Quarterly report pursuant to Section 13 or 15(d)

Long-Term Investments

v3.19.1
Long-Term Investments
 9 Months Ended
Mar. 31, 2019
Equity Method Investments and Cost Method Investments [Abstract]  
Long-Term Investments
LONG-TERM INVESTMENTS
The Company has three investments in privately-held entities, each of which is a precious metals retailer and customer of the Company. For each of these entities, the Company has: 1) an exclusive supplier agreement, for which these entities have agreed to purchase all bullion products required for their businesses exclusively from A-Mark, subject to certain limitations; 2) a product fulfillment services and storage agreement; and 3) the right to appoint a director to the entity's board of directors (which has been exercised in each case). The Company has determined that it is appropriate to account for each of these investments under the equity method of accounting. The following table shows the carrying value and ownership percentage of the Company's investment in each entity:

 
 
 
March 31, 2019
 
June 30, 2018
Entity
 
Carrying Value
 
Ownership Percentage
 
Carrying Value
 
Ownership Percentage
 
 
 
(in thousands)
 
 
 
(in thousands)
 
 
Company A (1)
 
$
2,002

 
7.4
%
 
$
500

 
2.50
%
Company B
 
8,803

 
20.6
%
 
7,888

 
20.6
%
Company C (2)
 
816

 
10.0
%
 
—

 
—
%
 
 
$
11,621

 
 
 
$
8,388

 
 
 
 
 
 
 
 
 
 
 
 
_________________________________
1)
In December 2018, the Company purchased additional shares of Company A's common stock for $1.5 million, thereby increasing the Company’s aggregate ownership interest from 2.5% to 7.4%. In January 2019, the Company obtained a voting seat on Company A's board of directors. Effective with the third quarter of fiscal 2019, the Company changed the accounting of this investment from the cost method to the equity method.
2)
 On January 9, 2019, the Company made an $800,000 investment in Company's C's common stock, representing 10% of its equity.
 
 
 
 
 
 
 
 
 
 

The Company considers these equity method investees to be related parties. See Note 13 for a summary of the Company's aggregate balances and activity with these entities.