives:
Equity price risk exposure	$	51	$	114

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, 2023, and 2022.

Six Months Ended

Three Months Ended

December 31,

2023

2022

2023

2022

Other Income (Loss)

(dollars in thousands)

Net Investment Income (Loss)

Embedded Derivatives:

Equity price risk exposure

(63

)

At December 31, 2023, and June 30, 2023, the Company held one debt security classified as held-to-maturity. The security had an estimated fair value that was lower than the carrying value by $177,000 at December 31, 2023, and $232,000 at June 30, 2023. The security has been in a continuous unrealized loss position for over twelve months. We have evaluated the unrealized loss on the security at December 31, 2023, and determined it to be of a temporary nature and caused by fluctuations in market interest rates, not by concerns regarding the ability of the issuer to meet their obligations.

The following details the components of the Company’s held-to-maturity debt investments as of December 31, 2023, and June 30, 2023.

	*December 31, 2023*
(dollars in thousands)	*Amortized Cost*		*Gross Unrecognized Holding Gains*		*Gross Unrecognized Holding Losses*			*Fair Value*		*Allowance for Credit Losses*
Held-to-maturity debt securities⁽¹⁾:
Corporate debt securities	$	1,000	$	-	$	(177	)	$	823	$	177

	*June 30, 2023*
(dollars in thousands)	*Amortized Cost*		*Gross Unrecognized Holding Gains*		*Gross Unrecognized Holding Losses*			*Fair Value*		*Allowance for Credit Losses*
Held-to-maturity debt securities⁽¹⁾:
Corporate debt securities	$	1,000	$	-	$	(232	)	$	768	$	-

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.

On July 1, 2023, the Company adopted ASU 2016-13, which replaced the incurred loss methodology for determining our allowance for credit losses and related provision for credit losses with an expected loss methodology that is referred to as the Current Expected Credit Losses ("CECL") model. CECL is a significant accounting estimate used in the preparation of the Company's Consolidated Financial Statements. Upon adoption of ASU 2016-13, the Company replaced the incurred loss impairment model that recognizes losses when it becomes probable that a credit loss will be incurred, with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. CECL is a valuation account that is deducted from the amortized cost basis of held-to-maturity debt securities to present the net amount expected to be collected on the securities. Held-to-maturity debt securities, or portions thereof, are charged against the allowance when they are deemed uncollectible. Arriving at an appropriate level of credit losses involves a high degree of judgment. While management uses available information to recognize losses, changing economic conditions and the economic prospects of the issuers may necessitate future additions or reductions to the allowance.

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 December 31, 2023, and June 30, 2023, 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. Since the adoption of ASU 2016-13 on July 1, 2023, and through December 31, 2023, the allowance for credit losses decreased $55,000 which was attributable to the passage of time. For the three and six months ended December 31, 2023, $28,000 and $55,000, respectively, was included as an increase in interest income within net investment income (loss) on the Consolidated Statements of Operations.

The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment. There was no allowance at June 30, 2023.

(dollars in thousands)	*December 31, 2023*
Beginning Balance, prior to adoption of ASU 2016-13	$	-
Impact of ASU 2016-13 adoption		232
Provision for credit losses - reversal ⁽¹⁾		(55	)
Ending Balance	$	177

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 debt securities at December 31, 2023, 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, 2023*
	*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	$	7,056	$	1,000
Fair Value	$	5,784	$	823

1.	Principal payments of $750,000 are due quarterly with a final maturity date in January 2026.

As of December 31, 2023, none of the Company's investments in debt securities were delinquent or in a non-accrual status.

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 $2.4 million as of June 30, 2023. The following table presents the carrying value of equity securities without readily determinable fair values held as of December 31, 2023, and 2022, 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)	*2023*			*2022*			*2023*		*2022*
Other Investments
Carrying value	$	1,613		$	2,633		$	1,613	$	2,633
Upward carrying value changes	$	-		$	5		$	-	$	5
Downward carrying value changes/impairment	$	(775	)	$	(1,841	)	$	-	$	(2	)

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 $2.5 million since their respective acquisitions through December 31, 2023. 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 $4.5 million since their respective acquisitions through December 31, 2023.

The Company has an investment in The Sonar Company (“Sonar”), a company headquartered in the United States, at a cost of $175,000. The investment had a carrying value of approximately $362,000 at December 31, 2023, and at June 30, 2023. 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, and the Company’s ownership of Sonar was approximately 2.8 percent as of December 31, 2023.

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.

	*Six Months Ended*						*Three Months Ended*
(dollars in thousands)	*December 31,*						*December 31,*
Net Investment Income (Loss)	*2023*			*2022*			*2023*			*2022*
Realized gains (losses) on equity securities	$	(740	)	$	-		$	79		$	-
Realized gains (losses) on debt securities		639			905			303			436
Unrealized gains (losses) on equity securities		(164	)		(2,868	)		279			(937	)
Unrealized gains (losses) on debt securities		46			-			46			-
Unrealized gains (losses) on embedded derivatives		(63	)		26			16			26
Unrealized gains (losses) on cash equivalents		(2	)		-			(2	)		-
Dividend and interest income		1,185			900			603			481
Realized foreign currency gains (losses)		2			(307	)		92			110
Total Net Investment Income (Loss)	$	903		$	(1,344	)	$	1,416		$	116

Realized gains on debt securities reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures were $303,000 and $639,000 for the three and six months ended December 31, 2023, respectively, and $436,000 and $905,000 for the three and six months ended December 31, 2022, respectively.

The following table presents unrealized gains and losses recognized during the three and six months ended December 31, 2023, and 2022, on equity securities and debt securities classified as trading still held at each respective date.

	*Six Months Ended*						*Three Months Ended*
	*December 31,*						*December 31,*
(dollars in thousands)	*2023*			*2022*			*2023*		*2022*
Unrealized gains and losses for securities held at the reporting date:
Equity securities:
Net gains and losses recognized during the period	$	(904	)		(2,868	)	$	358	$	(937	)
Less: Net gains and losses recognized during the period on securities sold during the period		35			-			79		-
Net unrealized gains (losses) recognized during the reporting period on securities still held at the reporting date⁽¹⁾	$	(939	)	$	(2,868	)	$	279	$	(937	)
Debt securities classified as trading:
Net gains and losses recognized during the period	$	46			-		$	46	$	-
Less: Net gains and 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	$	46		$	-		$	46	$	-

^1.

Includes net unrealized and realized losses as a result of the measurement alternative of $0 and $775,000 for the three and six months ended December 31, 2023, net unrealized and realized gains of $5,000 for the three months ended December 31, 2022, and net unrealized and realized losses of $1.8 million, for the six months ended December 31, 2022.

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.