Strategic Investments

9 Months Ended

Jun. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

NOTE 5: STRATEGIC INVESTMENTS

Cash Converters International Limited

The following table presents the Company’s ownership in Cash Converters International Limited (“Cash Converters”) for the periods presented:


Date of purchase	Purchase amount (in thousands)	Shares purchased	Shares owned	Ownership percentage
October 1, 2021	$2,500	13,000,000	236,702,991	37.7	%
March 10, 2022	$1,000	5,500,000	242,239,157	38.6	%
April 5, 2022	$2,500	13,000,000	255,239,157	40.7	%
September 15, 2022	$900	5,700,000	260,939,157	41.6	%
November 2, 2022	$2,100	13,000,000	273,939,157	43.7	%

In October 2021, April 2022, November 2022 and April 2023, we received cash dividends of $1.7 million, $1.7 million, $1.8 million and $1.8 million, respectively, from Cash Converters.

The following tables present summary financial information for Cash Converters most recently reported results at December 31, 2022 after translation to U.S. dollars:


	December 31,
(in thousands)	2022		2021

Current assets	$	189,179	$	162,558
Non-current assets	98,301		185,780
Total assets	$	287,480	$	348,338

Current liabilities	$	91,601	$	59,701
Non-current liabilities	56,792		59,915
Shareholders’ equity	139,087		228,722
Total liabilities and shareholders’ equity	$	287,480	$	348,338


	Half-Year Ended December 31,
(in thousands)	2022		2021

Gross revenues	$	98,768	$	84,185
Gross profit	63,800		55,280
Net profit	(73,197)		1

During the three and nine months ended June 30, 2023, we recorded our share of income of $1.5 million and a $29.4 million loss on our share of losses from Cash Converters, respectively, included in “Equity in net (income) loss of unconsolidated affiliates” in the condensed consolidated statements of operations. For the nine months ended June 30, 2023, the $29.4 million loss includes $32.4 million of our share of their non-cash goodwill impairment charge.

See Note 6: Fair Value Measurements for the fair value and carrying value of our investment in Cash Converters.

Founders One, LLC

In October 2021, we invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders One, LLC (“Founders”), a then newly-formed entity with one other member. Founders used that $15.0 million to acquire an equity interest in Simple Management Group, Inc. (“SMG”).

On December 2, 2022, we contributed an additional $15.0 million to Founders associated with our preferred interest, which proceeds were used by Founders to acquire additional common stock in SMG. In addition, we loaned $15.0 million to Founders in exchange for a Demand Promissory Note secured by the common interest in Founders held by the other member.

We have an interest in Founders, a variable interest entity, but because the Company is not the primary beneficiary, we do not consolidate Founders. Further, as we are not the appointed manager, we do not have the ability to direct the activities of the investment entity that most significantly impact its economic performance. Consequently, our equity investment in Founders is accounted for utilizing the measurement alternative within Accounting Standards Codification (“ASC”) 321, Investments — Equity Securities. Our $30.0 million carrying value of the investment and $15.0 million Demand Promissory Note are included in “Other investments” and “Prepaid expenses and other current assets” in our consolidated balance sheets, respectively. Our maximum exposure for losses related to our investment in Founders is our $30.0 million equity investment and $15.0 million Demand Promissory Note plus accrued and unpaid interest.

See Note 6: Fair Value Measurements for the fair values and carrying values of our investment in and loan to Founders, respectively.