Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Dec. 31, 2016 | Feb. 10, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NATIONAL HOLDINGS CORP | |
Trading Symbol | NHLD | |
Entity Central Index Key | 1,023,844 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 12,437,916 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition (Current Period Unaudited) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
ASSETS | ||
Cash | $ 22,176 | $ 21,694 |
Restricted cash | 354 | 354 |
Cash deposits with clearing organizations | 1,030 | 1,030 |
Securities owned, at fair value | 1,206 | 2,357 |
Receivables from broker-dealers and clearing organizations | 2,858 | 3,357 |
Forgivable loans receivable | 1,528 | 1,712 |
Other receivables, net | 3,868 | 5,430 |
Prepaid expenses | 1,854 | 1,910 |
Fixed assets, net | 1,230 | 1,164 |
Intangible assets, net | 5,718 | 5,704 |
Goodwill | 6,531 | 6,531 |
Deferred tax asset, net | 8,690 | 8,958 |
Other assets, principally refundable deposits | 344 | 345 |
Total Assets | 57,387 | 60,546 |
Liabilities | ||
Securities sold, but not yet purchased, at fair value | 1 | 298 |
Accrued commissions and payroll payable | 10,191 | 11,940 |
Accounts payable and accrued expenses | 5,213 | 7,166 |
Deferred clearing and marketing credits | 943 | 995 |
Warrants issuable | 9,963 | 14,055 |
Other | 244 | 319 |
Total Liabilities | 26,555 | 34,773 |
Stockholders’ Equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none outstanding | 0 | 0 |
Common stock $0.02 par value, 150,000,000 shares authorized; 12,437,916 issued and outstanding at December 31, 2016 and September 30, 2016 | 248 | 248 |
Additional paid-in-capital | 66,353 | 66,353 |
Accumulated deficit | (35,784) | (40,843) |
Total National Holdings Corporation Stockholders’ Equity | 30,817 | 25,758 |
Non-Controlling interest | 15 | 15 |
Total Stockholders’ Equity | 30,832 | 25,773 |
Total Liabilities and Stockholders’ Equity | $ 57,387 | $ 60,546 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Financial Condition (Current Period Unaudited) (Parentheticals) - $ / shares | Dec. 31, 2016 | Sep. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 12,437,916 | 12,437,916 |
Common stock, shares outstanding (in shares) | 12,437,916 | 12,437,916 |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues | ||
Commissions | $ 24,506 | $ 22,995 |
Net dealer inventory gains | 2,511 | 2,544 |
Investment banking | 9,726 | 6,117 |
Investment advisory | 3,385 | 3,660 |
Interest and dividends | 716 | 918 |
Transaction fees and clearing services | 2,498 | 2,372 |
Tax preparation and accounting | 856 | 900 |
Other | 371 | 116 |
Total Revenues | 44,569 | 39,622 |
Operating Expenses | ||
Commissions, compensation and fees | 37,258 | 34,710 |
Clearing fees | 738 | 763 |
Communications | 722 | 829 |
Occupancy | 1,008 | 935 |
License and registration | 405 | 355 |
Professional fees | 1,263 | 1,086 |
Interest | 4 | 1 |
Depreciation and amortization | 295 | 300 |
Other administrative expenses | 1,230 | 1,287 |
Total Operating Expenses | 42,923 | 40,266 |
Income (Loss) before Other Income and Income Taxes | 1,646 | (644) |
Other Income | ||
Change in fair value of warrants issuable | 4,092 | 0 |
Total Other Income | 4,092 | 0 |
Income (Loss) before Income Taxes | 5,738 | (644) |
Income tax expense (benefit) | 679 | (191) |
Net Income (Loss) | $ 5,059 | $ (453) |
Net income (loss) per share - Basic (in dollars per share) | $ 0.41 | $ (0.04) |
Net income (loss) per share - Diluted (in dollars per share) | $ 0.41 | $ (0.04) |
Weighted average number of shares outstanding - Basic (in shares) | 12,437,916 | 12,446,064 |
Weighted average number of shares outstanding - Diluted (in shares) | 12,438,474 | 12,446,064 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 3 months ended Dec. 31, 2016 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Non-Controlling Interest |
Net Income (Loss) Attributable to Parent | $ 5,059 | ||||
Balance (in shares) at Sep. 30, 2016 | 12,437,916 | ||||
Balance at Sep. 30, 2016 | 25,773 | $ 248 | $ 66,353 | $ (40,843) | $ 15 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 5,059 | 5,059 | |||
Balance (in shares) at Dec. 31, 2016 | 12,437,916 | ||||
Balance at Dec. 31, 2016 | $ 30,832 | $ 248 | $ 66,353 | $ (35,784) | $ 15 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 5,059 | $ (453) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Change in fair value of warrants issuable | (4,092) | 0 |
Depreciation and amortization | 295 | 300 |
Amortization of forgivable loans to registered representatives | 201 | 141 |
Stock-based compensation | 0 | 37 |
Recovery for doubtful accounts | (115) | (31) |
Amortization of deferred clearing credit | (52) | (53) |
Increase in fair value of contingent consideration payable | 7 | 4 |
Deferred tax (benefit) expense | 268 | (211) |
Changes in assets and liabilities | ||
Restricted cash | 0 | 0 |
Cash deposits with clearing organizations | 0 | 0 |
Securities owned, at fair value | 1,151 | 179 |
Receivables from broker-dealers and clearing organizations | 499 | 336 |
Forgivable loans receivable | (17) | (136) |
Other receivables, net | 1,677 | (791) |
Prepaid expenses | 56 | (452) |
Other assets, principally refundable deposits | 1 | 11 |
Accounts payable, accrued expenses and other liabilities | (3,999) | (999) |
Securities sold, but not yet purchased, at fair value | (297) | (27) |
Net cash provided by (used in) operating activities | 642 | (2,145) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of business | (19) | 0 |
Purchase of fixed assets | (141) | (151) |
Net cash used in investing activities | (160) | (151) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Repurchase of shares of common stock | 0 | (86) |
Net cash used in financing activities | 0 | (86) |
NET INCREASE (DECREASE) IN CASH | 482 | (2,382) |
CASH BALANCE | ||
Beginning of the period | 21,694 | 24,642 |
End of the period | 22,176 | 22,260 |
Cash paid during the period for: | ||
Interest | 4 | 1 |
Income taxes | 81 | 17 |
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Fixed assets (acquired but not paid) | 23 | 0 |
Identifiable intangible asset acquired | 211 | 0 |
Contingent consideration payable | (192) | 0 |
Cash paid | $ 19 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying condensed consolidated financial statements of the Company, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated financial statements as of December 31, 2016 and for the three months ended December 31, 2016 and 2015 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at September 30, 2016 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2016 for additional disclosures and accounting policies. Certain items in the consolidated statement of operations for the fiscal 2016 period have been reclassified to conform to the presentation in the fiscal 2017 period. Such reclassifications did not have a material impact on the presentation of the overall financial statements. |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS National Holdings Corporation (“National” or the “Company”), a Delaware corporation organized in 1996, operates through its wholly owned subsidiaries which principally provide financial services. Through its broker-dealer and investment advisory subsidiaries, the Company (1) offers full service retail brokerage and investment advisory services to individual, corporate and institutional clients, (2) provides investment banking, merger, acquisition and advisory services to micro, small and mid-cap high growth companies, (3) engages in trading securities, including making markets in micro and small-cap, NASDAQ and other exchange listed stocks and (4) provides liquidity in the United States Treasury marketplace. Broker-dealer subsidiaries consist of National Securities Corporation (“National Securities” or “NSC”) and vFinance Investments, Inc. (“vFinance Investments”) (collectively, the “Broker-Dealer Subsidiaries”). The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York City, New York, Boca Raton, Florida, and Seattle, Washington. Broker-dealer subsidiaries are introducing brokers and clear all transactions through clearing organizations, on a fully disclosed basis. The Broker-Dealer Subsidiaries are registered with the Securities and Exchange Commission ("SEC") and the Commodities and Futures Trading Commission, and are members of the Financial Industry Regulatory Authority ("FINRA"), the Securities Investor Protection Corporation and the National Futures Association. The Company’s wholly-owned subsidiary, National Asset Management, Inc. ("NAM"), is a federally-registered investment adviser providing asset management advisory services to retail clients for a fee based upon a percentage of assets managed. The Company’s wholly-owned subsidiaries, National Insurance Corporation ("National Insurance") and Prime Financial Services ("Prime Financial"), provide fixed insurance products to their clients, including life insurance, disability insurance, long term care insurance and fixed annuities. The Company’s wholly-owned subsidiary, Gilman Ciocia, Inc. ("Gilman"), provides tax preparation and accounting services to individuals and small to midsize companies. The Company’s wholly-owned subsidiary, GC Capital Corporation ("GC"), provides licensed mortgage brokerage services in New York and Florida. On September 9, 2016, a subsidiary of Fortress Biotech, Inc. (“Fortress”), acquired a controlling interest in the Company. See Note 19. |
RECEIVEABLES FROM BROKER-DEALER
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES | 3 Months Ended |
Dec. 31, 2016 | |
Brokers and Dealers [Abstract] | |
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES | RECEIVABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES At December 31, 2016 and September 30, 2016 , the receivables of $2,858,000 and $3,357,000 , respectively, from broker-dealers and clearing organizations represent net amounts due for fees and commissions associated with the Company’s retail brokerage business as well as asset based fee revenues associated with the Company’s Investment advisory business. Other receivables, net, at December 31, 2016 and September 30, 2016 of $3,868,000 and $5,430,000 , respectively, principally represent trailing fees and fees for tax and accounting services and are net of allowance for doubtful accounts of $620,000 and $735,000 , respectively. |
FORGIVABLE LOANS RECEIVABLE
FORGIVABLE LOANS RECEIVABLE | 3 Months Ended |
Dec. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
FORGIVABLE LOANS RECEIVABLE | FORGIVABLE LOANS RECEIVABLE From time to time, the Company's operating subsidiaries may make loans, evidenced by promissory notes, primarily to newly recruited independent financial advisors as an incentive for their affiliation. The notes receivable balance is comprised of unsecured non-interest-bearing and interest-bearing loans (interest rates ranging up to 9% ). These notes have various schedules for repayment or forgiveness based on production or retention requirements being met and mature at various dates through 2021. Forgiveness of loans amounted to $201,000 and $141,000 for the three months ended December 31, 2016 and 2015 , respectively, and the related compensation was included in commissions, compensation and fees in the condensed consolidated statements of operations. In the event the advisor’s affiliation with the subsidiary terminates, the advisor is required to repay the unamortized balance of any notes payable. The Company provides an allowance for doubtful accounts on the notes based on historical collection experience and continually evaluates the receivables for collectability and possible write-offs where a loss is deemed probable. As of December 31, 2016 and September 30, 2016 , no allowance for doubtful accounts was required. Forgivable loan activity for the three months ended December 31, 2016 is as follows: Balance, October 1, 2016 $ 1,712,000 Additions 17,000 Amortization (201,000 ) Balance, December 31, 2016 $ 1,528,000 There were no unamortized loans outstanding at December 31, 2016 and September 30, 2016 attributable to registered representatives who ended their affiliation with the Broker-Dealer Subsidiaries prior to the fulfillment of their obligation. |
SECURITIES OWNED AND SECURITIES
SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED AT FAIR VALUE | 3 Months Ended |
Dec. 31, 2016 | |
Schedule of Investments [Abstract] | |
SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED AT FAIR VALUE | SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED AT FAIR VALUE Classification of securities are as follows: Fair Value Measurements As of December 31, 2016 Securities owned at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 172,000 — — $ 172,000 Municipal bonds 930,000 — — 930,000 Restricted stock — 104,000 — 104,000 $ 1,102,000 $ 104,000 $ — $ 1,206,000 Securities sold, but not yet purchased at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 1,000 — — $ 1,000 As of September 30, 2016 Securities owned at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 101,000 — — $ 101,000 Municipal bonds 2,111,000 — — 2,111,000 Restricted stock — 145,000 — 145,000 $ 2,212,000 $ 145,000 $ — $ 2,357,000 Securities sold, but not yet purchased at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 298,000 $ — $ — $ 298,000 |
FIXED ASSETS
FIXED ASSETS | 3 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | FIXED ASSETS Fixed assets as of December 31, 2016 and September 30, 2016 consist of the following: December 31, September 30, Estimated Useful Lives Equipment $ 1,155,000 $ 1,036,000 5 Furniture and fixtures 169,000 163,000 5 Leasehold improvements 692,000 653,000 Lesser of useful Capital leases (primarily composed of computer equipment) 739,000 739,000 5 2,755,000 2,591,000 Less accumulated depreciation and amortization (1,525,000 ) (1,427,000 ) Fixed assets – net $ 1,230,000 $ 1,164,000 Depreciation expense associated with fixed assets for the three months ended December 31, 2016 and 2015 was $98,000 and $107,000 , respectively. |
BUSINESS COMBINATION AND CONTIN
BUSINESS COMBINATION AND CONTINGENT CONSIDERATION | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Business Combinations and Contingent Consideration | BUSINESS COMBINATION AND CONTINGENT CONSIDERATION In October 2016, Gilman acquired certain assets of a tax preparation and accounting business that was deemed to be a business acquisition. The consideration for the transaction consisted of a cash payment at closing of $19,000 and contingent consideration payable in cash having a fair value of $192,000 , for which a liability (included in Accounts payable and accrued expenses) was recognized based on the estimated acquisition date fair value of the potential earn-out. The earn-out is based on revenue, as defined in the acquisition agreement, during the 36 -month period following the closing up to a maximum of $225,600 . The liability was valued using an income-based approach using unobservable inputs (Level 3) and reflects the Company’s own assumptions. The liability will be revalued at each Balance Sheet date with changes therein recorded in earnings. The fair value of the acquired assets was allocated to customer relationships, which is being amortized over three years. Results of operations of the acquired business are included in the accompanying consolidated statements of operations from the date of acquisition and were not material. In addition, based on materiality, pro forma results are not presented. Set below are changes in the carrying value of contingent consideration for the three-month period ended December 31, 2016 related to acquisitions: Fair value of contingent consideration at September 30, 2016 $ 424,000 Fair value of contingent consideration in connection with above acquisition 192,000 Payments — Change in fair value 7,000 Fair value of contingent consideration at December 31, 2016 $ 623,000 ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY On September 12, 2016, FBIO Acquisition, Inc. (“FBIO Acquisition”), a wholly-owned subsidiary of Fortress, completed a tender offer (the “Offer”) for all outstanding shares of the Company at a price of $3.25 per share, net to the seller in cash (less any required withholding taxes and without interest) (the “Offer Price”), pursuant to the terms of an Agreement and Plan of Merger dated as of April 27, 2016 (as amended, the “Merger Agreement”) among the Company, Fortress and FBIO Acquisition. The Offer expired on September 9, 2016, and a total of 7,037,482 shares were validly tendered and not withdrawn (including shares delivered through notices of guaranteed delivery), representing approximately 56.6% of the Company's issued and outstanding shares of common stock immediately following the completion of the Offer (in each case, without giving effect to the issuance or exercise of the Dividend Warrants). On September 12, 2016, FBIO Acquisition accepted for payment all shares that were validly tendered and not withdrawn prior to the expiration time of the Offer (such time of acceptance, the "Acceptance Time") and delivered payment for such shares. Dividend Warrants In accordance with the Merger Agreement, since less than 80% of the Company's issued and outstanding shares of common stock were tendered, the Company remains a publicly-traded company and stockholders post-tender offer will receive from the Company a five year warrant per held share to purchase an additional share of the Company's common stock at $3.25 as a dividend to all holders of the Company's common stock. As the Company does not have the ability to settle the warrants with unregistered shares and maintenance of an effective registration statement (which did not exist at December 31, 2016 or September 30, 2016) may be considered outside of the Company’s control, net cash settlement of the warrants is assumed. Accordingly, as the Company was obligated to issue the warrants, the fair value of the 12,437,916 warrants issuable are being classified as a liability in the condensed consolidated statement of financial condition at December 31, 2016 and September 30, 2016 . This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as “change in fair value of warrants issuable” in the condensed consolidated statements of operations. Such valuation (using level 2 inputs) was determined by use of the Black-Scholes option pricing model using the following assumptions: Fiscal Year 2017 Fiscal Year 2016 Dividend yield 0.00 % 0.00 % Expected volatility 38.24 % 38.20 % Risk-free interest rate 1.93 % 1.14 % Life (in years) 5 5 In the Merger Agreement, the Company agreed to set a record date within ninety ( 90 ) days following the Acceptance Time with respect to the distribution to its stockholders of warrants to purchase one share of its common stock for every share of its common stock owned at an exercise price of $3.25 per share (the “Dividend Warrants”). The Company announced on October 26, 2016, that it had established December 9, 2016 as the record date with respect to the Dividend Warrants. As a result of “due bill” trading procedures, those persons who held shares of the Company's common stock as of the record date, or who acquire shares of the Company's common stock in the market following the record date, and in each case who continue to hold such shares at the close of trading the date before the ex-dividend date to be established by The Nasdaq Stock Market with respect to the Dividend Warrants, will be entitled to receive a Dividend Warrant with respect to each share of the Company's common stock owned by such person as of the ex-dividend date. Conversely, those persons who held shares of the Company's common stock as of the record date, or who acquire shares of the Company's common stock in the market following the record date, but in each case who do not hold such shares of the Company's common stock at the close of trading on the date before the ex-dividend date, will not be entitled to receive any Dividend Warrants with respect to such shares. Therefore, a shareholder selling their shares of the Company's common stock prior to the ex-dividend date would not receive any Dividend Warrants with respect to the shares that are sold by such person even if such person held the shares on the record date, since the shares of the Company's common stock sold would be accompanied by a “due-bill” entitling the buyer of those shares to receive the Dividend Warrants with respect to such shares. The actual right to receive the Dividend Warrants with respect to any shares of the Company's common stock requires still holding such shares until the ex-dividend date. The warrants and the shares of common stock issuable upon the exercise of the warrants, have been registered on a registration statement that was filed with the SEC and was declared effective January 13, 2017. The Company established January 18, 2017 as the distribution date of a dividend of warrants to purchase shares of the Company's common stock and the warrants began trading on the Nasdaq Capital Market under the symbol “NHLDW” on that date. NASDAQ Stock Market has established January 19, 2017 as the ex-dividend date for the dividend of the warrants. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangibles consisted of the following at December 31, 2016 and September 30, 2016 : December 31, 2016 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 7,180,000 $ 2,222,000 $ 4,958,000 3-10 Non-compete 296,000 296,000 — 2 Gilman brand name 760,000 — 760,000 Indefinite $ 8,236,000 $ 2,518,000 $ 5,718,000 September 30, 2016 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 6,969,000 $ 2,025,000 $ 4,944,000 7-10 Non-compete 296,000 296,000 — 2 Gilman brand name 760,000 — 760,000 Indefinite $ 8,025,000 $ 2,321,000 $ 5,704,000 Amortization expense associated with intangible assets for the three months ended December 31, 2016 and 2015 was $197,000 and $193,000 , respectively. The estimated future amortization expense of the finite lived intangible assets for the next five fiscal years and thereafter is as follows: Year ending Nine months ending September 30, 2017 $ 595,000 2018 791,000 2019 791,000 2020 721,000 2021 721,000 Thereafter 1,339,000 Total $ 4,958,000 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of December 31, 2016 and September 30, 2016 consist of the following: December 31, September 30, Legal $ 752,000 $ 1,346,000 Audit 263,000 198,000 Telecommunications 178,000 209,000 Data services 235,000 425,000 Regulatory 623,000 444,000 Settlements 421,000 832,000 Contingent consideration payable 623,000 424,000 Deferred rent 123,000 65,000 Other 1,995,000 3,223,000 Total $ 5,213,000 $ 7,166,000 |
PER SHARE DATA
PER SHARE DATA | 3 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
PER SHARE DATA | PER SHARE DATA Basic net income (loss) per share of common stock attributable to the Company is computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income (loss) per share is computed on the basis of such weighted average number of shares of common stock outstanding plus the dilutive effect of incremental shares of common stock potentially issuable under outstanding options, warrants and unvested restricted stock units utilizing the treasury stock method. A reconciliation of basic and diluted common shares used in the computation of per share data follows: Three Month Period Ended December 31, 2016 2015 Basic weighted-average shares 12,437,916 12,446,064 Effect of dilutive securities: Options 558 — Warrants — — Diluted weighted-average shares 12,438,474 12,446,064 The following potential common share equivalents are not included in the above diluted computation because to do so would be anti-dilutive: Three Month Period Ended December 31, 2016 2015 Options 1,202,000 1,354,500 Warrants 21,558 — 1,223,558 1,354,500 |
OFF BALANCE SHEET RISK AND CONC
OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK | 3 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK | OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK The Company is engaged in trading and providing a broad range of securities brokerage and investment services to a diverse group of retail and institutional clientele, as well as corporate finance and investment banking services to corporations and businesses. Counterparties to the Company’s business activities include broker-dealers and clearing organizations, banks and other financial institutions. The Company uses clearing brokers to process transactions and maintain customer accounts for the Company on a fee basis. The Company permits the clearing firms to extend credit to its clientele secured by cash and securities in the client’s account. The Company’s exposure to credit risk associated with the non-performance by its customers and counterparties in fulfilling their contractual obligations can be directly impacted by volatile or illiquid trading markets, which may impair the ability of customers and counterparties to satisfy their obligations to the Company. The Company has agreed to indemnify the clearing brokers for losses they incur while extending credit to the Company’s clients. It is the Company’s policy to review, as necessary, the credit standing of its customers and counterparties. Amounts due from customers that are considered uncollectible by the clearing broker are charged back to the Company by the clearing broker when such amounts become determinable. Upon notification of a charge back, such amounts, in total or in part, are then either (i) collected from the customers, (ii) charged to the broker initiating the transaction and/or (iii) charged to operations, based on the particular facts and circumstances. The Company maintains cash in bank deposits, which, at times, may exceed federally insured limits. The Company has not experienced and does not expect to experience losses on such accounts. A short sale involves the sale of a security that is not owned in the expectation of purchasing the same security (or a security exchangeable) at a later date at a lower price. A short sale involves the risk of a theoretically unlimited increase in the market price of the security that would result in a theoretically unlimited loss. |
NEW ACCOUNTING GUIDANCE
NEW ACCOUNTING GUIDANCE | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
NEW ACCOUNTING GUIDANCE | NEW ACCOUNTING GUIDANCE In May 2014, the FASB issued an accounting standard update on revenue recognition. The new guidance creates a single, principle-based model for revenue recognition and expands and improves disclosures about revenue. The new guidance is effective for the Company beginning October 1, 2018, and must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company is currently evaluating the potential impact of this standard on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for the Company beginning October 1, 2019 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning October 1, 2017 for both interim and annual reporting periods. The Company is currently assessing the impact that the adoption of ASU 2016-09 will have on its financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 reduces the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. Early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company does not anticipate that the adoption of ASU 2016-15 will have a material impact on its financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash”. ASU 2016-18 reduces the diversity in the presentation of restricted cash and restricted cash equivalents in the statement. The statement requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. Early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company is currently assessing the impact that the adoption of ASU 2016-18 will have on its financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. The Company is currently assessing the impact that the adoption of ASU 2017-01 will have on its financial statements. In January 2017, FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", which eliminates the second step of the previous FASB guidance for testing goodwill for impairment and is intended to reduce cost and complexity of goodwill impairment testing. The standard is effective for the Company beginning October 1, 2020 for both interim and annual periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently assessing the impact that the adoption of ASU 2017-04 will have on its financial statements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The Company leases office space in various states expiring at various dates through October 2026, and as of December 31, 2016 , is committed under operating leases for future minimum lease payments as follows: Fiscal Year Ending Lease Payments Less, Sublease Income Net Nine months ending September 30, 2017 $ 2,230,000 $ 48,000 $ 2,182,000 2018 2,484,000 — 2,484,000 2019 1,814,000 — 1,814,000 2020 1,618,000 — 1,618,000 2021 1,308,000 — 1,308,000 Thereafter 2,322,000 — 2,322,000 $ 11,776,000 $ 48,000 $ 11,728,000 The total amount of rent payable under the leases is recognized on a straight line basis over the term of the leases. Rental expense under all operating leases, excluding sublease income, for the three months ended December 31, 2016 and 2015 was $995,000 and $956,000 , respectively. Sublease income under all operating subleases for the three months ended December 31, 2016 and 2015 was approximately $37,000 and $36,000 , respectively. As of December 31, 2016 , the Company and its subsidiaries had three outstanding letters of credit, which have been issued in the maximum amount of $354,000 as security for property leases, and which are collateralized by the restricted cash as reflected in the statements of financial condition. Litigation and Regulatory Matters The Company and its subsidiaries are defendants or respondents in various pending and threatened arbitrations, administrative proceedings and lawsuits seeking compensatory damages. Several cases have no stated alleged damages. Claim amounts are infrequently indicative of the actual amounts the Company will be liable for, if any. Further, the Company has a history of collecting amounts awarded in these types of matters from its registered representatives that are still affiliated, as well as from those that are no longer affiliated. Many of these claimants also seek, in addition to compensatory damages, punitive or treble damages, and all seek interest, costs and fees. These matters arise in the normal course of business. The Company intends to vigorously defend itself in these actions, and the ultimate outcome of these matters cannot be determined at this time. Liabilities for potential losses from complaints, legal actions, government investigations and proceedings are established where the Company believes that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In making these decisions, management bases its judgments on its knowledge of the situations, consultations with legal counsel and its historical experience in resolving similar matters. In many lawsuits, arbitrations and regulatory proceedings, it is not possible to determine whether a liability has been incurred or to estimate the amount of that liability until the matter is close to resolution. However, accruals are reviewed regularly and are adjusted to reflect the Company’s estimates of the impact of developments, rulings, advice of counsel and any other information pertinent to a particular matter. Because of the inherent difficulty in predicting the ultimate outcome of legal and regulatory actions, management cannot predict with certainty the eventual loss or range of loss related to such matters. At December 31, 2016 and September 30, 2016 , the Company accrued approximately $421,000 and $832,000 , respectively. These amounts are included in accounts payable and other liabilities in the statements of financial condition. The Company has included in "Professional fees" litigation and FINRA related expenses of $546,000 and $225,000 for the three months ended December 31, 2016 and 2015 , respectively. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 3 Months Ended |
Dec. 31, 2016 | |
Disclosure Text Block [Abstract] | |
NET CAPITAL REQUIREMENTS | NET CAPITAL REQUIREMENTS National Securities is subject to the SEC's Uniform Net Capital Rule (Rule 15c3-1) (the "Rule"), which, among other things, requires the maintenance of minimum net capital. At December 31, 2016 , National Securities had net capital of $8,562,434 which was $8,312,434 in excess of its required net capital of $250,000 . National Securities is exempt from the provisions of the SEC's Rule 15c3-3 since it is an introducing broker-dealer that clears all transactions on a fully disclosed basis and promptly transmits all customer funds and securities to clearing brokers. vFinance Investments is also subject to the Rule, which, among other things, requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2016 , vFinance Investments had net capital of $2,319,352 which was $1,319,352 in excess of its required net capital of $1,000,000 . vFinance Investments' ratio of aggregate indebtedness to net capital was 0.7 to 1 . vFinance Investments is exempt from the provisions of the SEC's Rule 15c3-3 since it is an introducing broker-dealer that clears all transactions on a fully disclosed basis and promptly transmits all customer funds and securities to clearing brokers. Advances, dividend payments and other equity withdrawals from the Company's Broker-Dealer Subsidiaries are restricted by the regulations of the SEC, and other regulatory agencies. These regulatory restrictions may limit the amounts that a subsidiary may dividend or advance to the Company. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 3 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION Stock Options Information with respect to stock option activity during the three months ended December 31, 2016 follows: Options Weighted Weighted Weighted Aggregate Outstanding at September 30, 2016 1,221,500 $ 6.51 $ 1.22 3.31 $ — Forfeited (7,500 ) $ 3.80 $ 1.66 $ — Outstanding at December 31, 2016 1,214,000 $ 6.53 $ 1.22 3.06 $ — Vested and exercisable at December 31, 2016 1,214,000 $ 6.53 $ 1.22 3.06 $ — As of September 30, 2016 , all compensation expense associated with the grants of stock options had been recognized. During the three months ended December 31, 2015 , the Company recognized compensation expense of $37,000 related to stock options. Warrants The following table summarizes information about warrant activity during the three months ended December 31, 2016 (not including the warrants discussed in Note 18): Warrants Weighted Weighted Outstanding at September 30, 2016 23,029 $ 5.00 0.75 Forfeited or expired (1,471 ) $ 5.00 Outstanding and exercisable at December 31, 2016 21,558 $ 5.00 0.54 |
SHARE REPURCHASE
SHARE REPURCHASE | 3 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHARE REPURCHASE | SHARE REPURCHASE In August 2015, the Company’s Board of Directors authorized the repurchase of up to $2 million of the Company’s common stock. Share repurchases, if any, will be made using a variety of methods, which may include open market purchases, privately negotiated transactions or block trades, or any combination of such methods, in accordance with applicable insider trading and other securities laws and regulations. The Company's Board did not stipulate an expiration date for this repurchase and the purchase decisions are at the discretion of the Company's management. During the three months ended December 31, 2016 , the Company did not repurchase any shares. During the three months ended December 31, 2015 , the Company repurchased 33,933 common shares at a cost of approximately $86,000 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company files a consolidated federal income tax return and certain combined state and local income tax returns with its subsidiaries. Income tax expense (benefit) for the three month periods ended December 31, 2016 and 2015 is based on the estimated annual effective tax rate. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. The effective tax rate for the three month periods ended December 31, 2016 and 2015 differs from the federal statutory income tax rate principally due to non-deductible expenses and state and local income taxes and with respect to the 2017 period non-taxable income related to the change in fair value of warrants issuable. At December 31, 2016 , the Company's net deferred tax asset is principally comprised of net operating loss carryforwards. Management believes that is more likely than not that its deferred tax assets will be realized and, accordingly, has not provided a valuation allowance against such amount. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable segments. The brokerage and advisory services segment includes broker-dealer and investment advisory services, the sale of insurance products and licensed mortgage brokerage services provided by the Broker-Dealer Subsidiaries, NAM, National Insurance, Prime Financial and GC. The tax and accounting services segment includes tax preparation and accounting services provided by Gilman. The Corporate pre-tax income (loss) consists of certain items that have not been allocated to reportable segments. Segment information for the three months ended December 31, 2016 and 2015 is as follows: Brokerage and Tax and Corporate Total Three Months Ended December 31, 2016 Revenues $ 43,713,000 $ 856,000 $ — $ 44,569,000 Pre-tax income (loss) 3,096,000 (712,000 ) 3,354,000 (a) 5,738,000 Assets 41,543,000 1,911,000 13,933,000 (b) 57,387,000 Depreciation and amortization 158,000 48,000 89,000 295,000 Interest 4,000 — — 4,000 Capital expenditures 19,000 48,000 97,000 164,000 2015 Revenues $ 38,722,000 $ 900,000 $ — $ 39,622,000 Pre-tax income (loss) 1,023,000 (1,158,000 ) (509,000 ) (c) (644,000 ) Assets 40,716,000 2,929,000 18,160,000 (b) 61,805,000 Depreciation and amortization 199,000 45,000 56,000 300,000 Interest 1,000 — — 1,000 Capital expenditures 106,000 18,000 27,000 151,000 (a) Consists of fair value gain of warrants issuable offset by operating expenses not allocated to reportable segments. (b) Consists principally of deferred tax asset. (c) Consists of operating expenses not allocated to reportable segments. |
ACQUISITION OF CONTROLLING INTE
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Agreement and Plan of Merger | BUSINESS COMBINATION AND CONTINGENT CONSIDERATION In October 2016, Gilman acquired certain assets of a tax preparation and accounting business that was deemed to be a business acquisition. The consideration for the transaction consisted of a cash payment at closing of $19,000 and contingent consideration payable in cash having a fair value of $192,000 , for which a liability (included in Accounts payable and accrued expenses) was recognized based on the estimated acquisition date fair value of the potential earn-out. The earn-out is based on revenue, as defined in the acquisition agreement, during the 36 -month period following the closing up to a maximum of $225,600 . The liability was valued using an income-based approach using unobservable inputs (Level 3) and reflects the Company’s own assumptions. The liability will be revalued at each Balance Sheet date with changes therein recorded in earnings. The fair value of the acquired assets was allocated to customer relationships, which is being amortized over three years. Results of operations of the acquired business are included in the accompanying consolidated statements of operations from the date of acquisition and were not material. In addition, based on materiality, pro forma results are not presented. Set below are changes in the carrying value of contingent consideration for the three-month period ended December 31, 2016 related to acquisitions: Fair value of contingent consideration at September 30, 2016 $ 424,000 Fair value of contingent consideration in connection with above acquisition 192,000 Payments — Change in fair value 7,000 Fair value of contingent consideration at December 31, 2016 $ 623,000 ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY On September 12, 2016, FBIO Acquisition, Inc. (“FBIO Acquisition”), a wholly-owned subsidiary of Fortress, completed a tender offer (the “Offer”) for all outstanding shares of the Company at a price of $3.25 per share, net to the seller in cash (less any required withholding taxes and without interest) (the “Offer Price”), pursuant to the terms of an Agreement and Plan of Merger dated as of April 27, 2016 (as amended, the “Merger Agreement”) among the Company, Fortress and FBIO Acquisition. The Offer expired on September 9, 2016, and a total of 7,037,482 shares were validly tendered and not withdrawn (including shares delivered through notices of guaranteed delivery), representing approximately 56.6% of the Company's issued and outstanding shares of common stock immediately following the completion of the Offer (in each case, without giving effect to the issuance or exercise of the Dividend Warrants). On September 12, 2016, FBIO Acquisition accepted for payment all shares that were validly tendered and not withdrawn prior to the expiration time of the Offer (such time of acceptance, the "Acceptance Time") and delivered payment for such shares. Dividend Warrants In accordance with the Merger Agreement, since less than 80% of the Company's issued and outstanding shares of common stock were tendered, the Company remains a publicly-traded company and stockholders post-tender offer will receive from the Company a five year warrant per held share to purchase an additional share of the Company's common stock at $3.25 as a dividend to all holders of the Company's common stock. As the Company does not have the ability to settle the warrants with unregistered shares and maintenance of an effective registration statement (which did not exist at December 31, 2016 or September 30, 2016) may be considered outside of the Company’s control, net cash settlement of the warrants is assumed. Accordingly, as the Company was obligated to issue the warrants, the fair value of the 12,437,916 warrants issuable are being classified as a liability in the condensed consolidated statement of financial condition at December 31, 2016 and September 30, 2016 . This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as “change in fair value of warrants issuable” in the condensed consolidated statements of operations. Such valuation (using level 2 inputs) was determined by use of the Black-Scholes option pricing model using the following assumptions: Fiscal Year 2017 Fiscal Year 2016 Dividend yield 0.00 % 0.00 % Expected volatility 38.24 % 38.20 % Risk-free interest rate 1.93 % 1.14 % Life (in years) 5 5 In the Merger Agreement, the Company agreed to set a record date within ninety ( 90 ) days following the Acceptance Time with respect to the distribution to its stockholders of warrants to purchase one share of its common stock for every share of its common stock owned at an exercise price of $3.25 per share (the “Dividend Warrants”). The Company announced on October 26, 2016, that it had established December 9, 2016 as the record date with respect to the Dividend Warrants. As a result of “due bill” trading procedures, those persons who held shares of the Company's common stock as of the record date, or who acquire shares of the Company's common stock in the market following the record date, and in each case who continue to hold such shares at the close of trading the date before the ex-dividend date to be established by The Nasdaq Stock Market with respect to the Dividend Warrants, will be entitled to receive a Dividend Warrant with respect to each share of the Company's common stock owned by such person as of the ex-dividend date. Conversely, those persons who held shares of the Company's common stock as of the record date, or who acquire shares of the Company's common stock in the market following the record date, but in each case who do not hold such shares of the Company's common stock at the close of trading on the date before the ex-dividend date, will not be entitled to receive any Dividend Warrants with respect to such shares. Therefore, a shareholder selling their shares of the Company's common stock prior to the ex-dividend date would not receive any Dividend Warrants with respect to the shares that are sold by such person even if such person held the shares on the record date, since the shares of the Company's common stock sold would be accompanied by a “due-bill” entitling the buyer of those shares to receive the Dividend Warrants with respect to such shares. The actual right to receive the Dividend Warrants with respect to any shares of the Company's common stock requires still holding such shares until the ex-dividend date. The warrants and the shares of common stock issuable upon the exercise of the warrants, have been registered on a registration statement that was filed with the SEC and was declared effective January 13, 2017. The Company established January 18, 2017 as the distribution date of a dividend of warrants to purchase shares of the Company's common stock and the warrants began trading on the Nasdaq Capital Market under the symbol “NHLDW” on that date. NASDAQ Stock Market has established January 19, 2017 as the ex-dividend date for the dividend of the warrants. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS During the three months ended December 31, 2016 , Investment Banking revenues include approximately $2,665,000 of placement agent fees related to a private placement of shares and warrants for a subsidiary of Fortress. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 3 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The Company has entered into agreements to provide investment banking and advisory services to numerous entities that are variable interest entities ("VIEs") under the accounting guidance. As the fee arrangements under such agreements are arm's-length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company is not required to consolidate such VIEs. Fees attributable to such arrangements for the three months ended December 31, 2016 and 2015 were $3.1 million and $2.7 million , respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On January 26, 2017, the stockholders of the Company approved (i) to amend the Company's certificate of incorporation to decrease the number of authorized shares of its common stock from 150,000,000 shares to 75,000,000 shares and (ii) to amend the Company's 2013 Omnibus Incentive Plan to increase the number of shares of its common stock authorized for issuance by 650,000 . |
NEW ACCOUNTING GUIDANCE (Polici
NEW ACCOUNTING GUIDANCE (Policies) | 3 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Guidance | NEW ACCOUNTING GUIDANCE In May 2014, the FASB issued an accounting standard update on revenue recognition. The new guidance creates a single, principle-based model for revenue recognition and expands and improves disclosures about revenue. The new guidance is effective for the Company beginning October 1, 2018, and must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. The Company is currently evaluating the potential impact of this standard on its financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for the Company beginning October 1, 2019 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for the Company beginning October 1, 2017 for both interim and annual reporting periods. The Company is currently assessing the impact that the adoption of ASU 2016-09 will have on its financial statements. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 reduces the diversity of how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. Early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company does not anticipate that the adoption of ASU 2016-15 will have a material impact on its financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash”. ASU 2016-18 reduces the diversity in the presentation of restricted cash and restricted cash equivalents in the statement. The statement requires that restricted cash and restricted cash equivalents be included as components of total cash and cash equivalents as presented on the statement of cash flows. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. Early adoption is permitted. The ASU should be applied retrospectively to all periods presented. The Company is currently assessing the impact that the adoption of ASU 2016-18 will have on its financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this Update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The standard is effective for the Company beginning October 1, 2018 for both interim and annual periods. The Company is currently assessing the impact that the adoption of ASU 2017-01 will have on its financial statements. In January 2017, FASB issued ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment", which eliminates the second step of the previous FASB guidance for testing goodwill for impairment and is intended to reduce cost and complexity of goodwill impairment testing. The standard is effective for the Company beginning October 1, 2020 for both interim and annual periods. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently assessing the impact that the adoption of ASU 2017-04 will have on its financial statements. |
FORGIVABLE LOANS RECEIVABLE (Ta
FORGIVABLE LOANS RECEIVABLE (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Schedule of Forgivable Loan Activity | Forgivable loan activity for the three months ended December 31, 2016 is as follows: Balance, October 1, 2016 $ 1,712,000 Additions 17,000 Amortization (201,000 ) Balance, December 31, 2016 $ 1,528,000 |
SECURITIES OWNED AND SECURITI31
SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED AT FAIR VALUE (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Schedule of Investments [Abstract] | |
Schedule of Securities Owned and Sold, Not yet Purchased | Classification of securities are as follows: Fair Value Measurements As of December 31, 2016 Securities owned at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 172,000 — — $ 172,000 Municipal bonds 930,000 — — 930,000 Restricted stock — 104,000 — 104,000 $ 1,102,000 $ 104,000 $ — $ 1,206,000 Securities sold, but not yet purchased at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 1,000 — — $ 1,000 As of September 30, 2016 Securities owned at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 101,000 — — $ 101,000 Municipal bonds 2,111,000 — — 2,111,000 Restricted stock — 145,000 — 145,000 $ 2,212,000 $ 145,000 $ — $ 2,357,000 Securities sold, but not yet purchased at fair value Level 1 Level 2 Level 3 Total Corporate stocks $ 298,000 $ — $ — $ 298,000 |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets as of December 31, 2016 and September 30, 2016 consist of the following: December 31, September 30, Estimated Useful Lives Equipment $ 1,155,000 $ 1,036,000 5 Furniture and fixtures 169,000 163,000 5 Leasehold improvements 692,000 653,000 Lesser of useful Capital leases (primarily composed of computer equipment) 739,000 739,000 5 2,755,000 2,591,000 Less accumulated depreciation and amortization (1,525,000 ) (1,427,000 ) Fixed assets – net $ 1,230,000 $ 1,164,000 |
BUSINESS COMBINATION AND CONT33
BUSINESS COMBINATION AND CONTINGENT CONSIDERATION (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, Contingent Consideration | Set below are changes in the carrying value of contingent consideration for the three-month period ended December 31, 2016 related to acquisitions: Fair value of contingent consideration at September 30, 2016 $ 424,000 Fair value of contingent consideration in connection with above acquisition 192,000 Payments — Change in fair value 7,000 Fair value of contingent consideration at December 31, 2016 $ 623,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite and Indefinite-lived Intangible Assets Acquired | Intangibles consisted of the following at December 31, 2016 and September 30, 2016 : December 31, 2016 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 7,180,000 $ 2,222,000 $ 4,958,000 3-10 Non-compete 296,000 296,000 — 2 Gilman brand name 760,000 — 760,000 Indefinite $ 8,236,000 $ 2,518,000 $ 5,718,000 September 30, 2016 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 6,969,000 $ 2,025,000 $ 4,944,000 7-10 Non-compete 296,000 296,000 — 2 Gilman brand name 760,000 — 760,000 Indefinite $ 8,025,000 $ 2,321,000 $ 5,704,000 |
Schedule of Estimated Future Amortization Expense | The estimated future amortization expense of the finite lived intangible assets for the next five fiscal years and thereafter is as follows: Year ending Nine months ending September 30, 2017 $ 595,000 2018 791,000 2019 791,000 2020 721,000 2021 721,000 Thereafter 1,339,000 Total $ 4,958,000 |
ACCOUNTS PAYABLE AND ACCRUED 35
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses as of December 31, 2016 and September 30, 2016 consist of the following: December 31, September 30, Legal $ 752,000 $ 1,346,000 Audit 263,000 198,000 Telecommunications 178,000 209,000 Data services 235,000 425,000 Regulatory 623,000 444,000 Settlements 421,000 832,000 Contingent consideration payable 623,000 424,000 Deferred rent 123,000 65,000 Other 1,995,000 3,223,000 Total $ 5,213,000 $ 7,166,000 |
PER SHARE DATA (Tables)
PER SHARE DATA (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Common Shares | A reconciliation of basic and diluted common shares used in the computation of per share data follows: Three Month Period Ended December 31, 2016 2015 Basic weighted-average shares 12,437,916 12,446,064 Effect of dilutive securities: Options 558 — Warrants — — Diluted weighted-average shares 12,438,474 12,446,064 |
Schedule of Potential Common Share Equivalents | The following potential common share equivalents are not included in the above diluted computation because to do so would be anti-dilutive: Three Month Period Ended December 31, 2016 2015 Options 1,202,000 1,354,500 Warrants 21,558 — 1,223,558 1,354,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments | The Company leases office space in various states expiring at various dates through October 2026, and as of December 31, 2016 , is committed under operating leases for future minimum lease payments as follows: Fiscal Year Ending Lease Payments Less, Sublease Income Net Nine months ending September 30, 2017 $ 2,230,000 $ 48,000 $ 2,182,000 2018 2,484,000 — 2,484,000 2019 1,814,000 — 1,814,000 2020 1,618,000 — 1,618,000 2021 1,308,000 — 1,308,000 Thereafter 2,322,000 — 2,322,000 $ 11,776,000 $ 48,000 $ 11,728,000 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | Information with respect to stock option activity during the three months ended December 31, 2016 follows: Options Weighted Weighted Weighted Aggregate Outstanding at September 30, 2016 1,221,500 $ 6.51 $ 1.22 3.31 $ — Forfeited (7,500 ) $ 3.80 $ 1.66 $ — Outstanding at December 31, 2016 1,214,000 $ 6.53 $ 1.22 3.06 $ — Vested and exercisable at December 31, 2016 1,214,000 $ 6.53 $ 1.22 3.06 $ — |
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table summarizes information about warrant activity during the three months ended December 31, 2016 (not including the warrants discussed in Note 18): Warrants Weighted Weighted Outstanding at September 30, 2016 23,029 $ 5.00 0.75 Forfeited or expired (1,471 ) $ 5.00 Outstanding and exercisable at December 31, 2016 21,558 $ 5.00 0.54 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information for the three months ended December 31, 2016 and 2015 is as follows: Brokerage and Tax and Corporate Total Three Months Ended December 31, 2016 Revenues $ 43,713,000 $ 856,000 $ — $ 44,569,000 Pre-tax income (loss) 3,096,000 (712,000 ) 3,354,000 (a) 5,738,000 Assets 41,543,000 1,911,000 13,933,000 (b) 57,387,000 Depreciation and amortization 158,000 48,000 89,000 295,000 Interest 4,000 — — 4,000 Capital expenditures 19,000 48,000 97,000 164,000 2015 Revenues $ 38,722,000 $ 900,000 $ — $ 39,622,000 Pre-tax income (loss) 1,023,000 (1,158,000 ) (509,000 ) (c) (644,000 ) Assets 40,716,000 2,929,000 18,160,000 (b) 61,805,000 Depreciation and amortization 199,000 45,000 56,000 300,000 Interest 1,000 — — 1,000 Capital expenditures 106,000 18,000 27,000 151,000 (a) Consists of fair value gain of warrants issuable offset by operating expenses not allocated to reportable segments. (b) Consists principally of deferred tax asset. (c) Consists of operating expenses not allocated to reportable segments. |
ACQUISITION OF CONTROLLING IN40
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY (Tables) | 3 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Such valuation (using level 2 inputs) was determined by use of the Black-Scholes option pricing model using the following assumptions: Fiscal Year 2017 Fiscal Year 2016 Dividend yield 0.00 % 0.00 % Expected volatility 38.24 % 38.20 % Risk-free interest rate 1.93 % 1.14 % Life (in years) 5 5 |
RECEIVEABLES FROM BROKER-DEAL41
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Brokers and Dealers [Abstract] | ||
Receivables from broker-dealers and clearing organizations | $ 2,858 | $ 3,357 |
Other receivables, net | 3,868 | 5,430 |
Allowance for doubtful accounts | $ 620 | $ 735 |
FORGIVABLE LOANS RECEIVABLE - N
FORGIVABLE LOANS RECEIVABLE - Narrative (Details) - USD ($) | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Forgiveness of loans balance | $ 201,000 | $ 141,000 | |
Loans Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | |
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest rate | 9.00% |
FORGIVABLE LOANS RECEIVABLE - F
FORGIVABLE LOANS RECEIVABLE - Forgivable Loan Activity (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Forgivable Loan Activity [Roll Forward] | |
Beginning balance | $ 5,430 |
Ending balance | 3,868 |
Advances to Registered Representatives | |
Forgivable Loan Activity [Roll Forward] | |
Beginning balance | 1,712 |
Additions | 17 |
Amortization | (201) |
Ending balance | $ 1,528 |
SECURITIES OWNED AND SECURITI44
SECURITIES OWNED AND SECURITIES SOLD, BUT NOT YET PURCHASED AT FAIR VALUE (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | $ 1,206 | $ 2,357 |
Level 1 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 1,102 | 2,212 |
Level 2 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 104 | 145 |
Level 3 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Corporate stocks | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 172 | 101 |
Securities sold, not yet purchased at fair value | 1 | 298 |
Corporate stocks | Level 1 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 172 | 101 |
Securities sold, not yet purchased at fair value | 1 | 298 |
Corporate stocks | Level 2 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Securities sold, not yet purchased at fair value | 0 | 0 |
Corporate stocks | Level 3 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Securities sold, not yet purchased at fair value | 0 | 0 |
Municipal bonds | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 930 | 2,111 |
Municipal bonds | Level 1 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 930 | 2,111 |
Municipal bonds | Level 2 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Municipal bonds | Level 3 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Restricted stock | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 104 | 145 |
Restricted stock | Level 1 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 0 | 0 |
Restricted stock | Level 2 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | 104 | 145 |
Restricted stock | Level 3 | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Securities owned at fair value | $ 0 | $ 0 |
FIXED ASSETS - Schedule of Fixe
FIXED ASSETS - Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 2,755 | $ 2,591 |
Less accumulated depreciation and amortization | (1,525) | (1,427) |
Fixed assets – net | 1,230 | 1,164 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 1,155 | 1,036 |
Estimated Useful Lives | 5 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 169 | 163 |
Estimated Useful Lives | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 692 | 653 |
Capital leases (primarily composed of computer equipment) | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $ 739 | $ 739 |
Estimated Useful Lives | 5 years |
FIXED ASSETS - Narrative (Detai
FIXED ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 98 | $ 107 |
BUSINESS COMBINATION AND CONT47
BUSINESS COMBINATION AND CONTINGENT CONSIDERATION - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Oct. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Payments to acquire business | $ 19,000 | $ 0 | ||
Contingent consideration liability | $ 623,000 | $ 424,000 | ||
Earn-out period, maximum revenue | $ 225,600 | |||
Estimated useful life | 3 years | |||
Certain Assets of a Tax Preparation and Accounting Business [Member] | ||||
Business Acquisition [Line Items] | ||||
Payments to acquire business | 19,000 | |||
Contingent consideration liability | $ 192,000 | |||
Earn-out period for which the contingent liability is derived | 36 months |
BUSINESS COMBINATION AND CONT48
BUSINESS COMBINATION AND CONTINGENT CONSIDERATION - Change in Contingent Consideration (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Contingent Consideration [Roll Forward] | |
Fair value of contingent consideration, beginning balance | $ 424 |
Fair value of contingent consideration in connection with above acquisition | 192 |
Payments | 0 |
Change in fair value | 7 |
Fair value of contingent consideration, ending balance | $ 623 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 8,236 | $ 8,025 |
Accumulated Amortization | 2,518 | 2,321 |
Carrying Value | $ 5,718 | 5,704 |
Estimated Useful Life (years) | 3 years | |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 7,180 | 6,969 |
Accumulated Amortization | 2,222 | 2,025 |
Carrying Value | $ 4,958 | $ 4,944 |
Customer relationships | Minimum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | 7 years |
Customer relationships | Maximum | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 10 years | 10 years |
Non-compete | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 296 | $ 296 |
Accumulated Amortization | 296 | 296 |
Carrying Value | $ 0 | $ 0 |
Estimated Useful Life (years) | 2 years | 2 years |
Gilman brand name | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 760 | $ 760 |
Carrying Value | $ 760 | $ 760 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 197 | $ 193 |
INTANGIBLE ASSETS - Intangibl51
INTANGIBLE ASSETS - Intangible Assets Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Year ending September 30, | ||
Carrying Value | $ 5,718 | $ 5,704 |
Gilman | ||
Year ending September 30, | ||
Nine months ending September 30, 2017 | 595 | |
2,018 | 791 | |
2,019 | 791 | |
2,020 | 721 | |
2,021 | 721 | |
Thereafter | 1,339 | |
Carrying Value | $ 4,958 |
ACCOUNTS PAYABLE AND ACCRUED 52
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Sep. 30, 2016 |
Payables and Accruals [Abstract] | ||
Legal | $ 752 | $ 1,346 |
Audit | 263 | 198 |
Telecommunications | 178 | 209 |
Data services | 235 | 425 |
Regulatory | 623 | 444 |
Settlements | 421 | 832 |
Contingent consideration payable | 623 | 424 |
Deferred rent | 123 | 65 |
Other | 1,995 | 3,223 |
Total | $ 5,213 | $ 7,166 |
PER SHARE DATA - Basic Net Loss
PER SHARE DATA - Basic Net Loss Per Share (Details) - shares | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic weighted-average shares (in shares) | 12,437,916 | 12,446,064 |
Diluted weighted-average shares (in shares) | 12,438,474 | 12,446,064 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Effect of dilutive securities (in shares) | 558 | 0 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Effect of dilutive securities (in shares) | 0 | 0 |
PER SHARE DATA - Anti-Dilutive
PER SHARE DATA - Anti-Dilutive Common Shares (Details) - shares | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,223,558 | 1,354,500 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 1,202,000 | 1,354,500 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 21,558 | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Lease Payments | |
Nine months ending September 30, 2017 | $ 2,230 |
2,018 | 2,484 |
2,019 | 1,814 |
2,020 | 1,618 |
2,021 | 1,308 |
Thereafter | 2,322 |
Total | 11,776 |
Less, Sublease Income | |
Nine months ending September 30, 2017 | 48 |
2,018 | 0 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total | 48 |
Net | |
Nine months ending September 30, 2017 | 2,182 |
2,018 | 2,484 |
2,019 | 1,814 |
2,020 | 1,618 |
2,021 | 1,308 |
Thereafter | 2,322 |
Total | $ 11,728 |
COMMITMENTS AND CONTINGENCIES56
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | ||
Dec. 31, 2016USD ($)Letter_of_credit | Dec. 31, 2015USD ($) | Sep. 30, 2016USD ($) | |
Loss Contingencies [Line Items] | |||
Rent expense | $ 995,000 | $ 956,000 | |
Sublease income | 37,000 | 36,000 | |
Pending Litigation | Professional Fees | |||
Loss Contingencies [Line Items] | |||
Legal fees | $ 546,000 | $ 225,000 | |
Letter of Credit | |||
Loss Contingencies [Line Items] | |||
Number of letters of credit, outstanding | Letter_of_credit | 3 | ||
Maximum borrowing capacity | $ 354,000 | ||
Accounts Payable and Other Liabilities | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Estimate of possible loss | $ 421,000 | $ 832,000 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details) | Dec. 31, 2016USD ($) |
National Securities | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Net capital | $ 8,562,434 |
Alternative excess net capital | 8,312,434 |
National Securities | SEC Requirement | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum net capital required | 250,000 |
vFinance Investments | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Net capital | 2,319,352 |
Alternative excess net capital | $ 1,319,352 |
Ratio of indebtedness to net capital | 0.7 |
vFinance Investments | Maximum | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Ratio of indebtedness to net capital | 15 |
vFinance Investments | SEC Requirement | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum net capital required | $ 1,000,000 |
STOCK BASED COMPENSATION - Stoc
STOCK BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Options | ||
Beginning balance (in shares) | 1,221,500 | |
Forfeited (in shares) | (7,500) | |
Ending balance (in shares) | 1,214,000 | 1,221,500 |
Vested and exercisable balance (in shares) | 1,214,000 | |
Weighted Average Exercise Price Per Share | ||
Beginning balance (in dollars per share) | $ 6.51 | |
Forfeited (in dollars per share) | 3.80 | |
Ending balance (in dollars per share) | 6.53 | $ 6.51 |
Vested and exercisable balance (in dollars per share) | 6.53 | |
Weighted Average Grant- Date Fair Value Per Share | ||
Beginning balance (in dollars per share) | 1.22 | 1.22 |
Forfeited (in dollars per share) | 1.66 | |
Ending balance (in dollars per share) | 1.22 | $ 1.22 |
Vested and exercisable balance (in dollars per share) | $ 1.22 | |
Weighted Average Remaining Contractual term (years) | ||
Balance outstanding | 3 years 22 days | 3 years 3 months 22 days |
Forfeited | ||
Vested and exercisable balance | 3 years 22 days | |
Aggregate Intrinsic Value | ||
Balance outstanding | $ 0 | $ 0 |
Forfeited | 0 | |
Vested and exercisable balance | $ 0 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2015USD ($) | |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation expense | $ 37 |
STOCK BASED COMPENSATION STOCK
STOCK BASED COMPENSATION STOCK BASED COMPENSATION - Warrant Activity (Details) - Warrants - $ / shares | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Warrants | ||
Beginning balance (in shares) | 23,029 | |
Forfeited or expired (in shares) | (1,471) | |
Ending balance (in shares) | 21,558 | 23,029 |
Weighted Average Exercise Price Per Share | ||
Balance (in dollars per share) | $ 5 | $ 5 |
Forfeited or expired (in dollars per share) | $ 5 | |
Weighted Average Remaining Contractual Term | ||
Balance outstanding | 6 months 15 days | 9 months |
SHARE REPURCHASE (Details)
SHARE REPURCHASE (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Aug. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||
Authorized amount of repurchase plan (up to) | $ 2,000,000 | |
Number of shares repurchased (in shares) | 33,933 | |
Value of shares repurchased | $ 86,000 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 3 Months Ended |
Dec. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 44,569 | $ 39,622 | |
Pre-tax income (loss) | 5,738 | (644) | |
Assets | 57,387 | 61,805 | $ 60,546 |
Depreciation and amortization | 295 | 300 | |
Interest | 4 | 1 | |
Capital expenditures | 164 | 151 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Revenues | 0 | 0 | |
Pre-tax income (loss) | 3,354 | (509) | |
Assets | 13,933 | 18,160 | |
Depreciation and amortization | 89 | 56 | |
Interest | 0 | 0 | |
Capital expenditures | 97 | 27 | |
Brokerage and Advisory Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 43,713 | 38,722 | |
Pre-tax income (loss) | 3,096 | 1,023 | |
Assets | 41,543 | 40,716 | |
Depreciation and amortization | 158 | 199 | |
Interest | 4 | 1 | |
Capital expenditures | 19 | 106 | |
Tax and Accounting Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues | 856 | 900 | |
Pre-tax income (loss) | (712) | (1,158) | |
Assets | 1,911 | 2,929 | |
Depreciation and amortization | 48 | 45 | |
Interest | 0 | 0 | |
Capital expenditures | $ 48 | $ 18 |
ACQUISITION OF CONTROLLING IN64
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY (Details) - FBIO Acquisitions Inc. - $ / shares | Sep. 12, 2016 | Dec. 31, 2016 | Sep. 30, 2016 |
National Holdings Corp | |||
Business Acquisition [Line Items] | |||
Percentage of stock owned by aquiree required to become a privately held company, minimum | 80.00% | ||
Common Stock | |||
Business Acquisition [Line Items] | |||
Warrant, term of contract | 5 years | ||
Exercise price of warrants (in dollars per share) | $ 3.25 | ||
Warrants issuable (in shares) | 12,437,916 | 12,437,916 | |
Common Stock | National Holdings Corp | |||
Business Acquisition [Line Items] | |||
Share price for acquisition (in dollars per share) | $ 3.25 | ||
Number of shares tendered | 7,037,482 | ||
Percentage of voting interests acquired | 56.60% |
ACQUISITION OF CONTROLLING IN65
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY - Valuation Assumptions (Details) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 38.24% | 38.20% |
Risk-free interest rate | 1.93% | 1.14% |
Life (in years) | 5 years | 5 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Related Party Transactions [Abstract] | |
Placement agent fees | $ 2,665 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Variable Interest Entities | ||
Variable Interest Entity [Line Items] | ||
Investment banking and advisory fee revenue | $ 3.1 | $ 2.7 |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - shares | Jan. 26, 2017 | Jan. 25, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Subsequent Event [Line Items] | ||||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Common stock, shares authorized (in shares) | 75,000,000 | 150,000,000 | ||
2013 Omnibus Incentive Plan [Member] | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Increase in number of shares authorized for incentive plan | 650,000 |