Strategic Investments

12 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Strategic Investments

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.

As of September 30, 2023, we owned 273,939,157 shares, or approximately 43.7%, of Cash Converters. We acquired our original investment (representing approximately 30% of the outstanding shares) in November 2009 and have increased our ownership through the acquisition of additional shares periodically since that time.

The following tables present summary financial information for Cash Converters’s most recently reported results as applicable after translation to U.S. dollars:

	June 30,
(in thousands)	2023		2022
Current assets	$	189,563	$	158,987
Non-current assets	103,595		170,798
Total assets	$	293,158	$	329,785
Current liabilities	$	97,630	$	59,256
Non-current liabilities	58,777		53,045
Shareholders’ equity	136,751		217,484
Total liabilities and shareholders’ equity	$	293,158	$	329,785

	Fiscal Year Ended June 30,
(in thousands)	2023		2022		2021
Gross revenues	$	203,608	$	178,215	$	150,165
Gross profit	$	125,709	$	116,106	$	105,851
Net (loss) profit	$	(65,351)	$	8,099	$	12,081

Our equity in Cash Converters’s net loss was $28.5 million in fiscal 2023. This includes $32.4 million of our share of their non-cash goodwill impairment charge. Our equity in Cash Converters’s net income was $2.9 million and $4.3 million in fiscal 2022 and 2021, respectively. Cash Converters’s accumulated undistributed after-tax loss included in our consolidated retained earnings were $16.2 million as of September 30, 2023.

At September 30, 2023, 2022 and 2021, the fair value of our investment in Cash Converters, as estimated by reference to its quoted market price per share, was greater than its carrying value.

Founders One, LLC

In October 2021, we invested $15.0 million in exchange for a non-redeemable voting participating preferred equity interest in Founders, a newly-formed entity with one other member. Founders used that $15.0 million to acquire an equity interest in 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. Founders then loaned that $15.0 million to SMG in exchange for a Subordinated Promissory Note.

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. As of September 30, 2023, 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. As of September 30, 2023, our maximum exposure for losses related to our investment in Founders was our $30.0 million equity investment and $15.0 million Demand Promissory Note plus accrued and unpaid interest.

In October 2023, we contributed an additional $15.0 million to Founders associated with our preferred interest, for a total equity investment of $45.0 million. See Note 16: Subsequent Events.