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Fair Value Measurements

3 Months Ended

Dec. 31, 2023

NOTE 6: FAIR VALUE MEASUREMENTS

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy prioritizes the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

•Level 1 — Quoted market prices in active markets for identical assets or liabilities.

•Level 2 — Other observable market-based inputs or unobservable inputs that are corroborated by market data.

•Level 3 — Unobservable inputs that are not corroborated by market data.

We have elected not to measure at fair value any eligible items for which fair value measurement is optional.

There were no transfers in or out of Level 1, Level 2 or Level 3 for financial assets or liabilities measured at fair value on a recurring basis during the periods presented.

Financial Assets and Liabilities Not Measured at Fair Value

The tables below present our estimates of fair value of financial assets and liabilities that were not measured at fair value:


	Carrying Value		Estimated Fair Value
	December 31, 2023		December 31, 2023		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
Promissory note receivable due April 2024	$	1,259	$	1,259	$	—	$	—	$	1,259
Promissory note receivable from Founders	17,073		17,073		—		—		17,073

Investments in unconsolidated affiliates	10,125		39,528		39,528		—		—
Financial liabilities:
2024 Convertible Notes	$	34,307	$	34,733	$	—	$	34,733	$	—
2025 Convertible Notes	102,695		94,173		—		94,173		—
2029 Convertible Notes	223,528		236,900		—		236,900		—


	Carrying Value		Estimated Fair Value
	December 31, 2022		December 31, 2022		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
Promissory note receivable due April 2024	$	1,224	$	1,224	$	—	$	—	$	1,224
Promissory note receivable from Founders	15,100		15,100		—		—		15,100

Investments in unconsolidated affiliates	37,789		43,497		43,497		—		—
Financial liabilities:
2024 Convertible Notes	$	34,143	$	35,851	$	—	$	35,851	$	—
2025 Convertible Notes	102,192		89,883		—		89,883		—
2029 Convertible Notes	222,649		225,975		—		225,975		—


	Carrying Value		Estimated Fair Value
	September 30, 2023		September 30, 2023		Fair Value Measurement Using
(in thousands)					Level 1		Level 2		Level 3

Financial assets:
Promissory note receivable due April 2024	$	1,251	$	1,251	$	—	$	—	$	1,251
Promissory note receivable from Founders	16,500		16,500		—		—		16,500
Investments in unconsolidated affiliates	10,987		35,998		35,998		—		—

Financial liabilities:
2024 Convertible Notes	$	34,265	$	35,765	$	—	$	35,765	$	—
2025 Convertible Notes	102,563		96,137		—		96,137		—
2029 Convertible Notes	223,284		224,112		—		224,112		—

Based primarily on the short-term nature of cash and cash equivalents, pawn loans, pawn service charges receivable and other liabilities, we estimate that their carrying value approximates fair value. We consider our cash and cash equivalents, including money market accounts, to be measured using Level 1 inputs and our pawn loans, pawn service charges receivable and other liabilities to be measured using Level 3 inputs. Significant increases or decreases in the underlying assumptions used to value pawn loans, pawn service charges receivable, fees and interest receivable and other debt could significantly increase or decrease these fair value estimates.

In March 2019, we received $1.1 million in previously escrowed seller funds as a result of settling certain indemnification claims with the seller of GPMX. In April 2019, we loaned the $1.1 million back to the seller of GPMX in exchange for a promissory note. The note bears interest at the rate of 2.89% per annum and is secured by certain marketable securities owned by the seller and held in a U.S. brokerage account. All principal and accrued interest is due and payable in April 2024. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of December 31, 2023. As of December 31, 2023, our $1.3 million carrying value of the promissory note is recorded within “Prepaid expenses and other current assets” in our condensed consolidated balance sheets.

In December 2022, 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. As of December 31, 2023, the interest rate on the note was 15.00% per annum, and all principal and accrued interest is due on demand. Based primarily on the short-term nature of the note, we estimate that its carrying value approximates fair value as of December 31, 2023.

We use the equity method of accounting to account for our ownership interest in Cash Converters. The inputs used to generate the fair value of the investment in Cash Converters were considered Level 1 inputs. These inputs consist of (a) the quoted stock price on the Australian Stock Exchange multiplied by (b) the number of shares we owned multiplied by (c) the applicable foreign currency exchange rate as of the end of our reporting period. We included no control premium for owning a large percentage of outstanding shares.

We measured the fair value of the 2024, 2025 and 2029 Convertible Notes using quoted price inputs. The notes are not actively traded, and thus the price inputs represent a Level 2 measurement. As the quoted price inputs are highly variable from day to day, the fair value estimates disclosed above could significantly increase or decrease.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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