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Note 3 - Investments

12 Months Ended

Jun. 30, 2026

Investments and Other Noncurrent Assets [Text Block]

NOTE 3. INVESTMENTS

Concentrations of Credit Risk

A significant portion of the Company's investments measured at fair value on a recurring basis consists of investments in USGIF, with fair values of approximately $9.7 million and $10.5 million as of June 30, 2026, and 2025, respectively. See Note 16, Related Party Transactions, for additional information.

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.

Additionally, the reliance on third-party pricing services adds another layer of uncertainty, as these services use proprietary models and methodologies that incorporate both observable and unobservable inputs. While we review and validate the inputs used by these pricing services, there is no guarantee that the fair values provided fully reflect the prices at which the instruments could be sold in an orderly transaction between market participants at the measurement date.

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 at 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 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 summarizes the major categories of investments with fair values adjusted on a recurring basis as of June 30, 2026, and 2025, and other investments with fair values adjusted on a nonrecurring basis, with fair values shown according to the fair value hierarchy.

	*June 30, 2026*
			*Significant*		*Significant*
			*Other*		*Unobservable*
	*Quoted 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	$	54	$	-	$	-	$	54
Equities - International		773		-		-		773
Exchange Traded Funds - Crypto & digital asset		919		-		-		919
Exchange Traded Funds - Global equity		45		-		-		45
Exchange Traded Funds - Option strategy & income		256		-		-		256
Mutual funds - Fixed income		8,871		-		-		8,871
Mutual funds - Global equity		826		-		-		826
Total investments carried at fair value on a recurring basis:	$	11,744	$	-	$	-	$	11,744
Investments carried at fair value on a nonrecurring basis:
Other investments ¹	$	-	$	-	$	3,913	$	3,913

1. Fair value information is not presented as of June 30, 2026. Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the year ended June 30, 2026. These investments are classified within Level 3 of the fair value hierarchy due to the limited availability of observable market data and the infrequency of observable price changes.

	*June 30, 2025*
			*Significant*		*Significant*
			*Other*		*Unobservable*
	*Quoted 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. Fair value information is not presented as of June 30, 2025. Other investments include equity securities without readily determinable fair values that were adjusted under the measurement alternative during the year ended June 30, 2025. These investments are classified within Level 3 of the fair value hierarchy due to the limited availability of observable market data and the infrequency of observable price changes.

The Company holds 15,000 common shares of HIVE Digital Technologies Ltd. ("HIVE") with a cost basis of $41,000. The investment had a fair value of $55,000 and $27,000 as of June 30, 2026, and 2025, respectively, and was classified within Level 1 in the preceding tables. The common shares represent ownership in HIVE of less than 1.0 percent as of June 30, 2026. Frank Holmes serves on the board as executive chairman of HIVE and held shares, options, and restricted stock units at June 30, 2026. See Note 16, Related Party Transactions, for additional information related to investments in HIVE.

The available-for-sale security carried at fair value on a recurring basis in the preceding table as of June 30, 2025, consisted of an investment in convertible debentures of HIVE. The Company purchased the convertible securities for $15.0 million in January 2021. The investment comprised 8.0% interest-bearing unsecured convertible debentures, payable in quarterly installments with a five-year term, and 5.0 million common share purchase warrants of HIVE. Under the original terms, the principal amount of each debenture was convertible into common shares of HIVE at a conversion price of $2.34 per share, and each warrant, which expired in January 2024, entitled the Company to purchase one common share at an exercise price of $3.00 (Canadian). Following a reverse stock split, the conversion price of the debentures was adjusted to $11.70 per share.

Upon acquisition, the Company recorded the convertible debentures at an estimated fair value of $16.0 million. An unrealized gain of $6.9 million was initially recognized in other comprehensive income (loss) and was subsequently realized in net investment income (loss) over time using the effective interest method.

At June 30, 2025, the Company utilized an independent third-party valuation specialist to estimate the fair value of the HIVE convertible debentures. The Company determined that the fair value measurements utilized significant unobservable inputs and, accordingly, classified the convertible debentures within Level 3 of the fair value hierarchy. The fair value of the convertible debentures was $1.6 million at June 30, 2025. In December 2025, the remaining principal amount of the convertible debentures was paid in full. The following table presents a reconciliation of Level 3 fair value measurements for the year ended June 30, 2026.

*Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis*
	*Year Ended June 30, 2026*
	*Investments in*
(dollars in thousands)	*debt securities*
Beginning Balance	$	1,576
Principal maturities		(1,592	)
Amortization of day one premium		(16	)
Accretion of bifurcation discount		49
Total gains or losses included in:
Net Investment Income (Loss)		108
Other Comprehensive Income (Loss)		(125	)
Ending Balance	$	-

The following table presents quantitative information regarding the significant unobservable inputs used in estimating the fair value of the HIVE convertible debentures 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 June 30, 2026, and 2025.

	*June 30, 2026*
(dollars in thousands)	*Cost*		*Unrealized Gains (Losses)*			*Fair Value*
Trading securities at fair value
Equity securities:
Equities - Domestic	$	87	$	(33	)	$	54
Equities - International		976		(203	)		773
Exchange Traded Funds - Crypto & digital asset		1,579		(660	)		919
Exchange Traded Funds - Global equity		30		15			45
Exchange Traded Funds - Option strategy & income		341		(85	)		256
Mutual funds - Fixed income		9,064		(193	)		8,871
Mutual funds - Global equity		929		(103	)		826
Total trading securities at fair value	$	13,006	$	(1,262	)	$	11,744

	*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, representing an investment in HIVE, at June 30, 2025. At that date, the fair value of the embedded derivative was zero. During the prior fiscal years, the Company recognized unrealized losses related to this embedded derivative through net investment income (loss). In December 2025, the remaining principal amount of the Company’s investment in available-for-sale debt securities containing a conversion option was paid in full, resulting in the realization of a loss of $2.5 million on the expired embedded derivative. As this loss had been previously recognized as unrealized in prior fiscal years, the realization had no net impact on net investment income (loss) for fiscal 2026.

The following details are the components of the Company’s available-for-sale debt investments as of June 30, 2025. There were no available-for-sale debt investments as of June 30, 2026.

	*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 in net investment income (loss) in the Consolidated Statements of Operations in period of loss.

The following table presents the effect of embedded derivatives on the Consolidated Statements of Operations, categorized by risk exposure, for the years ended June 30, 2026, and 2025.

	*Year Ended June 30,*
	*2026*		*2025*
	*Other Income (Loss)*		*Other Income (Loss)*
(dollars in thousands)	*Net Investment Income (Loss)*		*Net Investment Income (Loss)*
Embedded Derivatives:
Equity price risk exposure	$	-	$	(12	)

At June 30, 2026, and 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 investment at June 30, 2026, and 2025.

	*June 30, 2026*
(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	$	(28	)	$	972	$	-	$	-	$	972

	*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 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 June 30, 2026, and 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 $24,000 and $80,000 during fiscal years 2026 and 2025, respectively.

The following table presents the activity in the allowance for credit losses for the held-to-maturity debt investment for the years ended June 30, 2026, and 2025.

	*Year Ended June 30,*
(dollars in thousands)		*2026*			*2025*
Beginning Balance	$	52		$	132
Provision for credit losses - reversal ¹		(24	)		(80	)
Ending Balance	$	28		$	52

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 the held-to-maturity debt security at June 30, 2026, by contractual maturity date.

	June 30, 2026
	Held-to-maturity
	debt securities
	Due in less than
(dollars in thousands)	one year
Amortized Cost	$	1,000
Fair Value	$	972

As of June 30, 2026, and 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. Accrued interest receivable of $25,000 and $40,000 is included in accounts and other receivables on the Consolidated Balance Sheets as of June 30, 2026, and 2025, respectively. The accrued interest receivable as of June 30, 2025, included amounts related to the Company's available-for-sale debt security, which was no longer held at June 30, 2026.

Other Investments

Other investments consist of equity securities that do not have readily determinable fair values and for which the Company does not exercise significant influence. These investments are accounted for under the measurement alternative in accordance with ASC 321 and are carried at cost, less impairment, if any, adjusted for observable price changes in orderly transactions for identical or similar securities of the same issuer. Resulting gains and losses are recognized in net investment income (loss). These investments are not subject to recurring fair value measurements.

The following table presents the carrying value of equity securities without readily determinable fair values, together with the related upward and downward adjustments recognized during the periods presented. These securities are included in the nonrecurring fair value hierarchy when observable price changes occur or impairment indicators are identified.

	*Year Ended June 30,*
(dollars in thousands)	*2026*			*2025*
Other Investments
Carrying value	$	4,682		$	1,349
Upward carrying value changes	$	3,272		$	24
Downward carrying value changes/impairments	$	(48	)	$	(362	)

Period-end carrying values reflect cumulative purchases, sales, return of capital distributions, and adjustments recognized under the measurement alternative. Through June 30, 2026, cumulative upward adjustments totaled $5.8 million and were attributable to observable price changes in orderly transactions for identical or similar securities of the same issuer, including upward adjustments recognized during fiscal 2026 based on observable issuances of similar equity securities by the issuer. Cumulative downward adjustments totaled $5.5 million and consisted of impairments, return of capital distributions, and adjustments resulting from observable price changes. The downward adjustments presented in the table above represent impairment charges recognized during the years ended June 30, 2026, and 2025.

Net Investment Income (Loss)

The following summarizes net investment income (loss) reflected in earnings for the periods presented.

	*Year Ended June 30,*
(dollars in thousands)		*2026*			*2025*
Net Investment Income (Loss)
Net realized gains (losses) on equity securities	$	(53	)	$	(192	)
Net realized gains (losses) on debt securities		108			610
Net realized gains (losses) on embedded derivatives		(2,542	)		-
Net unrealized gains (losses) on equity securities		2,632			(89	)
Net unrealized gains (losses) on debt securities		152			(146	)
Net unrealized gains (losses) on embedded derivatives		2,542			(12	)
Net unrealized gains (losses) on cash equivalents		11			10
Dividend and interest income		1,468			2,191
Net realized foreign currency gains (losses)		(170	)		21
Total Net Investment Income (Loss)	$	4,148		$	2,393

During the years ended June 30, 2026, and 2025, realized gains on debt securities in the amount of $108,000 and $610,000, respectively, were reclassified from other comprehensive income (loss) related to the Company's investment in HIVE debentures.

The following table presents unrealized gains and losses recognized in net investment income (loss) during the years ended June 30, 2026, and 2025, related to equity and debt securities classified as trading that were held as of the respective year-end dates.

	*Year Ended June 30,*
(dollars in thousands)		*2026*			*2025*
Unrealized gains and losses for securities held at the reporting date:
Equity securities:
Net gains and losses recognized during the period	$	2,579		$	(281	)
Less: Net gains and losses recognized during the period on securities sold during the period		(5	)		(17	)
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date ¹	$	2,584		$	(264	)
Debt securities classified as trading:
Net gains and losses recognized during the period	$	152			(146	)
Less: Net gains and losses recognized during the period on securities sold during the period		152			-
Unrealized gains and losses recognized during the reporting period on securities still held at the reporting date ²	$	-		$	(146	)

1. Includes a net gain of $3.2 million in fiscal 2026 and a net loss of $362,000 in fiscal 2025 recognized under the measurement alternative, reflecting unrealized and realized investment gains and losses.

2. In December 2025, senior notes were mandatorily exchanged for equity securities of the issuer pursuant to a court-approved restructuring. Accordingly, the investment is presented within equity securities at the reporting date, and prior-period amounts are reflected within debt securities classified as trading. The exchange was a non-cash, nonrecognition transaction.

Net investment income (loss) can be volatile and varies depending on market fluctuations.