Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Sep. 14, 2020 | Dec. 31, 2019 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Jun. 30, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | CCUR Holdings, Inc. | ||
Entity Central Index Key | 0000749038 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 22,432,463 | ||
Trading Symbol | CCUR | ||
Entity Common Stock, Shares Outstanding | 9,001,862 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 9,336 | $ 8,083 |
Equity Securities, Fair Value | 7,372 | 7,405 |
Fixed maturity securities, available-for-sale, fair value | 21,429 | 20,393 |
Current maturities of mortgage and commercial loans receivable | 3,878 | 3,184 |
Advances receivable, net | 11,436 | 9,389 |
Prepaid expenses and other current assets | 1,204 | 1,779 |
Total current assets | 54,655 | 50,233 |
Land investment | 3,568 | 3,265 |
Deferred income taxes, net | 6,632 | 475 |
Mortgage and commercial loans receivable, net of current maturities | 1,695 | 3,680 |
Definite-lived intangibles, net | 1,870 | 2,910 |
Goodwill | 480 | 1,260 |
Other long-term assets, net | 950 | 651 |
Total assets | 69,850 | 62,474 |
Current liabilities: | ||
Accounts payable and accrued expenses | 803 | 660 |
Management fee payable | 2,841 | 0 |
Contingent consideration, current | 0 | 750 |
Total current liabilities | 3,644 | 1,410 |
Long-term liabilities: | ||
Pension liability | 4,005 | 4,136 |
Contingent consideration, long-term | 0 | 2,340 |
Long-term debt | 0 | 1,600 |
Other long-term liabilities | 912 | 632 |
Total liabilities | 8,561 | 10,118 |
Commitments and contingencies (Note 17) | ||
Stockholders' equity: | ||
Shares of common stock, par value $0.01; 14,000,000 authorized; 8,797,671 and 8,756,156 issued and outstanding at June 30, 2020, and June 30, 2019, respectively | 88 | 87 |
Capital in excess of par value | 209,223 | 208,881 |
Non-controlling interest | 1,261 | 762 |
Accumulated deficit | (143,077) | (150,795) |
Accumulated other comprehensive loss | (6,206) | (6,579) |
Total stockholders' equity | 61,289 | 52,356 |
Total liabilities, non-controlling interest, and stockholders' equity | 69,850 | 62,474 |
Series Preferred Stock [Member] | ||
Stockholders' equity: | ||
Shares of Preferred stock | 0 | 0 |
Preferred Class A [Member] | ||
Stockholders' equity: | ||
Shares of Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 14,000,000 | 14,000,000 |
Common Stock, Shares, Issued | 8,797,671 | 8,756,156 |
Common Stock, Shares, Outstanding | 8,791,671 | 8,756,156 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Series Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 1,250,000 | 1,250,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Class A [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 100 | $ 100 |
Preferred Stock, Shares Authorized | 20,000 | 20,000 |
Preferred Stock, Shares Issued | 0 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||
Merchant cash advance fees and other revenue | $ 4,682 | $ 2,480 |
Interest on mortgage and commercial loans | 1,191 | 976 |
Total revenues | 5,873 | 3,456 |
Operating expenses: | ||
Selling, general, and administrative | 7,731 | 3,699 |
Amortization of purchased intangibles | 479 | 179 |
Impairment of goodwill and long-lived assets | 1,395 | 0 |
Change in fair value of contingent consideration | (3,090) | 730 |
Provision for credit losses on advances | 849 | 1,605 |
Total operating expenses | 7,364 | 6,213 |
Operating loss | (1,491) | (2,757) |
Other interest income | 7,004 | 4,416 |
Realized gain on investments, net | 2,252 | 467 |
Unrealized loss on equity securities, net | (785) | (1,785) |
Other income, net | 19 | 249 |
Income before income taxes | 6,999 | 590 |
(Benefit) Provision for income taxes | (6,030) | 40 |
Net income | 13,029 | 550 |
Less: Net (income) loss attributable to non-controlling interest | (799) | 131 |
Net income attributable to CCUR Holdings, Inc. stockholders | $ 12,230 | $ 681 |
Earnings per share attributable to CCUR Holdings. Inc. stockholders: | ||
Basic | $ 1.39 | $ 0.08 |
Diluted | $ 1.38 | $ 0.08 |
Weighted average shares outstanding - basic | 8,772,969 | 8,941,413 |
Weighted average shares outstanding - diluted | 8,832,519 | 8,958,462 |
Cash dividends declared per common share | $ 0.50 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income | $ 13,029 | $ 550 |
Other comprehensive income (loss): | ||
Net unrealized income (loss) on available for sale investments, net of tax | 156 | (3,677) |
Adoption of ASU 2016-01 | 0 | (318) |
Foreign currency translation adjustment | 27 | 64 |
Pension and post-retirement benefits | 190 | (335) |
Other comprehensive income (loss): | 373 | (4,266) |
Comprehensive income (loss) | 13,402 | (3,716) |
Comprehensive (income) loss attributable to non-controlling interest | (799) | 131 |
Comprehensive income (loss) attributable to CCUR Holdings, Inc. stockholders | $ 12,603 | $ (3,585) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Capital In Excess Of Par Value [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Non-Controlling Interest [Member] | Total |
Balance at Jun. 30, 2018 | $ 91 | $ 210,083 | $ (151,795) | $ (2,313) | $ 56,066 | |
Balance (in shares) at Jun. 30, 2018 | 9,117,077 | |||||
Dividends forfeited with restricted stock forfeitures | 1 | 1 | ||||
Adoption of ASU 2016-01 | 318 | 318 | ||||
Share-based compensation expense | 231 | 231 | ||||
Repurchase and retirement of common stock | $ (4) | (1,433) | (1,437) | |||
Repurchase and retirement of common stock (in shares) | (378,421) | |||||
Lapse of restrictions on restricted stock | $ 0 | 0 | ||||
Lapse of restrictions on restricted stock (in shares) | 17,500 | |||||
Acquisition of non-controlling interest | $ 893 | 893 | ||||
Other comprehensive loss, net of taxes: | ||||||
Net income (loss) | 681 | (131) | 550 | |||
Unrealized gain (loss) on available-for-sale investments | (3,677) | (3,677) | ||||
Adoption of ASU 2016-01 | (318) | (318) | ||||
Foreign currency translation adjustment | 64 | 64 | ||||
Pension plan | (335) | (335) | ||||
Total comprehensive income (loss) | (3,716) | |||||
Balance at Jun. 30, 2019 | $ 87 | 208,881 | (150,795) | (6,579) | 762 | 52,356 |
Balance (in shares) at Jun. 30, 2019 | 8,756,156 | |||||
Share-based compensation expense | 411 | 411 | ||||
Repurchase and retirement of common stock | (68) | (68) | ||||
Repurchase and retirement of common stock (in shares) | (16,821) | |||||
Lapse of restrictions on restricted stock | $ 1 | (1) | ||||
Lapse of restrictions on restricted stock (in shares) | 58,336 | |||||
Distributions to non-controlling interest | (300) | (300) | ||||
Dividends | (4,512) | (4,512) | ||||
Other comprehensive loss, net of taxes: | ||||||
Net income (loss) | 12,230 | 799 | 13,029 | |||
Unrealized gain (loss) on available-for-sale investments | 156 | 156 | ||||
Foreign currency translation adjustment | 27 | 27 | ||||
Pension plan | 190 | 190 | ||||
Total comprehensive income (loss) | 13,402 | |||||
Balance at Jun. 30, 2020 | $ 88 | $ 209,223 | $ (143,077) | $ (6,206) | $ 1,261 | $ 61,289 |
Balance (in shares) at Jun. 30, 2020 | 8,797,671 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows provided by operating activities: | ||
Net income | $ 13,029 | $ 550 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 496 | 182 |
Share-based compensation | 411 | 231 |
Provision for credit losses on advances | 849 | 1,605 |
Deferred taxes | (6,681) | |
Non-cash accretion of interest income | (3,709) | (1,679) |
Payment-in-kind interest income | (970) | (864) |
Realized gain on investments, net | (2,252) | (467) |
Unrealized loss on investments, net | 785 | 1,785 |
Change in fair value of contingent consideration | (3,090) | 730 |
Goodwill and long-lived asset impairment | 1,395 | 0 |
Other non-cash adjustments | 20 | 0 |
(Increase) decrease in assets: | ||
Prepaid expenses and other current assets | 416 | 182 |
Other long-term assets | 123 | 13 |
(Decrease) increase in liabilities: | ||
Accounts payable and accrued expenses | 2,902 | (690) |
Pension and other long-term liabilities | (134) | 204 |
Net cash provided by operating activities | 3,590 | 1,782 |
Cash flows provided by (used in) investing activities: | ||
Additions to land investment | (303) | (3,265) |
Additions to property and equipment | (23) | (7) |
Origination and fundings of mortgage and commercial loans receivable | (2,825) | (8,333) |
Collections of mortgage and commercial loans receivable | 4,154 | 5,793 |
Fundings of cash advances receivable | (27,496) | (22,869) |
Collections of cash advances receivable | 25,179 | 11,818 |
Acquisition of LuxeMark Capital, LLC | 0 | (1,212) |
Proceeds from sale or maturity of securities | 17,348 | 12,020 |
Purchases of securities | (12,009) | (22,231) |
Proceeds from sale of Content Delivery business, net of cash transferred | 1,450 | |
Net cash provided by (used in) investing activities | 4,025 | (26,836) |
Cash flows (used in) provided by financing activities: | ||
Repayment of debt financing | (1,600) | |
Proceeds from debt financing | 0 | 1,600 |
Member distributions | (300) | |
Purchase of common stock for retirement | (68) | (1,437) |
Dividends paid | (4,411) | (1) |
Net cash (used in) provided by financing activities | (6,379) | 162 |
Effect of exchange rates on cash and cash equivalents | 17 | (17) |
Increase (decrease) in cash and cash equivalents | 1,253 | (24,909) |
Cash and cash equivalents - beginning of year | 8,083 | 32,992 |
Cash and cash equivalents - end of year | 9,336 | 8,083 |
Cash paid (received) during the year for: | ||
Interest | 53 | 4 |
Income taxes, net of refunds | (7) | 112 |
Supplemental disclosures of non-cash activities: | ||
Right-of-use assets obtained in exchange for operating lease liabilities | $ 391 | $ 549 |
Overview of the Business and Ba
Overview of the Business and Basis of Presentation | 12 Months Ended |
Jun. 30, 2020 | |
Overview of the Business and Basis of Presentation | |
Overview of the Business and Basis of Presentation | 1. Overview of the Business and Basis of Presentation References herein to “CCUR Holdings,” the “Company,” “we,” “us,” or “our” refer to CCUR Holdings, Inc. and its subsidiaries on a consolidated basis, unless the context specifically indicates otherwise. We are a holding company owning and seeking to own subsidiaries engaged in a variety of business operations. Following the disposition of our legacy operating businesses in calendar year 2017, we began identifying business alternatives to redeploy the proceeds of such divestitures. As of June 30, 2020, we had two existing operating segments: (i) merchant cash advance ("MCA") operations, conducted primarily through our subsidiary LM Capital Solutions, LLC (d/b/a "LuxeMark Capital") ("LMCS"), and (ii) real estate operations, conducted through our subsidiary Recur Holdings LLC ("Recur") and its subsidiaries. As of June 30, 2020, we hold an 80% interest in LMCS, with the remaining 20% held by AZOKKB, LLC (formerly named LuxeMark Capital, LLC and herein referenced as "Old LuxeMark"). Through LMCS, we manage a network of MCA originators and syndicate participants who provide those originators with capital by purchasing participation interests in or co-funding MCA transactions. In addition, we provide loans to MCA originators, the proceeds of which are used by the MCA originators to fund MCAs. LMCS' daily operations are led by the three principals of Old LuxeMark. CCUR provides operational, accounting, and legal support to LMCS. On July 17, 2020, we entered into a series of agreements with Old LuxeMark pursuant to which our interest in LMCS was reduced from 80% to 51%. After the repayment of the outstanding balance of a master promissory note issued by LMCS to the Company, Old LuxeMark has the right to purchase the remaining 51% equity interest in LMCS for nominal consideration. We are reviewing our strategic options with respect to continued participation in the MCA industry. Recur provides commercial loans to local, regional, and national builders, developers, and commercial landowners and also acquires, owns, and manages a portfolio of real property for development. Recur does not provide consumer mortgages. The global outbreak of the novel coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020 and has negatively impacted the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to "shelter-in-place," and created significant disruption of the financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain and cannot be predicted. During the third quarter of our fiscal year 2020, the Company declared and paid a one-time dividend of $0.50 per share. We paid $4,411,000 of cash dividends during the fiscal year. Smaller Reporting Company We meet the Securities and Exchange Commission's (the "SEC’s") definition of a “Smaller Reporting Company,” and therefore qualify for the SEC’s reduced disclosure requirements for smaller reporting companies. Principles of Consolidation and Reclassifications The consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net income, assets, liabilities, stockholders’ deficit, or net operating, investing, or financing cash flows. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Business Combinations The Company accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The Company allocates the purchase price of the acquisition to the tangible assets acquired, liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred. During the measurement period, the Company records adjustments to provisional amounts recorded for assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company's consolidated statements of operations. The Company recognizes the fair value of contingent consideration as of the acquisition date as part of the consideration transferred in exchange for an acquired business. The fair value of the contingent consideration is recorded as a liability and remeasured each accounting period, with any resulting change being recorded as an operating income or loss item within the statement of operations. Foreign Currency The functional currency of all our foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using average rates of exchange prevailing during the fiscal year. Adjustments resulting from the translation of foreign currency financial statements are accumulated in a separate component of stockholders’ equity. Gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations, except for those relating to intercompany transactions of a long-term investment nature, which are accumulated in a separate component of stockholders’ equity. Cash and Cash Equivalents Cash balances and short-term investments with original maturities of 90 days or less at the date of purchase are considered cash equivalents. Cash equivalents are stated at fair value, and represent cash and cash invested in money market funds and commercial paper. Concentration of Credit Risk Financial instruments that subject the Company to a concentration of credit risk include cash and cash equivalents on deposit that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Concentration of credit risk consists of cash and cash equivalents maintained in financial institutions that are, in part, in excess of the FDIC limits. At times, the Company may hold cash balances in excess of the FDIC insurance limits. Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of the net assets of businesses acquired. We review goodwill at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment that requires management judgment and the use of estimates to determine if it is more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount. An entity has an unconditional option to bypass the qualitative assessment for any reporting unit and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. We perform our annual impairment tests as of December 31 of each year, unless circumstances indicate the need to accelerate the timing of the tests. We completed our annual impairment test of goodwill as of December 31, 2019 and concluded that there was no impairment. Intangible assets include trade name, non-competition agreements, and syndicate participant/originator relationships, are subject to amortization over their respective useful lives, and are classified in definite-lived intangibles, net, in the accompanying consolidated balance sheets. These intangibles are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be fully recoverable. If facts and circumstances indicate that the carrying value might not be recoverable, projected undiscounted net cash flows associated with the related assets or groups of assets over their estimated remaining useful lives is compared against their respective carrying amounts. If an asset is found to be impaired, the impairment charge will be measured as the amount by which the carrying amount of an asset exceeds its fair value. Subsequent to completion of our annual goodwill impairment analysis, the COVID-19 virus developed into a pandemic that significantly impacted the global economy. Our MCA segment experienced a decline in revenues during the last quarter of our fiscal year ended June 30, 2020, which management believes is predominantly due to the economic uncertainties caused by the pandemic, and we anticipate our MCA revenues will continue to be adversely affected while major parts of the U.S. economy are restricted by mandatory business shut-downs and/or stay-at-home orders, as well as other effects of the pandemic. We decreased our volume of new funding arrangements while evaluating the effect of the current economic uncertainties on the MCA business and its customers during the third quarter of our fiscal year 2020. During the fourth quarter of our fiscal year 2020, management concluded that it would not resume funding MCAs with MCA originators and would focus our MCA segment exclusively on MCA syndication fee income generated by our LMCS business unit and funding aviation purchase deposits for fees. Our reduced participation in MCA funding through originators reduces our syndication fee income and revenue from direct funding of MCAs. We anticipate continued lower funding of new MCAs and reduced collection volume on outstanding MCAs until the economic situation caused by the pandemic stabilizes and a greater level of economic activity returns. The economic impact of the ongoing pandemic on the LMCS business and our decision to not provide additional resources to LMCS to fund MCAs through MCA originators in the future triggered the requirement for a quantitative impairment test of the goodwill and long-lived assets attributable to our LMCS business unit during the fourth quarter of our fiscal year ended June 30, 2020. As a result of the impairment tests, we concluded that the goodwill, definite-lived intangible assets, and right-of-use lease assets attributable to our LMCS business unit were impaired as of June 30, 2020. See Note 6 for further discussion. Investments in Debt and Equity Securities We determine the appropriate classification of investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short-term or long-term in the consolidated balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity. Premiums and discounts on fixed maturity securities are amortized using the effective interest method. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Dividends on equity securities are recognized when declared. When the Company sells a security, the difference between the sale proceeds and amortized cost (determined based on specific identification) is reported as a realized investment gain or loss. When a decline in the value of a specific investment is other than temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on investments) and the cost basis of that investment is reduced. If the Company can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings), and (ii) the amount related to all other factors (recorded in accumulated other comprehensive income, or “AOCI”). The credit-related portion of any other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. If the Company intends to sell an impaired security, or if it is more likely than not that the Company will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. In some cases, our debt investments may provide for a portion of the interest payable to be payment-in-kind (“PIK”) interest. To the extent interest is PIK, it is payable through the increase of the principal amount of the loan by the amount of the interest due on the then-outstanding principal amount of the loan. Commercial and Mortgage Loans and Loan Losses We have potential exposure to transaction losses as a result of uncollectibility of commercial mortgage and other loans. We base our reserve estimates on prior charge-off history and currently available information that is indicative of a transaction loss. We reflect additions to the reserve in current operating results, while we make charges to the reserve when we incur losses. We reflect recoveries in the reserve for transaction losses as collected. We have the intent and ability to hold these loans to maturity or payoff, and as such, have classified these loans as held-for-investment. These loans are reported on the balance sheet at the outstanding principal balance adjusted for any charge-offs, allowance for loan losses, and deferred fees or costs. As of June 30, 2020, we have not recorded any charge-offs, and believe that an allowance for loan losses is not required. Advances Receivable In December 2018, we began purchasing participation interests in MCAs from third parties whose principal activity is originating MCAs to small businesses. MCAs are contracts formed through future receivables purchase and sale agreements, which stipulate the purchase price, or the amount advanced, and the specified amount, or the advance amount plus the factored receivable balance that will be repaid, on the face of the contract. Generally, a specified amount will be withdrawn from the merchant's bank account via daily or weekly automatic transactions in order to pay down the merchant's advance. These are not consumer loan contracts, nor are they installment loan contracts to businesses for business use only. In addition, there is no monthly minimum payment, nor is there a specific repayment schedule. Allowance for MCA credit losses We establish an allowance for credit losses for MCAs at the time of funding through a provision for losses charged to our consolidated statement of operations. The provision amount is based on an analysis of our charge-off history and historical performance experienced by an industry peer group. Losses are charged against the allowance when management believes that the future collection in full of purchased receivables is unlikely. We review our MCA receivables on a regular basis and charge off any MCA receivables for which the merchant has not made a payment in 90 days or more. Subsequent recoveries, if any, are credited to the provision for credit losses on advances. The establishment of appropriate reserves is an inherently uncertain process, and ultimate losses may vary from the current estimates. We regularly update our reserve estimates as new facts become known and events occur that may affect the settlement or recovery of losses. In addition, new facts and circumstances may adversely affect our MCA portfolio resulting in increased delinquencies and losses and could require additional provisions for credit losses, which could impact future periods. Revenue Recognition for MCA Syndication Fee Income We recognize revenue when our performance obligations with our customers have been satisfied. Our performance obligation is to facilitate funding for MCA originators through the LuxeMark Capital syndication network.The performance obligation is satisfied at a point in time when the syndicate participants provide MCA originators with capital by purchasing participation interests in funded MCAs. We determine the transaction price based on the fixed consideration in our contractual agreements, which do not contain any variable consideration. As we have identified only one distinct performance obligation, the transaction price is allocated entirely to this service. In determining the transaction price, a significant financing component does not exist, since the timing from when we perform this service to when the syndicate participants fund the MCA is less than one year, and we are not paid in advance for the performance of our services. We recognized $1,288,000 and $693,000 of syndication fee income during the fiscal years ended June 30, 2020 and 2019, respectively, which is included in MCA fees and other revenue on the accompanying consolidated statement of operations. Revenue Recognition - Advance Income We earn MCA income based on the amount advanced multiplied by the factor rate, net of any commissions or fees related to the participation. The factor rate is stipulated in the funding agreement, which is an agreement between the funder and the merchant. As repayments on the advances are received from the merchants, we apply a portion of the cash payment against the advanced amount, and the remaining portion of the cash payment is recognized as MCA income. We will cease recognizing MCA income when, in our opinion, the advanced amount is not probable of being collected. Revenue Recognition - Interest Income Interest income is earned on commercial mortgages and other loans based on the contractual terms of the loan. We evaluate loans for non-accrual status each reporting period. A loan is placed on a non-accrual status at the earlier of the date when the loan payment deficiencies exceed 90 days or when, in our opinion, the collection of interest in full becomes doubtful. Interest income recognition for non-accrual loans is generally resumed when the non-accrual loan is making current contractual interest payments. Loan origination fees are deferred and amortized to interest income, using the effective interest method, over the contractual life of the loan, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 310, Receivables. Land Investment Land investment assets are stated at acquired cost. Pre-acquisition and development costs are capitalized. Gains and losses resulting from the disposition of real estate are included in operations. As of June 30, 2020, all land held by the Company is considered to be held for use and development. Defined-Benefit Pension Plan We maintain defined-benefit pension plans (the “Pension Plans”) for a number of former employees (“participants”) of our German subsidiary. In 1998, the Pension Plans were closed to new employees, and no existing employees are eligible to participate, as all eligible participants are no longer employed by us. The Pension Plans provide benefits to be paid to all participants at retirement based primarily on years of service with the Company. Our policy is to fund benefits attributed to participants’ service to date. The determination of our Pension Plans’ benefit obligations and expenses is dependent on our selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions include, among others, the weighted-average discount rate and the weighted-average expected rate of return on plan assets. To the extent that these assumptions change, our future benefit obligation and net periodic pension expense may be positively or negatively impacted. Basic and Diluted Earnings per Share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during each fiscal period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during each fiscal period including dilutive common share equivalents. Under the treasury stock method, incremental shares representing the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued are included in the computation. Weighted-average common share equivalents of 8,123 and 10,004 for the fiscal years ended June 30, 2020 and 2019, respectively, were excluded from the calculation, as their effect would have been anti-dilutive. The following table presents a reconciliation of the numerators and denominators of basic and diluted net income per share for the periods indicated: Fiscal Year Ended June 30, 2020 2019 Basic weighted-average number of shares outstanding 8,772,969 8,941,413 Effect of dilutive securities: Restricted stock 59,550 17,049 Diluted weighted-average number of shares outstanding 8,832,519 8,958,462 Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which transactions would occur and we consider assumptions that market participants would use when pricing the asset or liability. ASC Topic 820, Fair Value Measurements and Disclosurs requires certain disclosures regarding fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which are determined by the lowest level input that is significant to the fair value measurement in its entirety. The levels are: · Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; · Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and · Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which include the use of management estimates. Our investment portfolio consists of money market funds, equity securities, mortgage loans, and corporate debt. All highly liquid investments with an original maturity of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months are classified as available-for-sale, trading, or held-to-maturity investments. Our marketable securities, other than equity securities, are classified as available-for-sale, and are reported at fair value, with unrealized gains and losses, net of tax, reported in stockholders’ equity as a component of accumulated other comprehensive income or loss. Interest on securities is reported in the accompanying consolidated statements of operations in interest income. Dividends paid by securities are reported in the accompanying consolidated statements of operations in other income. Realized gains or losses are reported in the accompanying consolidated statements of operations in net realized gain on investments. We used Level 3 inputs to determine the fair value of our preferred stock investments. The Company has elected the measurement alternative and will record the investments at cost adjusted for observable price changes for an identical or similar investment of the same issuer. Observable price changes and impairment indicators will be assessed each reporting period. We also used Level 3 inputs to determine the fair value of our contingent consideration and common stock purchase warrants related to our acquisition of the assets of Old LuxeMark (the “LuxeMark Acquisition”). The Company used a Monte Carlo simulation technique to value the performance-based contingent consideration and common stock purchase warrants. This technique is a probabilistic model which relies on repeated random sampling to obtain numerical results. We reduced the fair value of contingent consideration related to the LuxeMark Acquisition to zero as of June 30, 2020 as we reduced our funding of MCAs and the contingent consideration agreements and warrants were terminated on July 17, 2020. We provide fair value measurement disclosures of our available-for-sale securities in accordance with one of the three levels of fair value measurement. Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2020 and 2019 are as follows: Quoted As of Prices in Observable Unobservable June 30, 2020 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 4,473 $ 4,473 $ — $ — Money market funds 4,863 4,863 — — Cash and cash equivalents $ 9,336 $ 9,336 $ — $ — Common stock and common stock options $ 4,489 $ 4,489 $ — $ — Preferred stock 2,883 — — 2,883 Equity investments $ 7,372 $ 4,489 $ — $ 2,883 Corporate debt $ 21,429 $ — $ 21,429 $ — Available-for-sale investments $ 21,429 $ — $ 21,429 $ — Quoted As of Prices in Observable Unobservable June 30, 2019 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 5,223 $ 5,223 $ — $ — Money market funds 2,860 2,860 — — Cash and cash equivalents $ 8,083 $ 8,083 $ — $ — Common stock and common stock warrants 4,522 4,522 — — Preferred stock 2,883 — — 2,883 Equity investments $ 7,405 $ 4,522 $ — $ 2,883 Corporate debt $ 20,393 $ — $ 20,393 $ — Available-for-sale investments $ 20,393 $ — $ 20,393 $ — Contingent consideration - cash earn-out $ 2,890 $ — $ — $ 2,890 Contingent consideration - warrants 200 — — 200 Liabilities $ 3,090 $ — $ — $ 3,090 The carrying amounts of certain financial instruments, including cash equivalents and MCAs, approximate their fair values due to their short-term nature. Included in available for sale securities is a loan which we purchased from, and for which quotations are available on, the syndicated loan market. The fair value of our syndicated portion of this loan is $3,240,000 and $1,663,000 as of June 30, 2020 and 2019, respectively. The following table provides a reconciliation of the beginning and ending balances for the Company’s assets and obligations measured at fair value using Level 3 inputs: Assets Obligations Preferred Contingent Stock Consideration (Amounts in thousands) Balance at June 30, 2019 $ 2,883 $ 3,090 Fair value adjustment to contingent consideration (Note 6) — (3,090) Balance at June 30, 2020 $ 2,883 $ — The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable LMCS Business Unit Contingent cash payments $ — Monte Carlo simulations discount rate 10.5 % expected volatility 25.0 % drift rate 0.2 % credit spread 7.0 % Contingent warrants $ — Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 25.0 % risk free rate 0.4 % dividend yield 0.0 % The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable Contingent consideration Contingent cash payments $ 2,890 Monte Carlo simulations discount rate 12.0 % expected volatility 25.0 % drift rate 1.7 % credit spread 8.0 % Contingent warrants $ 200 Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 30.0 % risk free rate 2.6 % dividend yield 0.0 % As further described in Note 6 to these financial statements, we recorded impairment charges of $780,000 and $562,000 against the goodwill and definite-lived assets of our LMCS business unit, respectively, and also reduced the fair value of this business unit’s contingent cash payments and contingent warrants payable to Old LuxeMark from $3,090,000 to zero during our fiscal year ended June 30, 2020. The following table shows the valuation methodology for Level3 assets and liabilities measured at fair value as of June 30, 2020 ($ amounts in thousands): Fair Unobservable Range of Value Valuation Methodology Inputs Inputs LMCS Business Unit Goodwill $ 480 Discounted cash flows Weighted average cost of capital 27.0 % Investor/funder relationships $ 1,640 Multi-period excess earnings Discount rate 28.0 % Right of use leased asset $ 320 Discounted cash flows Discount rate 8.5 % Trade name $ 130 Relief from royalty Royalty rate 1.5 % Non-compete agreements $ 100 Discounted cash flows Discount rate 28.0 % Income Taxes The Company and its domestic subsidiaries file a consolidated federal income tax return. All foreign subsidiaries file individual or consolidated tax returns pursuant to local tax laws. We follow the asset and liability method of accounting for income taxes. Under the asset and liability method, a deferred tax asset or liability is recognized for temporary differences between financial reporting and income tax basis of assets and liabilities, tax credit carryforwards, and operating loss carryforwards. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that such deferred tax assets will not be realized. Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718‑10, Stock Compensation (“ASC 718‑10”), which requires the recognition of the fair value of stock compensation in the statement of operations. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. All our stock compensation is accounted for as equity instruments. Refer to Note 10 to the consolidated financial statements for assumptions used in calculation of fair value. Comprehensive Income Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive income is defined as a change in equity during the financial reporting period of a business enterprise resulting from non-owner sources. Components of accumulated other comprehensive income are disclosed in the accompanying consolidated statements of comprehensive income (loss). |
Recent Accounting Guidance
Recent Accounting Guidance | 12 Months Ended |
Jun. 30, 2020 | |
Recent Accounting Guidance | |
Recent Accounting Guidance | 2. Recent Accounting Guidance Recently Issued and Adopted Accounting Guidance In January 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-01 (“ASU 2016-01”), Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities , as amended by ASU No. 2018-03, Financial Instruments-Overall: Technical Corrections and Improvements , issued in February 2018, on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the fair value option that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. Additionally, there is no longer a requirement to assess equity securities for impairment since such securities are now measured at fair value through net income. We utilized a modified retrospective approach to adopt the new guidance effective July 1, 2018. The impact related to the change in accounting for equity securities for our fiscal year ended June 30, 2018 was $0.3 million of net unrealized investment gains, net of income tax, reclassified from AOCI to retained earnings. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), on the recognition of lease assets and lease liabilities on the balance sheet. The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new guidance changes the current accounting guidance related to the recognition of lease assets and lease liabilities. We early adopted the new guidance effective June 30, 2019, as further disclosed in Note 16 to these financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220) (“ASU 2018-02”), which permits entities to reclassify the tax effects stranded in accumulated other comprehensive income as a result of recent United States federal tax reforms to retained earnings. The guidance also requires entities to disclose their accounting policies with regards to the treatment of stranded tax effects not related to the Tax Cuts and Jobs Act. It allows entities to elect either a “security-by-security” approach or a “portfolio approach” to recognize the stranded tax effects from a valuation allowance release. Under the security-by-security approach, an entity will recognize the stranded tax effects associated with individual securities as it disposes of each security. Under the portfolio approach, an entity will recognize the stranded tax effects associated with a portfolio of securities when it has disposed of all securities within that portfolio. Entities can elect to apply the guidance retrospectively or in the period of adoption. This guidance is effective for fiscal years beginning after December 15, 2018 and interim periods therein, with early adoption permitted. We adopted the new guidance effective July 1, 2019 with no material impact on our consolidated financial statements or disclosures. We elected the portfolio approach to recognize the stranded tax effects from our valuation allowance release. In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 provides changes to clarify or improve existing guidance. This guidance is effective upon issuance. We adopted the new guidance effective March 31, 2020 with no impact on our consolidated financial statements or disclosures. Recent Accounting Guidance Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU No. 2018-13”). ASU No. 2018-13 is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact this change will have on our consolidated financial statements and disclosures. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates (“ASU 2019-10”). Among other things, ASU 2019-10 provides that ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) will be effective for Public Business Entities that are SEC filers, excluding smaller reporting companies such as the Company, for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, including smaller reporting companies like the Company, ASU 2016-13 will be effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. For all entities, early adoption will continue to be permitted. We are currently evaluating the impact that ASU 2016-13 will have on our consolidated financial statements and disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact that ASU 2019-12 will have on our consolidated financial statements and disclosures. |
Investments
Investments | 12 Months Ended |
Jun. 30, 2020 | |
Investments | |
Investments | 3. Investments Fixed-Maturity and Equity Securities Investments The following tables provide information relating to investments in fixed-maturity and equity securities: Unrealized Unrealized June 30, 2020 Cost Gains Losses Fair Value (Amounts in thousands) Equity securities Common stock and common stock options $ 6,746 $ 203 $ (2,460) $ 4,489 Preferred stock 2,883 — — 2,883 Total equity securities $ 9,629 $ 203 $ (2,460) $ 7,372 Amortized Unrealized Unrealized Cost Gains Losses Fair Value Fixed-maturity securities Corporate debt $ 26,594 $ 455 $ (5,620) $ 21,429 Total fixed-maturity securities $ 26,594 $ 455 $ (5,620) $ 21,429 Unrealized Unrealized June 30, 2019 Cost Gains Losses Fair Value (Amounts in thousands) Equity securities Common stock $ 5,706 $ — $ (1,185) $ 4,521 Common stock warrants 288 — (287) 1 Preferred stock 2,883 — — 2,883 Total equity securities $ 8,877 $ — $ (1,472) $ 7,405 Amortized Unrealized Unrealized Cost Gains Losses Fair Value Fixed-maturity securities Corporate debt $ 25,761 $ — $ (5,368) $ 20,393 Total fixed-maturity securities $ 25,761 $ — $ (5,368) $ 20,393 We reported $785,000 and $1,785,000 of unrealized loss on equity securities, net in the fiscal years ended June 30, 2020 and 2019, respectively, within our consolidated statement of operations. Additionally, we reported $2,252,000 and $467,000 of realized gain on the sale of debt and equity securities in the fiscal years ended June 30, 2020 and 2019, respectively, within our consolidated statement of operations. Maturities of Fixed-Maturity Securities Available-for-Sale The amortized cost and fair values of fixed-maturity securities available for sale as of June 30, 2020 are shown by contractual maturity in the table below. Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Fixed Maturity Securities Amortized Cost Fair Value (Amounts in thousands) Due after one year through three years $ 18,512 $ 14,269 Due after three years through five years — — Due after five years through 10 years 8,082 7,160 Total fixed-maturity securities $ 26,594 $ 21,429 |
Mortgage and Commercial Loans R
Mortgage and Commercial Loans Receivable | 12 Months Ended |
Jun. 30, 2020 | |
Mortgage and Commercial Loans Receivable | |
Mortgage and Commercial Loans Receivable | 4. Mortgage and Commercial Loans Receivable We had $5,573,000 of loan assets as of June 30, 2020, of which $1,695,000 are mortgage loans secured by real property in certain markets throughout the United States, and the remaining balance was comprised of loans to MCA originators. A summary of mortgage loan activity for the fiscal year ended June 30, 2020 is as follows: Deferred Fees/ Accrued Carrying Mortgage Loans Receivable Principal Balance Prepaid Interest Interest Value (Amounts in thousands) Balance at July 1, 2018 $ 3,005 $ — $ — $ 3,005 Additions during the period: New mortgage loans 4,110 (84) 3 4,029 Deductions during the period: Collections of principal (2,920) — — (2,920) Balance at July 1, 2019 $ 4,195 $ (84) $ 3 $ 4,114 Additions during the period: Fundings of mortgage loans 75 — — 75 Additions to deferred fees — (95) — (95) Amortization of deferred fees — 93 — 93 Interest due at maturity — — 40 40 Deductions during the period: Collections of principal (2,532) — — (2,532) Balance at June 30, 2020 $ 1,738 $ (86) $ 43 $ 1,695 A summary of loan activity to MCA originators for the period is as follows (amounts in thousands): Other Loans Receivable Balance at July 1, 2018 $ — Additions during the period: Borrowings 5,623 Deductions during the period: Collections of principal (2,873) Balance at July 1, 2019 $ 2,750 Additions during the period: Borrowings 2,750 Deductions during the period: Collections of principal (1,622) Balance at June 30, 2020 $ 3,878 Loans reported under “Other Loans Receivable” have two-year, interest-only terms, bearing interest at 17.0% per annum, and are to a single MCA originator. The borrower may pay down principal without incurring a prepayment penalty and paid down $1,622,000 of principal during the fiscal year ended June 30, 2020. |
Advances Receivable, net
Advances Receivable, net | 12 Months Ended |
Jun. 30, 2020 | |
Advances Receivable, net | |
Advances Receivable, net | 5. Advances Receivable, net Total advances receivable, net, as of June 30, 2020, consisted of the following: Provision Advance Deferred for Credit Carrying Principal Fees Losses Value (Amounts in thousands) Merchant cash advances $ 1,919 $ — $ (124) $ 1,795 Aviation advances 10,000 (359) — 9,641 Advances receivable, net $ 11,919 $ (359) $ (124) $ 11,436 Total advances receivable, net, as of June 30, 2019, consisted of the following: Provision Advance Deferred for Credit Carrying Principal Fees Losses Value (Amounts in thousands) Merchant cash advances $ 7,434 $ — $ (736) $ 6,698 Aviation advances 2,750 (59) — 2,691 Advances receivable, net $ 10,184 $ (59) $ (736) $ 9,389 As of June 30, 2020, 100% of MCAs in which we hold a participation interest were originated through three MCA originators. As of June 30, 2019, 97% of MCAs in which we hold a participation interest were originated through a single originator. Changes in the allowance for MCA credit losses are as follows (amounts in thousands): Allowance for credit losses, July 1, 2018 $ — Provision for credit losses 1,605 Receivables charged off (869) Allowance for credit losses, July 1, 2019 $ 736 Provision for credit losses 849 Receivables charged off (1,624) Recoveries of receivables previously charged off 162 Effects of exchange rate differences 1 Allowance for credit losses, June 30, 2020 $ 124 During the fiscal years ended June 30, 2020 and 2019, we provided $17,474,000 and $4,750,000 of cash advances, respectively, to fund aircraft purchasers' deposits to purchase aircraft in exchange for paying us a fee and a guaranty of the full repayment obligation from the principal of the third-party business. These deposits are typically outstanding for less than six months. The prepaid fees are netted against the principal balance, earned over the advance period, and are reported as part of MCA income within the statement of operations. During the fiscal year ended June 30, 2020, we collected $11,250,000 of these advances. Each quarter, we review the carrying value of this cash advance, and determine if an impairment reserve is necessary. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 6. Goodwill and Intangible Assets As further described in Note 1 to these financial statements, the economic impact of the ongoing pandemic on the LMCS business and our decision to not provide additional resources to LMCS to fund MCAs through MCA originators in the future triggered the requirement for a quantitative impairment test of the goodwill and long-lived assets attributable to our LMCS business unit during the fourth quarter of our fiscal year ended June 30, 2020. As such, we conducted these impairment analyses and concluded that the goodwill, long-lived assets, and right-of-use lease assets attributable to our LMCS business unit were impaired as of June 30, 2020. Our right-of-use lease asset is discussed further in Note 16. Definite-lived intangible assets and goodwill as of June 30, 2020 and 2019 consisted of the following (amounts in thousands): Fiscal Year Ended June 30, 2020 Remaining Current Period Less: Useful Gross Impairment Accumulated Life Value Charge Amortization Total Trade names 10 years $ 180 $ (25) $ (25) $ 130 Non-competition agreements 1 year 790 (473) (217) 100 Investor/Funder relationships 6 years 2,120 (64) (416) 1,640 Definite lived intangible assets $ 3,090 $ (562) $ (658) $ 1,870 Goodwill $ 1,260 $ (780) $ — $ 480 Fiscal Year Ended June 30, 2019 Current Period Less: Gross Impairment Accumulated Value Charge Amortization Total Trade names $ 180 $ — $ (7) $ 173 Non-competition agreements 790 — (59) 731 Investor/Funder relationships 2,120 — (114) 2,006 Definite lived intangible assets $ 3,090 $ — $ (180) $ 2,910 Goodwill $ 1,260 $ — $ — $ 1,260 A non-cash impairment charge was recorded as reflected in the table above as of June 30, 2020. Offsetting this non-cash impairment charge, we also reduced the estimated fair value of contingent consideration payable to Old LuxeMark in the form of cash and warrants by $3,090,000 to zero during our fiscal year ended June 30, 2020. If the pandemic's economic impact becomes more severe, or if the economic recovery takes longer to materialize or does not materialize as strongly as anticipated, we may realize further charges for impairments of long-lived assets and goodwill. At June 30, 2020, amortization of definite-lived intangibles for the next five years is expected to be as follows (amounts in thousands): Fiscal Year Ending June 30 Amount 2021 386 2022 287 2023 286 2024 286 2025 286 Thereafter 339 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | 7. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following: June 30, June 30, 2020 2019 (Amounts in thousands) Accounts payable, trade $ 294 $ 221 Lease liability - current 225 153 Dividends payable, short-term portion 53 1 Unrecognized income from research and development tax credits 35 35 Accrued compensation 29 56 Other accrued expenses 167 194 Total accounts payable and accrued expenses $ 803 $ 660 |
Term Loan
Term Loan | 12 Months Ended |
Jun. 30, 2020 | |
Term Loan | |
Term Loan | 8. Term Loan In fiscal year 2019, we entered into an 18-month, $1,600,000 term loan with a commercial bank to finance part of a land purchase for the purpose of entitling and reselling the land. The term loan had a 5.25% interest rate with interest-only payments due monthly and was fully repaid during the fiscal year ended June 30, 2020. As of June 30, 2020, we have capitalized $57,000 of interest from this loan as part of the land cost. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. With a few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for fiscal years before 2000. The domestic and foreign components of income from continuing operations before income taxes are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 United States $ 7,151 $ 750 Foreign (152) (160) Income from operations $ 6,999 $ 590 The components of the (benefit) provision for income taxes are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Current: Federal $ — $ (19) State 651 34 Foreign — — Total current $ 651 $ 15 Deferred Federal $ (6,409) $ 6 State (272) 19 Foreign — — Total deferred $ (6,681) $ 25 Total $ (6,030) $ 40 A reconciliation of the income tax (benefit) expense computed using the federal statutory income tax rate to our (benefit) provision for income taxes is as follows: Fiscal Year Ended June 30, 2020 2019 (Amounts in thousands) Provision at federal statutory rate $ 1,470 $ 124 Change in valuation allowance (8,738) (1,709) Permanent differences 1 3 Net operating loss expiration and adjustment 521 2,284 Change in state tax rates 291 (244) Change in uncertain tax positions 131 6 Foreign rate differential (15) (16) State and foreign tax expense 419 77 (Income) loss attributable to non-controlling interest (178) 28 Other 68 (513) (Benefit) provision for income taxes $ (6,030) $ 40 Our deferred tax assets were comprised of the following: June 30, 2020 2019 (Amounts in thousands) Deferred tax assets related to: U. S. and foreign net operating loss carryforwards $ 14,388 $ 16,017 Accrued compensation 1,222 1,262 Unrealized gain/loss on investments 1,751 1,828 Partnership investment — 237 U. S. credit carryforwards 751 1,225 Stock compensation 919 190 Acquisition costs 62 75 Other 85 76 Deferred tax assets 19,178 20,910 Valuation allowance (11,697) (20,435) Total deferred tax assets $ 7,481 $ 475 Deferred tax liabilities related to: Partnership investment $ 151 $ — Bond interest accretion 698 — Deferred tax liabilities 849 — Total deferred tax liabilities $ 849 $ — Deferred income taxes (net) $ 6,632 $ 475 As of June 30, 2020, we had U.S. federal net operating losses ("NOLs") of approximately $51,438,000 for income tax purposes, of which none expire in fiscal year 2020, and the remainder expire at various dates through fiscal year 2037. We recently completed an evaluation of the potential effect of Section 382 of the Internal Revenue Code (the “IRC”) on our ability to utilize these NOLs. The study concluded that we have not had an ownership change for the period from July 22, 1993 to June 30, 2020. If we experience an ownership change as defined in Section 382 of the IRC, our ability to use these NOLs will be substantially limited, which could therefore significantly impair the value of that asset. See section below entitled “Tax Asset Preservation Plan” for details regarding steps we have taken to protect the value of our NOLs. As of June 30, 2020, we had state NOLs of $22,856,000 and foreign NOLs of $8,258,000. The state NOLs expire according to the rules of each state and expiration will occur between fiscal year 2020 and fiscal year 2035. As of June 30, 2020, the foreign NOLs can be carried forward indefinitely, although some countries do restrict the amount of NOL that can be used in a given tax year. We have evaluated our ability to generate future taxable income in all jurisdictions that would allow us to realize the benefit associated with these NOLs. Based on our best estimate of future taxable income, we do not expect to fully realize the benefit of these NOLs. We expect a significant amount of the U.S. NOLs to expire without utilization, resulting in a valuation allowance in the United States on this portion of the NOLs. We do not expect to realize the benefits of our NOLs in other international jurisdictions due to cumulative accounting losses, our long history of taxable losses, and our uncertainty with respect to generating future taxable income in the near term given our recently completed projections and other inherent uncertainties in our business. We continue to maintain a full valuation allowance on NOLs in these other international jurisdictions. We have a research and development credit carryforward for federal purposes of $751,000, which has a carryforward period of 20 years, and which will expire in fiscal years 2023 through 2026. We do not expect that the Company will be able to realize the benefit of the research and development credit carryforwards expiring in fiscal years 2023 and 2024, so the Company maintains a valuation allowance on this portion of the research and development credit carryforwards. We also have a $950,000 federal Alternative Minimum Tax (“AMT”) credit carryforward which became refundable under the TCJA. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) allowed us to claim the remaining AMT credit as a refund during the fiscal year ended June 30, 2020. Of the $950,000 AMT credit carryforward from June 30, 2019, $475,000 had been received as of June 30, 2020, and the remainder was reported in other current assets on the accompanying consolidated balance sheet. We have reassessed our intentions related to our indefinite reinvestment assertion as part of our provisional estimates. We no longer have the intent and ability to reinvest all undistributed earnings in the business of our wholly owned foreign subsidiary. As of June 30, 2020, our German subsidiary is our only remaining controlled foreign corporation. Germany holds an insignificant amount of cash that could be brought back to the U. S. Additionally, the German subsidiary is in a net accumulated deficit position. As a result, any remaining impact on income taxes – for example, state taxes, withholding taxes, or foreign exchange differences – would be immaterial. The valuation allowance for deferred tax assets as of June 30, 2020 was $11,697,000, an $8,738,000 decrease from the June 30, 2019 balance of $20,435,000. This change consisted of a $8,689,000 decrease due to the release of a significant portion of the U. S. valuation allowance during the fiscal year ended June 30, 2020 and a $49,000 decrease due to the change in the balance of fully valued German deferred taxes. Deferred Tax Assets and Related Valuation Allowances In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In determining whether or not a valuation allowance for tax assets is needed, we evaluate all available evidence, both positive and negative, including trends in operating income or losses, currently available information about future tax years, future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards, taxable income in prior carryback tax years if carryback is permitted under the tax law, and tax planning strategies that would accelerate taxable amounts to utilize expiring carryforwards, change the character of taxable and deductible amounts from ordinary income or loss to capital gain or loss, or switch from tax-exempt to taxable investments. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of June 30, 2020, we have released the valuation allowance on our U. S. deferred tax assets, with the exception of certain federal and state NOLs and credits expected to expire before usage. We continue to maintain a full valuation allowance on our German deferred tax asset. Unrecognized tax benefits A reconciliation of the beginning and ending amount of our unrecognized tax benefits for the fiscal years ended June 30, 2020 and 2019 is as follows (amounts in thousands): Balance at July 1, 2018 $ 251 Activity for year ended June 30, 2019 — Balance at June 30, 2019 251 Increase related to tax positions - Current year 121 Balance at June 30, 2020 $ 372 The amount of gross tax-effected unrecognized tax benefits as of June 30, 2020 was approximately $372,000, of which approximately $316,000, if recognized, would affect the effective tax rate. During the fiscal year ended June 30, 2020, we recognized approximately $10,000 of interest. We had approximately $43,000 and $33,000 of accrued interest at June 30, 2020 and 2019, respectively. We had no accrued penalties as of either June 30, 2020 or 2019. We recognize potential interest and penalties related to unrecognized tax benefits as a component of income tax expense. We believe that the amount of uncertainty in income taxes will not change by a significant amount within the next 12 months. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for fiscal years before 2000. Tax Asset Preservation Plan At our 2016 Annual Meeting of Stockholders held on October 26, 2016, our stockholders adopted a formal amendment to our certificate of incorporation (the “Protective Amendment”) to deter any person acquiring 4.9% or more of the outstanding common stock without the approval of our Board in order to protect the value of our NOLs. The Protective Amendment was extended by our stockholders at both our 2017 and 2018 Annual Meeting of Stockholders, and will expire on the earliest of (i) the Board of Directors’ determination that the Protective Amendment is no longer necessary for the preservation of the Company’s NOLs because of the amendment or repeal of Section 382 or any successor statute, (ii) the close of business on the first day of any taxable year of CCUR Holdings to which the Board of Directors determines that none of our NOLs may be carried forward, (iii) such date as the Board of Directors otherwise determines that the Protective Amendment is no longer necessary for the preservation of the Company’s NOLs, and (iv) the date of our Annual Meeting of Stockholders to be held during calendar year 2020. As indicated in our Form 8‑K filed on May 11, 2018, the Company executed and delivered the Third Amended Consent and Limited Waiver to the Standstill Agreement, filed therewith as Exhibit 10.1 (the “Amended Consent and Limited Waiver”), to JDS1, LLC and Julian Singer (together with their affiliates and associates, the “Investor Group”). The Amended Consent and Limited Waiver provides that so long as (i) the Investor Group collectively beneficially own no more than 4,176,180 of the outstanding shares of common stock of the Company, including the Investor Group’s beneficial ownership of Common Stock as a result of the exercise or assignment of any option contracts, and (ii) any acquisition of common stock of the Company by the Investor Group would not reasonably be expected to limit the Company’s ability to utilize the Company’s NOLs, the Company shall not deem the Investor Group to have effected a Prohibited Transfer as that term is defined in the Company’s Restated Certificate of Incorporation. CARES Act On March 27, 2020, the CARES Act was signed into law. Key provisions of the CARES Act include one-time payments to individuals, strengthened unemployment insurance, additional health-care funding, loans and grants to certain businesses, and temporary amendments to the Internal Revenue Code ("IRC"). The corporate income tax provisions of the CARES Act include allowing the carryback of NOLs generated in recent tax years, temporary removal of the 80% NOL usage limitation put in place under the TCJA, temporary favorable adjustments to the business interest expense limitation calculated under IRC Section 163(j), and the acceleration of refundable AMT credits. We believe that the corporate income tax provisions of the CARES Act will not have a materially beneficial impact on the Company. Due to our history of losses , there is no potential for the carryback of NOLs. The temporary removal of the 80% income limitation on NOL usage has no impact, as we have substantial NOLs generated in years prior to the enactment of the TCJA not subject to this 80% limitation. We also do not have any interest expense disallowed under IRC Section 163(j) that would be impacted by the CARES Act. The only provision of note is the election to treat remaining AMT credits available as fully refundable as of the 2018 tax year. As of June 30, 2020, we have made use of this election in order to claim all remaining refundable AMT credits. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 10. Stock-Based Compensation We have a stock incentive plan providing for the grant of stock -based awards to employees and directors. The Compensation Committee of the Board of Directors (“Compensation Committee”) administers the Amended and Restated 2011 Stock Incentive Plan (the "Stock Plan"). Under the Stock Plan, the Compensation Committee may award stock options and shares of common stock on a restricted basis. The Stock Plan also specifically provides for stock appreciation rights ("SARs") and authorizes the Compensation Committee to provide, either at the time of the grant of an award under the Stock Plan or otherwise, that such award may be cashed out upon terms and conditions to be determined by the Compensation Committee or the Board of Directors. Option awards are granted with an exercise price equal to the market price of our stock at the date of grant. We recognize stock compensation expense in accordance with ASC 718-10 over the requisite service period of the individual grantees, which generally equals the vesting period. All of our stock compensation is accounted for as equity instruments. As of June 30, 2020, there were 692,193 shares available for future grant under the Stock Plan. During the fiscal years ended June 30, 2020 and 2019, we recorded $411,000 and $231,000, respectively, of stock-based compensation expense to selling, general, and administrative expense. Our stock-based compensation expense results from the issuance of stock options and restricted stock to employees and board members during the current and prior years, for which expense is recognized over the respective vesting periods of the granted stock and options. Restricted Stock Awards A summary of our restricted stock activity for the fiscal year ended June 30, 2020 is as follows: Weighted- Average Grant Date Restricted Stock Awards Shares Fair Value Non-vested at July 1, 2019 167,500 $ 4.15 Granted 100,026 4.90 Vested (58,336) 4.13 Forfeited (5,000) 5.42 Non-vested at June 30, 2020 204,190 $ 4.41 During the fiscal year ended June 30, 2020, the Company granted 15,000 restricted stock awards to non-employee directors and 85,026 restricted stock awards to employees, all vesting over three years. The 85,026 restricted stock awards to employees were granted in settlement of 2019 bonuses based on the Company’s net asset value as of December 31, 2019 under the Company’s 2019 bonus plan. The share-based compensation expense attributable to these awards is being recorded over the requisite service period starting with the service inception date and ending on the final vest date. Total remaining compensation cost of restricted stock awards issued but not yet vested as of June 30, 2020 is $527,000, which is expected to be recognized over the weighted-average period of 2.31 years. Stock Options As of June 30, 2020, we had 15,000 stock options outstanding, of which 10,000 options had vested and were exercisable, at a weighted-average exercise price of $5.42, with a weighted-average remaining contractual term of 7.64 years. Options outstanding and exercisable had no intrinsic value at June 30, 2020 and 2019. Total remaining compensation cost of stock options granted, but not yet vested, at June 30, 2020 is $3,000, which is expected to be recognized over the weighted-average remaining period of 0.63 years. We generally issue new shares to satisfy option exercises. During the fiscal years ended June 30, 2020 and 2019, there were no grants, forfeitures, or exercises of stock options. |
Stock Repurchase Plan
Stock Repurchase Plan | 12 Months Ended |
Jun. 30, 2020 | |
Stock Repurchase Plan | |
Stock Repurchase Plan | 11. Stock Repurchase Plan On March 5, 2018, the Company announced its Board of Directors authorized the repurchase of up to one million shares of the Company’s common stock. In February 2019 we completed the purchase of the authorized one million shares, and the Board of Directors authorized the repurchase of an additional 500,000 shares of the Company’s common stock under a new repurchase program that replaces and supersedes the prior repurchase program. Repurchases may be made at the discretion of management through open market or privately negotiated transactions or any combination of the same. Open market purchases may be made pursuant to trading plans subject to the restrictions and protections of Rule 10b5-1 and/or Rule 10b-18 of the Exchange Act. The repurchase program does not have an expiration date. No purchases were made under this program during the three months ended June 30, 2020. At June 30, 2020, there were 364,298 shares available for repurchase under the program. |
Pensions and Other Postretireme
Pensions and Other Postretirement Benefits | 12 Months Ended |
Jun. 30, 2020 | |
Pensions and Other Postretirement Benefits | |
Pensions and Other Postretirement Benefits | 12. Pensions and Other Postretirement Benefits Defined-Benefit Plans As of June 30, 2020, we maintained Pension Plans covering former employees in Germany. The measurement dates used to determine fiscal years’ 2020 and 2019 benefit information for the Pension Plans were June 30, 2020 and 2019, respectively. The Pension Plans have been closed to new employees since 1998 and no existing employees are eligible to participate, as all eligible participants are no longer employed by us. A reconciliation of the changes in the Pension Plans’ benefit obligations and fair value of plan assets over the two-year period ended June 30, 2020, and a statement of the funded status at June 30, 2020 and 2019, respectively, for the Pension Plans, is as follows: Obligations and Funded Status June 30, 2020 2019 (Amounts in thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,702 $ 4,581 Interest cost 30 60 Actuarial (gain) loss (79) 432 Foreign currency exchange rate change (60) (123) Benefits paid (241) (248) Benefit obligation at end of year $ 4,352 $ 4,702 Change in plan assets: Fair value of plan assets at beginning of year $ 560 $ 809 Actual return on plan assets 6 1 Employer contributions 21 13 Benefits paid (235) (242) Foreign currency exchange rate change (10) (21) Fair value of plan assets at end of year $ 342 $ 560 Funded status at end of year $ (4,010) $ (4,142) Amounts Recognized in the Consolidated Balance Sheets June 30, 2020 2019 (Amounts in thousands) Other accrued expenses (1) $ (5) $ (6) Pension liability - long-term liabilities (4,005) (4,136) Total pension liability $ (4,010) $ (4,142) Accumulated other comprehensive loss $ (1,517) $ (1,707) (1) Included in line item accounts payable and accrued expenses Items Not Yet Recognized as a Component of Net Periodic Pension Cost: June 30, 2020 2019 (Amounts in thousands) Unrecognized actuarial losses $ 1,517 $ 1,707 $ 1,517 $ 1,707 Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets: June 30, 2020 2019 (Amounts in thousands) Projected benefit obligation $ 4,352 $ 4,702 Accumulated benefit obligation 4,352 4,702 Fair value of plan assets 342 560 Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Net Periodic Benefit Cost Interest cost $ 30 $ 60 Expected return on plan assets (5) (5) Recognized actuarial loss 89 64 Net periodic benefit cost $ 114 $ 119 We estimate that $83,000 of the net loss for the Pension Plans will be amortized from accumulated other comprehensive income into net period benefit cost in fiscal year 2021. Assumptions The following table sets forth the assumptions used to determine benefit obligations: June 30, 2020 2019 Discount rate 0.86 % 0.67 % Expected return on plan assets 3.00 % 3.00 % Compensation increase rate 0.00 % 0.00 % The following table sets forth the assumptions used to determine net periodic benefit cost: Fiscal Year Ended June 30, 2020 2019 Discount rate 0.67 % 1.37 % Expected return on plan assets 3.00 % 2.00 % Compensation increase rate 0.00 % 0.00 % On an annual basis, we adjust the discount rate used to determine the projected benefit obligation to approximate rates on high-quality, long-term obligations. Plan Assets The following table sets forth, by level within the fair value hierarchy, a summary of the Pension Plans' assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2020: Percentage of Total Plan Assets Level 1 Level 2 Level 3 Assets 2020 (Amounts in thousands) Asset Category: Cash and cash equivalents $ 46 $ — $ — $ 46 13.5 % Cash surrender value insurance contracts — 296 — 296 86.5 % Totals $ 46 $ 296 $ — $ 342 100.0 % The following table sets forth, by level within the fair value hierarchy, a summary of the Pension Plan’s assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2019: Percentage of Total Plan Assets Level 1 Level 2 Level 3 Assets 2019 (Amounts in thousands) Asset Category: Cash and cash equivalents $ 32 $ — $ — $ 32 5.7 % Cash surrender value insurance contracts — 528 — 528 94.3 % Totals $ 32 $ 528 $ — $ 560 100.0 % Pension assets utilizing Level 1 inputs include cash equivalents. All cash equivalents are carried at cost, which approximates fair value. Level 2 assets include cash surrender life insurance contracts, which were valued based on contractually stated settlement value. In estimating the expected return on plan assets, we consider past performance and future expectations for the fund. The assets of the Pension Plans are heavily weighted toward investments that yield consistent, dependable income streams. Our investment strategy with respect to pension assets is to invest the assets in accordance with applicable laws and regulations. The long-term primary objectives for our pension assets are to (i) provide for a reasonable amount of long-term growth of capital, with prudent exposure to risk, in order to protect the assets from erosion of purchasing power, (ii) provide investment results that meet or exceed the plans’ actuarially assumed long-term rate of return, and (iii) match the duration of the liabilities and assets of the plans to reduce the potential risk of large employer contributions being necessary in the future. Contributions We expect to contribute $6,000 to the Pension Plans in fiscal year 2021. Estimated Future Benefit Payments Expected benefit payments, which reflect expected future service, during the next ten fiscal years ending June 30, are as follows (amounts in thousands): Pension Benefits 2021 $ 244 2022 241 2023 238 2024 238 2025 243 2026 - 2030 1,147 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 12 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive (Loss) Income | |
Accumulated Other Comprehensive (Loss) Income | 13. Accumulated Other Comprehensive (Loss) Income The following table summarizes the changes in accumulated other comprehensive (loss) income by component, net of taxes, for the fiscal year ended June 30, 2020: Pension and Postretirement Currency Unrealized Benefit Translation Loss Plans Adjustments on Investments Total (Amounts in thousands) Balance at June 30, 2019 $ (1,707) $ 496 $ (5,368) $ (6,579) Other comprehensive income 167 50 203 420 Effect of deferred taxes on unrealized losses — — (47) (47) Effect of exchange rates on the pension plans 23 (23) — — Net current period other comprehensive income 190 27 156 373 Balance at June 30, 2020 $ (1,517) $ 523 $ (5,212) $ (6,206) |
Acquisition
Acquisition | 12 Months Ended |
Jun. 30, 2020 | |
Acquisition | |
Acquisition | 14. Acquisition On February 13, 2019, the Company consummated the LuxeMark Acquisition. With the LuxeMark Acquisition, our LMCS subsidiary focuses on the MCA sector of the financial industry, which provides financing to small- and medium-sized businesses. LMCS operates through its syndication network to facilitate MCA funding by connecting a network of MCA originators with syndicate participants who provide those originators with capital by purchasing participation interests in funded MCAs. LMCS utilizes its expertise in the MCA industry to provide reporting and other administrative services to its syndication network. The acquisition was accounted for as a business combination. Accordingly, the tangible and identifiable intangible assets acquired, and liabilities assumed, were recorded at their estimated fair value as of the date of acquisition, with the residual purchase price recorded as goodwill. The goodwill recognized is attributable primarily to strategic opportunities related to establishing market presence in the MCA sector. The goodwill is deductible for income tax purposes, as the transaction was an asset acquisition for income tax purposes. Acquisition costs of $300,000 were expensed in the period incurred and are included in acquisition-related costs as selling, general, and administrative expenses in the accompanying consolidated statement of operations. The acquisition-date fair value of the consideration transferred is as follows (amounts in thousands): Cash consideration $ 1,212 Equity consideration - 20% membership interest in LMCS 893 Equity consideration - warrants to purchase CCUR common stock 200 Fair value of contingent consideration 2,160 Total purchase consideration $ 4,465 The fair value of the 20% membership interest in LMCS issued to Old LuxeMark as part of the Purchase Agreement was determined based on the transaction price attributable to the rollover equity participants. The fair value of common stock purchase warrants issued as part of the Purchase Agreement entitles the holders to purchase from the Company an aggregate amount of 444,361 common shares once vested. Vesting is dependent upon LMCS achieving certain performance levels. The warrants expire in ten years and are exercisable at $6.50 per share. The warrants were valued utilizing the Black-Scholes model. In addition, the Company used a Monte-Carlo simulation model to determine the number of performance-based warrants that are expected to vest. This technique is a probabilistic model which relies on repeated random sampling to obtain numerical results. The concluded value of $200,000 represents the mean of those results. Warrants are included within contingent consideration on the consolidated balance sheet due to the associated contingencies. The Purchase Agreement requires the Company to pay to Old LuxeMark four earnout payments of up to $1,000,000 each if fully earned through the achievement of agreed-upon distributable net income (“DNI”) thresholds. The earnout payments are calculated based on DNI for each of the calendar years ending on December 31, 2019, 2020, 2021, and 2022. The Company utilized a Monte Carlo simulation technique to value performance-based contingent consideration, the same methodology used to determine the number of performance-based warrants that are expected to vest, the vesting of which is tied to the same performance-based DNI benchmarks as the contingent consideration. This analysis resulted in $2,360,000 of contingent consideration as of the acquisition date. During the fourth quarter of our fiscal year 2019, we recorded a $730,000 increase in the contingent consideration liability through our statement of operations, based on updated estimates of projected DNI. As of June 30, 2019, $750,000 of the contingent consideration accrual was reported as a current liability, with the remaining $2,340,000 reported as a non-current liability. The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (amounts in thousands): Accounts receivable $ 153 Intangible assets 3,090 Goodwill 1,260 Total assets acquired 4,503 Accrued commission 38 Total liabilities assumed 38 Net assets acquired $ 4,465 The fair values of intangible assets, including the trade name, non-competition agreements, and investor/funder relationships, were determined using variations of the income approach. We employed the relief from royalty methodology to value the trade name, the with or without methodology to value the non-competition agreements, and the multi-period excess earnings method to value the investor/ funder relationships. Varying discount rates were also applied to the projected net cash flows and EBITDA as applicable to valuation methodology. We believe the assumptions are representative of those a market participant would use in estimating fair value. The acquisition-date fair value and weighted-average amortization periods of intangible assets was as follows ($ amounts in thousands): Weighted- Average Amortization Fair Value Period (Years) Trade name $ 180 10.0 Non-competition agreements 790 5.0 Investor/funder relationships 2,120 7.0 Total $ 3,090 6.7 |
Segments
Segments | 12 Months Ended |
Jun. 30, 2020 | |
Segments | |
Segments | 15. Segments We operate in two segments: (i) “MCA Operations,” conducted primarily through LMCS, and (ii) "Real Estate Operations," conducted primarily through Recur. Our President and Chief Operating Officer ("COO") is our chief operating decision maker (the “CODM”). Our CODM uses revenue and operating income to evaluate the profitability of our operating segments; all other financial information is reviewed by the CODM on a consolidated basis. Segment operating contribution reflects segment revenue, less operating expenses that are directly attributable to the operating segment, not including corporate and unallocated expenses. All of our principal operations and assets are located in the United States. Segment operating results are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Segment revenue: MCA advance income $ 3,240 $ 1,694 Syndication fees 1,288 693 Interest on loans to MCA originators 887 117 Other MCA revenue 154 93 MCA operations revenues 5,569 2,597 Real estate operations revenues 304 859 Consolidated revenues 5,873 3,456 Segment operating expenses: Selling, general and administrative 1,091 562 Impairment of goodwill and long-lived assets 1,395 — Change in fair value of contingent consideration (3,090) 730 Amortization of purchased intangibles 479 180 Provision for credit losses on advances 849 1,095 MCA operations 724 2,567 Real estate operations — — Add: Corporate expenses 6,640 3,646 Consolidated operating expenses 7,364 6,213 Segment operating income (loss): MCA operations 4,845 30 Real estate operations 304 859 Add: Corporate (6,640) (3,646) Consolidated operating income (loss) $ (1,491) $ (2,757) Segment assets as of June 30, 2020 and 2019 are as follows: June 30, June 30, 2020 2019 (Amounts in thousands) Segment Assets MCA $ 19,287 $ 18,277 Real estate 9,275 7,379 Add: Corporate assets 48,065 47,190 Corporate intercompany loan to LMCS (6,777) (10,372) Total consolidated assets $ 69,850 $ 62,474 |
Leases
Leases | 12 Months Ended |
Jun. 30, 2020 | |
Leases | |
Leases | 16. Leases The Company leases office space in two locations: (i) Duluth, Georgia, and (ii) New York City, New York. The Duluth, Georgia lease expires in 2025, and the New York City, New York lease expires in 2023. We prospectively adopted ASU 2016-02 effective for the fiscal year ended June 30, 2019. For leases with a term of 12 months or less, we made an accounting policy election not to recognize lease assets and lease liabilities. The following information represents the amounts included in the financial statements related to leases (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Operating lease cost $ 236 $ 56 Gross sublease income 143 33 Operating cash flows from operating leases (93) (23) Operating lease cost is reported as part of selling, general, and administrative expenses on the consolidated statement of operations. Sublease income is reported as a reduction of selling, general, and administrative expenses on the consolidated statement of operations. Operating cash flows from leases are reported as part of net income (loss) on the consolidated statement of cash flows. Right-of-use assets obtained in exchange for new operating lease liabilities are reported as part of other long-term assets on the consolidated balance sheet. The short-term portions of the operating lease liabilities are reported as part of accounts payable and accrued expenses on the consolidated balance sheet. The long-term portions of the operating lease liabilities are reported as part of other long-term liabilities on the consolidated balance sheet. The weighted-average remaining lease term for operating leases as of June 30, 2020 is 44 months. The weighted-average annual discount rate used for operating leases as of June 30, 2020 is 7.4%. At June 30, 2020, lease payments for operating leases for the next five years are as follows (amounts in thousands): Fiscal Year Ending June 30 Amount 2021 250 2022 258 2023 123 2024 79 2025 81 The total lease liability on the balance sheet as of June 30, 2020 is $777,000. Total unrecognized expected interest expense related to leases is $84,000. During the fourth quarter of our fiscal year 2020, we determined that the right of use asset attributable to our LMCS business unit was impaired. As such, we recorded a $53,000 non-cash impairment charge to impairment of goodwill and long-lived assets on the accompanying statements of operations. See Note 6. |
Commitments and Contingencies a
Commitments and Contingencies and Related Party Transactions | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies and Related Party Transactions | |
Commitments and Contingencies and Related Party Transactions | 17. Commitments and Contingencies and Related Party Transactions Commitments and Contingencies Severance Arrangements Pursuant to the terms of the employment agreements with our President and COO and our Chief Financial Officer (“CFO”), employment may be terminated either by the respective employee or by the Company at any time. In the event an agreement is terminated by us without cause, or in certain circumstances terminates constructively or expires, the terminated employee will receive severance compensation for a period from six to 12 months, depending on the employee, and bonus severance. Additionally, if terminated, our President and COO and our CFO will continue to receive the employer portion of health coverage during their severance period. At June 30, 2020, the maximum contingent liability under these agreements was $405,000 in the aggregate. Inadvertent Investment Company We do not believe that we are engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in the business of investing, reinvesting, or trading in securities. However, with the assistance of the Asset Manager, we hold excess liquid resources in marketable securities to preserve resources needed to acquire operating businesses or assets and fund our finance and real estate activities. The Board of Directors and management monitor the Company's status relative to the inadvertent investment company test under the Investment Company Act of 1940 (the "ICA") and believe that the Company is not, currently or as of June 30, 2020, an inadvertent investment company based on the assets test under Section 3(a)(1)(C) of the ICA. If we were deemed to be an inadvertent investment company and determined to or were required to become a registered investment company, we would be subject to burdensome and costly compliance requirements and restrictions that would limit our activities, including limitations on our capital structure, additional corporate governance requirements, and other limitations on our ability to transact business as currently conducted. We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company. To avoid being deemed an inadvertent investment company or becoming a registered investment company, we may decide or be required to sell certain of our investments on disadvantageous terms, hold a greater proportion of our investments in marketable securities in U.S. government securities or cash equivalents that have a lower rate of return than other investment securities, or make other material modifications to our business operations and strategy, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and future prospects. Related Party Transactions Management Agreement In February 2019, the Company entered into a management agreement with CIDM LLC (the “Prior Asset Manager”) under which CIDM LLC provides consulting services and advice to the Board of Directors and the Company’s management regarding asset allocation and acquisition strategy. During our fiscal year 2020, the management agreement was assigned to CIDM II, LLC (“CIDM II”, or the “Asset Manager”). CIDM II exclusively manages the Company’s portfolio of publicly traded investments and, subject to the terms of the management agreement and the guidelines set forth therein, maintains investment authority over such portfolio, in order to better position the Company to increase its return on assets. CIDM II is an affiliate of the Company’s largest stockholder, JDS1, LLC. Under the terms of the management agreement the Company pays the asset manager both (i) an asset management fee on a quarterly basis, based upon the total assets of the Company, and (ii) an annual performance fee, based upon calendar year asset growth. Both the management fee and performance fee are settled through the issuance of cash-settled SARs with a base price of $0.01 per share. On June 4, 2020, the Company entered into an “Omnibus Amendment Regarding the Management Agreement and SARs Agreements” (the “Omnibus Amendment”) by and among the Company, the Asset Manager and the Prior Asset Manager amending certain terms of the original management agreement, dated as of February 14, 2019, by and between the Company and the Prior Asset Manager, including the form of SARs agreement (the “Form of SARs Agreement”), and the SARs agreements entered into pursuant to the Management Agreements between the Company and the Prior Manager (the “Prior SARs Agreements”). Pursuant to the Management Agreement, the Asset Manager, among other things, (i) provides the Company with advisory services with respect to the management and allocation of the assets of the Company and its subsidiaries, and (ii) exercises discretionary management authority over the Company’s trading portfolio of publicly traded securities. The Omnibus Amendment amended the terms of the Management Agreement to provide that: (i) (ii) (iii) The Omnibus Amendment also affects the assignment of the Prior SARs Agreements from the Prior Manager to the Asset Manager and amends the Prior SARs Agreements and the Form of SARs Agreement, pursuant to which SARs will be granted to the Asset Manager in the future, in each case, to provide that SARs granted thereunder are exercisable as of the date of grant, subject to any restrictions in the applicable agreement. Prior to this Omnibus Amendment, the Company granted 797,446 SARs, to be settled in cash, to the Prior Manager, as compensation for the Management Fee and the calendar year 2019 Performance Fee, with a base price of $0.01 per share, that were earnable upon completion of both service and performance conditions. The service condition was completed each quarter as the asset management services were provided, and annually upon calculation of the Performance Fee. The vesting performance condition required the Company to undergo a qualifying change of control before the SARs are exercisable by the Prior Asset Manager. As such, because a qualifying change of control had neither occurred nor become probable before the Omnibus Amendment, the Company did not record expense attributable to the granted SARs. The Omnibus Amendment modified the granted SARs’ and future SAR grants’ vesting criteria by removing the performance condition of a qualifying change of control so that SARs are exercisable upon grant. With this modification, the Company recorded $2,552,000 of compensation expense during the fourth quarter of our fiscal year 2020 attributable to SARs for which vesting was previously subject to a qualifying change of control. Additionally, the Company recorded $289,000 of expense for the 90,310 cash settled SARs that it expects to grant to the Asset Manager during the first quarter of fiscal year 2021 as compensation for the Management Fee during the fourth quarter of our fiscal year 2020. These amounts are accrued as management fee payable on our consolidated balance sheet as of June 30, 2020. SAR expense is calculated based upon the closing price of the Company’s stock on the last day of the reporting period. Other Fees Paid to the Asset Manager In addition to the SARs-settled Management and Performance Fees, the Company provides the Asset Manager with $50,000 per quarter for the purpose of expense reimbursements. As part of the Amendment, the Company also paid $399,000 in cash to the Asset Manager as a one-time fee based upon the number of SARs issued to the Asset Manager as of our February 24, 2020 dividend record date, multiplied by the $0.50 per share one-time dividend declared in February 2020 and paid in March 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events | |
Subsequent Events | 18. Subsequent Events On July 17, 2020, LMCS, a majority-owned subsidiary of the Company that operates as a business unit within our MCA segment, entered into a series of transactions resulting in the recapitalization of LMCS. The transactions included an amendment to the operating agreement of LMCS that reduced our ownership from 80% to 51% of LMCS and the grant by the Company to LMCS’s non-controlling member of a right to purchase the Company’s remaining equity interests in LMCS upon the occurrence of certain conditions, including, without limitation, the repayment of an intercompany note from the Company to LMCS. The transactions also included (i) the waiver of LMCS’s obligations to pay contingent consideration to the non-controlling member, (ii) the termination of certain warrants to purchase the Company’s capital stock held by certain affiliates of the non-controlling member, (iii) the assignment of certain contractual rights of LMCS to the non-controlling member, and (iv) the amendment of an intercompany note from the Company to LMCS. All conditions required for the non-controlling member to have the right to repurchase LMCS have been met as of the filing date of this report, with the exception of the repayment of the intercompany note. |
MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOANS ON REAL ESTATE | 12 Months Ended |
Jun. 30, 2020 | |
MORTGAGE LOANS ON REAL ESTATE | |
MORTGAGE LOANS ON REAL ESTATE | SCHEDULE IV CCUR HOLDINGS, INC. MORTGAGE LOANS ON REAL ESTATE Principal Amount of Mortgages Subject to Contractual Maturity Face Carrying Delinquent Principal Description Property Type Interest Rate Date Periodic Payment Amount Value or Interest (Amounts in thousands) First Mortgages: Loan A Commercial Manufacturing 12.0 % 5/30/22 Interest Only, Balloon Final 1,000 970 — Loan B Residential Predevelopment 10.0 % 10/21/21 Milestone 738 725 — Total Loans $ 1,738 $ 1,695 $ — |
Overview of the Business and _2
Overview of the Business and Basis of Presentation (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Overview of the Business and Basis of Presentation | |
Smaller Reporting Company | Smaller Reporting Company We meet the Securities and Exchange Commission's (the "SEC’s") definition of a “Smaller Reporting Company,” and therefore qualify for the SEC’s reduced disclosure requirements for smaller reporting companies. |
Principles of Consolidation and Reclassifications | Principles of Consolidation and Reclassifications The consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net income, assets, liabilities, stockholders’ deficit, or net operating, investing, or financing cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Business Combinations | Business Combinations The Company accounts for acquisitions of entities that include inputs and processes and have the ability to create outputs as business combinations. The Company allocates the purchase price of the acquisition to the tangible assets acquired, liabilities assumed, and identifiable intangible assets acquired based on their estimated fair values. The excess of the purchase price over those fair values is recorded as goodwill. Acquisition-related expenses and restructuring costs are expensed as incurred. During the measurement period, the Company records adjustments to provisional amounts recorded for assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, which could be up to one year after the transaction date, subsequent adjustments are recorded to the Company's consolidated statements of operations. The Company recognizes the fair value of contingent consideration as of the acquisition date as part of the consideration transferred in exchange for an acquired business. The fair value of the contingent consideration is recorded as a liability and remeasured each accounting period, with any resulting change being recorded as an operating income or loss item within the statement of operations. |
Foreign Currency | Foreign Currency The functional currency of all our foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using average rates of exchange prevailing during the fiscal year. Adjustments resulting from the translation of foreign currency financial statements are accumulated in a separate component of stockholders’ equity. Gains or losses resulting from foreign currency transactions are included in the consolidated statements of operations, except for those relating to intercompany transactions of a long-term investment nature, which are accumulated in a separate component of stockholders’ equity. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash balances and short-term investments with original maturities of 90 days or less at the date of purchase are considered cash equivalents. Cash equivalents are stated at fair value, and represent cash and cash invested in money market funds and commercial paper. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to a concentration of credit risk include cash and cash equivalents on deposit that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. Concentration of credit risk consists of cash and cash equivalents maintained in financial institutions that are, in part, in excess of the FDIC limits. At times, the Company may hold cash balances in excess of the FDIC insurance limits. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the fair value of the net assets of businesses acquired. We review goodwill at least annually for impairment. In our evaluation of goodwill impairment, we perform a qualitative assessment that requires management judgment and the use of estimates to determine if it is more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount. An entity has an unconditional option to bypass the qualitative assessment for any reporting unit and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. We perform our annual impairment tests as of December 31 of each year, unless circumstances indicate the need to accelerate the timing of the tests. We completed our annual impairment test of goodwill as of December 31, 2019 and concluded that there was no impairment. Intangible assets include trade name, non-competition agreements, and syndicate participant/originator relationships, are subject to amortization over their respective useful lives, and are classified in definite-lived intangibles, net, in the accompanying consolidated balance sheets. These intangibles are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be fully recoverable. If facts and circumstances indicate that the carrying value might not be recoverable, projected undiscounted net cash flows associated with the related assets or groups of assets over their estimated remaining useful lives is compared against their respective carrying amounts. If an asset is found to be impaired, the impairment charge will be measured as the amount by which the carrying amount of an asset exceeds its fair value. Subsequent to completion of our annual goodwill impairment analysis, the COVID-19 virus developed into a pandemic that significantly impacted the global economy. Our MCA segment experienced a decline in revenues during the last quarter of our fiscal year ended June 30, 2020, which management believes is predominantly due to the economic uncertainties caused by the pandemic, and we anticipate our MCA revenues will continue to be adversely affected while major parts of the U.S. economy are restricted by mandatory business shut-downs and/or stay-at-home orders, as well as other effects of the pandemic. We decreased our volume of new funding arrangements while evaluating the effect of the current economic uncertainties on the MCA business and its customers during the third quarter of our fiscal year 2020. During the fourth quarter of our fiscal year 2020, management concluded that it would not resume funding MCAs with MCA originators and would focus our MCA segment exclusively on MCA syndication fee income generated by our LMCS business unit and funding aviation purchase deposits for fees. Our reduced participation in MCA funding through originators reduces our syndication fee income and revenue from direct funding of MCAs. We anticipate continued lower funding of new MCAs and reduced collection volume on outstanding MCAs until the economic situation caused by the pandemic stabilizes and a greater level of economic activity returns. The economic impact of the ongoing pandemic on the LMCS business and our decision to not provide additional resources to LMCS to fund MCAs through MCA originators in the future triggered the requirement for a quantitative impairment test of the goodwill and long-lived assets attributable to our LMCS business unit during the fourth quarter of our fiscal year ended June 30, 2020. As a result of the impairment tests, we concluded that the goodwill, definite-lived intangible assets, and right-of-use lease assets attributable to our LMCS business unit were impaired as of June 30, 2020. See Note 6 for further discussion. |
Investments in Debt and Equity Securities | Investments in Debt and Equity Securities We determine the appropriate classification of investments in debt securities at the time of purchase and reevaluate such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short-term or long-term in the consolidated balance sheet based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Debt securities not classified as held-to-maturity or as trading are classified as available-for-sale, and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity. Premiums and discounts on fixed maturity securities are amortized using the effective interest method. Prepayment assumptions are reviewed periodically and adjusted to reflect actual prepayments and changes in expectations. Dividends on equity securities are recognized when declared. When the Company sells a security, the difference between the sale proceeds and amortized cost (determined based on specific identification) is reported as a realized investment gain or loss. When a decline in the value of a specific investment is other than temporary at the balance sheet date, a provision for impairment is charged to earnings (included in realized gains (losses) on investments) and the cost basis of that investment is reduced. If the Company can assert that it does not intend to sell an impaired fixed maturity security and it is not more likely than not that it will have to sell the security before recovery of its amortized cost basis, then the other-than-temporary impairment is separated into two components: (i) the amount related to credit losses (recorded in earnings), and (ii) the amount related to all other factors (recorded in accumulated other comprehensive income, or “AOCI”). The credit-related portion of any other-than-temporary impairment is measured by comparing a security’s amortized cost to the present value of its current expected cash flows discounted at its effective yield prior to the impairment charge. If the Company intends to sell an impaired security, or if it is more likely than not that the Company will be required to sell the security before recovery, an impairment charge to earnings is recorded to reduce the amortized cost of that security to fair value. In some cases, our debt investments may provide for a portion of the interest payable to be payment-in-kind (“PIK”) interest. To the extent interest is PIK, it is payable through the increase of the principal amount of the loan by the amount of the interest due on the then-outstanding principal amount of the loan. |
Commercial and Mortgage Loans and Loan Losses | Commercial and Mortgage Loans and Loan Losses We have potential exposure to transaction losses as a result of uncollectibility of commercial mortgage and other loans. We base our reserve estimates on prior charge-off history and currently available information that is indicative of a transaction loss. We reflect additions to the reserve in current operating results, while we make charges to the reserve when we incur losses. We reflect recoveries in the reserve for transaction losses as collected. We have the intent and ability to hold these loans to maturity or payoff, and as such, have classified these loans as held-for-investment. These loans are reported on the balance sheet at the outstanding principal balance adjusted for any charge-offs, allowance for loan losses, and deferred fees or costs. As of June 30, 2020, we have not recorded any charge-offs, and believe that an allowance for loan losses is not required. |
Advances Receivable | Advances Receivable In December 2018, we began purchasing participation interests in MCAs from third parties whose principal activity is originating MCAs to small businesses. MCAs are contracts formed through future receivables purchase and sale agreements, which stipulate the purchase price, or the amount advanced, and the specified amount, or the advance amount plus the factored receivable balance that will be repaid, on the face of the contract. Generally, a specified amount will be withdrawn from the merchant's bank account via daily or weekly automatic transactions in order to pay down the merchant's advance. These are not consumer loan contracts, nor are they installment loan contracts to businesses for business use only. In addition, there is no monthly minimum payment, nor is there a specific repayment schedule. |
Allowance for MCA credit losses | Allowance for MCA credit losses We establish an allowance for credit losses for MCAs at the time of funding through a provision for losses charged to our consolidated statement of operations. The provision amount is based on an analysis of our charge-off history and historical performance experienced by an industry peer group. Losses are charged against the allowance when management believes that the future collection in full of purchased receivables is unlikely. We review our MCA receivables on a regular basis and charge off any MCA receivables for which the merchant has not made a payment in 90 days or more. Subsequent recoveries, if any, are credited to the provision for credit losses on advances. The establishment of appropriate reserves is an inherently uncertain process, and ultimate losses may vary from the current estimates. We regularly update our reserve estimates as new facts become known and events occur that may affect the settlement or recovery of losses. In addition, new facts and circumstances may adversely affect our MCA portfolio resulting in increased delinquencies and losses and could require additional provisions for credit losses, which could impact future periods. |
Revenue Recognition | Revenue Recognition for MCA Syndication Fee Income We recognize revenue when our performance obligations with our customers have been satisfied. Our performance obligation is to facilitate funding for MCA originators through the LuxeMark Capital syndication network.The performance obligation is satisfied at a point in time when the syndicate participants provide MCA originators with capital by purchasing participation interests in funded MCAs. We determine the transaction price based on the fixed consideration in our contractual agreements, which do not contain any variable consideration. As we have identified only one distinct performance obligation, the transaction price is allocated entirely to this service. In determining the transaction price, a significant financing component does not exist, since the timing from when we perform this service to when the syndicate participants fund the MCA is less than one year, and we are not paid in advance for the performance of our services. We recognized $1,288,000 and $693,000 of syndication fee income during the fiscal years ended June 30, 2020 and 2019, respectively, which is included in MCA fees and other revenue on the accompanying consolidated statement of operations. Revenue Recognition - Advance Income We earn MCA income based on the amount advanced multiplied by the factor rate, net of any commissions or fees related to the participation. The factor rate is stipulated in the funding agreement, which is an agreement between the funder and the merchant. As repayments on the advances are received from the merchants, we apply a portion of the cash payment against the advanced amount, and the remaining portion of the cash payment is recognized as MCA income. We will cease recognizing MCA income when, in our opinion, the advanced amount is not probable of being collected. Revenue Recognition - Interest Income Interest income is earned on commercial mortgages and other loans based on the contractual terms of the loan. We evaluate loans for non-accrual status each reporting period. A loan is placed on a non-accrual status at the earlier of the date when the loan payment deficiencies exceed 90 days or when, in our opinion, the collection of interest in full becomes doubtful. Interest income recognition for non-accrual loans is generally resumed when the non-accrual loan is making current contractual interest payments. Loan origination fees are deferred and amortized to interest income, using the effective interest method, over the contractual life of the loan, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 310, Receivables. |
Land Investment | Land Investment Land investment assets are stated at acquired cost. Pre-acquisition and development costs are capitalized. Gains and losses resulting from the disposition of real estate are included in operations. As of June 30, 2020, all land held by the Company is considered to be held for use and development. |
Defined Benefit Pension Plan | Defined-Benefit Pension Plan We maintain defined-benefit pension plans (the “Pension Plans”) for a number of former employees (“participants”) of our German subsidiary. In 1998, the Pension Plans were closed to new employees, and no existing employees are eligible to participate, as all eligible participants are no longer employed by us. The Pension Plans provide benefits to be paid to all participants at retirement based primarily on years of service with the Company. Our policy is to fund benefits attributed to participants’ service to date. The determination of our Pension Plans’ benefit obligations and expenses is dependent on our selection of certain assumptions used by actuaries in calculating such amounts. Those assumptions include, among others, the weighted-average discount rate and the weighted-average expected rate of return on plan assets. To the extent that these assumptions change, our future benefit obligation and net periodic pension expense may be positively or negatively impacted. |
Basic and Diluted Earnings per Share | Basic and Diluted Earnings per Share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during each fiscal period. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during each fiscal period including dilutive common share equivalents. Under the treasury stock method, incremental shares representing the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued are included in the computation. Weighted-average common share equivalents of 8,123 and 10,004 for the fiscal years ended June 30, 2020 and 2019, respectively, were excluded from the calculation, as their effect would have been anti-dilutive. The following table presents a reconciliation of the numerators and denominators of basic and diluted net income per share for the periods indicated: Fiscal Year Ended June 30, 2020 2019 Basic weighted-average number of shares outstanding 8,772,969 8,941,413 Effect of dilutive securities: Restricted stock 59,550 17,049 Diluted weighted-average number of shares outstanding 8,832,519 8,958,462 |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly fashion between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, we consider the most advantageous market in which transactions would occur and we consider assumptions that market participants would use when pricing the asset or liability. ASC Topic 820, Fair Value Measurements and Disclosurs requires certain disclosures regarding fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which are determined by the lowest level input that is significant to the fair value measurement in its entirety. The levels are: · Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; · Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and · Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which include the use of management estimates. Our investment portfolio consists of money market funds, equity securities, mortgage loans, and corporate debt. All highly liquid investments with an original maturity of three months or less when purchased are considered to be cash equivalents. All cash equivalents are carried at cost less any unamortized premium or discount, which approximates fair value. All investments with original maturities of more than three months are classified as available-for-sale, trading, or held-to-maturity investments. Our marketable securities, other than equity securities, are classified as available-for-sale, and are reported at fair value, with unrealized gains and losses, net of tax, reported in stockholders’ equity as a component of accumulated other comprehensive income or loss. Interest on securities is reported in the accompanying consolidated statements of operations in interest income. Dividends paid by securities are reported in the accompanying consolidated statements of operations in other income. Realized gains or losses are reported in the accompanying consolidated statements of operations in net realized gain on investments. We used Level 3 inputs to determine the fair value of our preferred stock investments. The Company has elected the measurement alternative and will record the investments at cost adjusted for observable price changes for an identical or similar investment of the same issuer. Observable price changes and impairment indicators will be assessed each reporting period. We also used Level 3 inputs to determine the fair value of our contingent consideration and common stock purchase warrants related to our acquisition of the assets of Old LuxeMark (the “LuxeMark Acquisition”). The Company used a Monte Carlo simulation technique to value the performance-based contingent consideration and common stock purchase warrants. This technique is a probabilistic model which relies on repeated random sampling to obtain numerical results. We reduced the fair value of contingent consideration related to the LuxeMark Acquisition to zero as of June 30, 2020 as we reduced our funding of MCAs and the contingent consideration agreements and warrants were terminated on July 17, 2020. We provide fair value measurement disclosures of our available-for-sale securities in accordance with one of the three levels of fair value measurement. Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2020 and 2019 are as follows: Quoted As of Prices in Observable Unobservable June 30, 2020 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 4,473 $ 4,473 $ — $ — Money market funds 4,863 4,863 — — Cash and cash equivalents $ 9,336 $ 9,336 $ — $ — Common stock and common stock options $ 4,489 $ 4,489 $ — $ — Preferred stock 2,883 — — 2,883 Equity investments $ 7,372 $ 4,489 $ — $ 2,883 Corporate debt $ 21,429 $ — $ 21,429 $ — Available-for-sale investments $ 21,429 $ — $ 21,429 $ — Quoted As of Prices in Observable Unobservable June 30, 2019 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 5,223 $ 5,223 $ — $ — Money market funds 2,860 2,860 — — Cash and cash equivalents $ 8,083 $ 8,083 $ — $ — Common stock and common stock warrants 4,522 4,522 — — Preferred stock 2,883 — — 2,883 Equity investments $ 7,405 $ 4,522 $ — $ 2,883 Corporate debt $ 20,393 $ — $ 20,393 $ — Available-for-sale investments $ 20,393 $ — $ 20,393 $ — Contingent consideration - cash earn-out $ 2,890 $ — $ — $ 2,890 Contingent consideration - warrants 200 — — 200 Liabilities $ 3,090 $ — $ — $ 3,090 The carrying amounts of certain financial instruments, including cash equivalents and MCAs, approximate their fair values due to their short-term nature. Included in available for sale securities is a loan which we purchased from, and for which quotations are available on, the syndicated loan market. The fair value of our syndicated portion of this loan is $3,240,000 and $1,663,000 as of June 30, 2020 and 2019, respectively. The following table provides a reconciliation of the beginning and ending balances for the Company’s assets and obligations measured at fair value using Level 3 inputs: Assets Obligations Preferred Contingent Stock Consideration (Amounts in thousands) Balance at June 30, 2019 $ 2,883 $ 3,090 Fair value adjustment to contingent consideration (Note 6) — (3,090) Balance at June 30, 2020 $ 2,883 $ — The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable LMCS Business Unit Contingent cash payments $ — Monte Carlo simulations discount rate 10.5 % expected volatility 25.0 % drift rate 0.2 % credit spread 7.0 % Contingent warrants $ — Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 25.0 % risk free rate 0.4 % dividend yield 0.0 % The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable Contingent consideration Contingent cash payments $ 2,890 Monte Carlo simulations discount rate 12.0 % expected volatility 25.0 % drift rate 1.7 % credit spread 8.0 % Contingent warrants $ 200 Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 30.0 % risk free rate 2.6 % dividend yield 0.0 % As further described in Note 6 to these financial statements, we recorded impairment charges of $780,000 and $562,000 against the goodwill and definite-lived assets of our LMCS business unit, respectively, and also reduced the fair value of this business unit’s contingent cash payments and contingent warrants payable to Old LuxeMark from $3,090,000 to zero during our fiscal year ended June 30, 2020. The following table shows the valuation methodology for Level3 assets and liabilities measured at fair value as of June 30, 2020 ($ amounts in thousands): Fair Unobservable Range of Value Valuation Methodology Inputs Inputs LMCS Business Unit Goodwill $ 480 Discounted cash flows Weighted average cost of capital 27.0 % Investor/funder relationships $ 1,640 Multi-period excess earnings Discount rate 28.0 % Right of use leased asset $ 320 Discounted cash flows Discount rate 8.5 % Trade name $ 130 Relief from royalty Royalty rate 1.5 % Non-compete agreements $ 100 Discounted cash flows Discount rate 28.0 % |
Income Taxes | Income Taxes The Company and its domestic subsidiaries file a consolidated federal income tax return. All foreign subsidiaries file individual or consolidated tax returns pursuant to local tax laws. We follow the asset and liability method of accounting for income taxes. Under the asset and liability method, a deferred tax asset or liability is recognized for temporary differences between financial reporting and income tax basis of assets and liabilities, tax credit carryforwards, and operating loss carryforwards. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that such deferred tax assets will not be realized. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718‑10, Stock Compensation (“ASC 718‑10”), which requires the recognition of the fair value of stock compensation in the statement of operations. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. All our stock compensation is accounted for as equity instruments. Refer to Note 10 to the consolidated financial statements for assumptions used in calculation of fair value. |
Comprehensive Income | Comprehensive Income Comprehensive income is a more inclusive financial reporting methodology that includes disclosure of certain financial information that historically has not been recognized in the calculation of net income. Comprehensive income is defined as a change in equity during the financial reporting period of a business enterprise resulting from non-owner sources. Components of accumulated other comprehensive income are disclosed in the accompanying consolidated statements of comprehensive income (loss). |
Overview of the Business and _3
Overview of the Business and Basis of Presentation (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Schedule of reconciliation of the numerators and denominators of basic and diluted net income (loss) per share | The following table presents a reconciliation of the numerators and denominators of basic and diluted net income per share for the periods indicated: Fiscal Year Ended June 30, 2020 2019 Basic weighted-average number of shares outstanding 8,772,969 8,941,413 Effect of dilutive securities: Restricted stock 59,550 17,049 Diluted weighted-average number of shares outstanding 8,832,519 8,958,462 |
Schedule of financial assets and liabilities that were measured at fair value on a recurring basis | Our financial assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2020 and 2019 are as follows: Quoted As of Prices in Observable Unobservable June 30, 2020 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 4,473 $ 4,473 $ — $ — Money market funds 4,863 4,863 — — Cash and cash equivalents $ 9,336 $ 9,336 $ — $ — Common stock and common stock options $ 4,489 $ 4,489 $ — $ — Preferred stock 2,883 — — 2,883 Equity investments $ 7,372 $ 4,489 $ — $ 2,883 Corporate debt $ 21,429 $ — $ 21,429 $ — Available-for-sale investments $ 21,429 $ — $ 21,429 $ — Quoted As of Prices in Observable Unobservable June 30, 2019 Active Markets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) (Amounts in thousands) Cash $ 5,223 $ 5,223 $ — $ — Money market funds 2,860 2,860 — — Cash and cash equivalents $ 8,083 $ 8,083 $ — $ — Common stock and common stock warrants 4,522 4,522 — — Preferred stock 2,883 — — 2,883 Equity investments $ 7,405 $ 4,522 $ — $ 2,883 Corporate debt $ 20,393 $ — $ 20,393 $ — Available-for-sale investments $ 20,393 $ — $ 20,393 $ — Contingent consideration - cash earn-out $ 2,890 $ — $ — $ 2,890 Contingent consideration - warrants 200 — — 200 Liabilities $ 3,090 $ — $ — $ 3,090 |
Schedule of the Company's assets and obligations measured at fair value using Level 3 inputs | The following table provides a reconciliation of the beginning and ending balances for the Company’s assets and obligations measured at fair value using Level 3 inputs: Assets Obligations Preferred Contingent Stock Consideration (Amounts in thousands) Balance at June 30, 2019 $ 2,883 $ 3,090 Fair value adjustment to contingent consideration (Note 6) — (3,090) Balance at June 30, 2020 $ 2,883 $ — |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis | The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable LMCS Business Unit Contingent cash payments $ — Monte Carlo simulations discount rate 10.5 % expected volatility 25.0 % drift rate 0.2 % credit spread 7.0 % Contingent warrants $ — Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 25.0 % risk free rate 0.4 % dividend yield 0.0 % The following table shows the valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, 2019 ($ amounts in thousands): Unobservable Range of Fair Value Valuation Methodology Inputs Inputs Equity securities, fair value Preferred stock $ 2,883 cost, or observable price changes not applicable not applicable Contingent consideration Contingent cash payments $ 2,890 Monte Carlo simulations discount rate 12.0 % expected volatility 25.0 % drift rate 1.7 % credit spread 8.0 % Contingent warrants $ 200 Black-Scholes, Monte Carlo simulations expected term 6.25 years expected volatility 30.0 % risk free rate 2.6 % dividend yield 0.0 % |
Lm Capital Solutions Llc [Member] | |
Schedule of valuation methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis | As further described in Note 6 to these financial statements, we recorded impairment charges of $780,000 and $562,000 against the goodwill and definite-lived assets of our LMCS business unit, respectively, and also reduced the fair value of this business unit’s contingent cash payments and contingent warrants payable to Old LuxeMark from $3,090,000 to zero during our fiscal year ended June 30, 2020. The following table shows the valuation methodology for Level3 assets and liabilities measured at fair value as of June 30, 2020 ($ amounts in thousands): Fair Unobservable Range of Value Valuation Methodology Inputs Inputs LMCS Business Unit Goodwill $ 480 Discounted cash flows Weighted average cost of capital 27.0 % Investor/funder relationships $ 1,640 Multi-period excess earnings Discount rate 28.0 % Right of use leased asset $ 320 Discounted cash flows Discount rate 8.5 % Trade name $ 130 Relief from royalty Royalty rate 1.5 % Non-compete agreements $ 100 Discounted cash flows Discount rate 28.0 % |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Investments | |
Schedule of fixed maturity and equity securities | Unrealized Unrealized June 30, 2020 Cost Gains Losses Fair Value (Amounts in thousands) Equity securities Common stock and common stock options $ 6,746 $ 203 $ (2,460) $ 4,489 Preferred stock 2,883 — — 2,883 Total equity securities $ 9,629 $ 203 $ (2,460) $ 7,372 Amortized Unrealized Unrealized Cost Gains Losses Fair Value Fixed-maturity securities Corporate debt $ 26,594 $ 455 $ (5,620) $ 21,429 Total fixed-maturity securities $ 26,594 $ 455 $ (5,620) $ 21,429 Unrealized Unrealized June 30, 2019 Cost Gains Losses Fair Value (Amounts in thousands) Equity securities Common stock $ 5,706 $ — $ (1,185) $ 4,521 Common stock warrants 288 — (287) 1 Preferred stock 2,883 — — 2,883 Total equity securities $ 8,877 $ — $ (1,472) $ 7,405 Amortized Unrealized Unrealized Cost Gains Losses Fair Value Fixed-maturity securities Corporate debt $ 25,761 $ — $ (5,368) $ 20,393 Total fixed-maturity securities $ 25,761 $ — $ (5,368) $ 20,393 |
Schedule of maturity of fixed maturity securities available for sale | Fixed Maturity Securities Amortized Cost Fair Value (Amounts in thousands) Due after one year through three years $ 18,512 $ 14,269 Due after three years through five years — — Due after five years through 10 years 8,082 7,160 Total fixed-maturity securities $ 26,594 $ 21,429 |
Mortgage and Commercial Loans_2
Mortgage and Commercial Loans Receivable (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Summary of loan activity | A summary of loan activity to MCA originators for the period is as follows (amounts in thousands): Other Loans Receivable Balance at July 1, 2018 $ — Additions during the period: Borrowings 5,623 Deductions during the period: Collections of principal (2,873) Balance at July 1, 2019 $ 2,750 Additions during the period: Borrowings 2,750 Deductions during the period: Collections of principal (1,622) Balance at June 30, 2020 $ 3,878 |
Mortgage Receivable [Member] | |
Schedule of mortgage and commercial loans receivable | Deferred Fees/ Accrued Carrying Mortgage Loans Receivable Principal Balance Prepaid Interest Interest Value (Amounts in thousands) Balance at July 1, 2018 $ 3,005 $ — $ — $ 3,005 Additions during the period: New mortgage loans 4,110 (84) 3 4,029 Deductions during the period: Collections of principal (2,920) — — (2,920) Balance at July 1, 2019 $ 4,195 $ (84) $ 3 $ 4,114 Additions during the period: Fundings of mortgage loans 75 — — 75 Additions to deferred fees — (95) — (95) Amortization of deferred fees — 93 — 93 Interest due at maturity — — 40 40 Deductions during the period: Collections of principal (2,532) — — (2,532) Balance at June 30, 2020 $ 1,738 $ (86) $ 43 $ 1,695 |
Advances Receivable, net (Table
Advances Receivable, net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Advances Receivable, net | |
Schedule of advances receivable | Total advances receivable, net, as of June 30, 2020, consisted of the following: Provision Advance Deferred for Credit Carrying Principal Fees Losses Value (Amounts in thousands) Merchant cash advances $ 1,919 $ — $ (124) $ 1,795 Aviation advances 10,000 (359) — 9,641 Advances receivable, net $ 11,919 $ (359) $ (124) $ 11,436 Total advances receivable, net, as of June 30, 2019, consisted of the following: Provision Advance Deferred for Credit Carrying Principal Fees Losses Value (Amounts in thousands) Merchant cash advances $ 7,434 $ — $ (736) $ 6,698 Aviation advances 2,750 (59) — 2,691 Advances receivable, net $ 10,184 $ (59) $ (736) $ 9,389 |
Allowance for Credit Losses on Financing Receivables | Changes in the allowance for MCA credit losses are as follows (amounts in thousands): Allowance for credit losses, July 1, 2018 $ — Provision for credit losses 1,605 Receivables charged off (869) Allowance for credit losses, July 1, 2019 $ 736 Provision for credit losses 849 Receivables charged off (1,624) Recoveries of receivables previously charged off 162 Effects of exchange rate differences 1 Allowance for credit losses, June 30, 2020 $ 124 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets | |
Schedule of definite-lived intangible assets and goodwill | Fiscal Year Ended June 30, 2020 Remaining Current Period Less: Useful Gross Impairment Accumulated Life Value Charge Amortization Total Trade names 10 years $ 180 $ (25) $ (25) $ 130 Non-competition agreements 1 year 790 (473) (217) 100 Investor/Funder relationships 6 years 2,120 (64) (416) 1,640 Definite lived intangible assets $ 3,090 $ (562) $ (658) $ 1,870 Goodwill $ 1,260 $ (780) $ — $ 480 Fiscal Year Ended June 30, 2019 Current Period Less: Gross Impairment Accumulated Value Charge Amortization Total Trade names $ 180 $ — $ (7) $ 173 Non-competition agreements 790 — (59) 731 Investor/Funder relationships 2,120 — (114) 2,006 Definite lived intangible assets $ 3,090 $ — $ (180) $ 2,910 Goodwill $ 1,260 $ — $ — $ 1,260 |
Schedule of amortization of definite-lived intangibles | At June 30, 2020, amortization of definite-lived intangibles for the next five years is expected to be as follows (amounts in thousands): Fiscal Year Ending June 30 Amount 2021 386 2022 287 2023 286 2024 286 2025 286 Thereafter 339 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Expenses | |
Schedule of accounts payable and accrued expenses | Accounts payable and accrued expenses consisted of the following: June 30, June 30, 2020 2019 (Amounts in thousands) Accounts payable, trade $ 294 $ 221 Lease liability - current 225 153 Dividends payable, short-term portion 53 1 Unrecognized income from research and development tax credits 35 35 Accrued compensation 29 56 Other accrued expenses 167 194 Total accounts payable and accrued expenses $ 803 $ 660 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Taxes | |
Schedule of components of income from operations | The domestic and foreign components of income from continuing operations before income taxes are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 United States $ 7,151 $ 750 Foreign (152) (160) Income from operations $ 6,999 $ 590 |
Schedule of components of the (benefit) provision for income taxes | The components of the (benefit) provision for income taxes are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Current: Federal $ — $ (19) State 651 34 Foreign — — Total current $ 651 $ 15 Deferred Federal $ (6,409) $ 6 State (272) 19 Foreign — — Total deferred $ (6,681) $ 25 Total $ (6,030) $ 40 |
Schedule of reconciliation of the income tax (benefit) expense | Fiscal Year Ended June 30, 2020 2019 (Amounts in thousands) Provision at federal statutory rate $ 1,470 $ 124 Change in valuation allowance (8,738) (1,709) Permanent differences 1 3 Net operating loss expiration and adjustment 521 2,284 Change in state tax rates 291 (244) Change in uncertain tax positions 131 6 Foreign rate differential (15) (16) State and foreign tax expense 419 77 (Income) loss attributable to non-controlling interest (178) 28 Other 68 (513) (Benefit) provision for income taxes $ (6,030) $ 40 |
Schedule of deferred tax assets and liabilities | June 30, 2020 2019 (Amounts in thousands) Deferred tax assets related to: U. S. and foreign net operating loss carryforwards $ 14,388 $ 16,017 Accrued compensation 1,222 1,262 Unrealized gain/loss on investments 1,751 1,828 Partnership investment — 237 U. S. credit carryforwards 751 1,225 Stock compensation 919 190 Acquisition costs 62 75 Other 85 76 Deferred tax assets 19,178 20,910 Valuation allowance (11,697) (20,435) Total deferred tax assets $ 7,481 $ 475 Deferred tax liabilities related to: Partnership investment $ 151 $ — Bond interest accretion 698 — Deferred tax liabilities 849 — Total deferred tax liabilities $ 849 $ — Deferred income taxes (net) $ 6,632 $ 475 |
Summary of unrecognized tax benefits | A reconciliation of the beginning and ending amount of our unrecognized tax benefits for the fiscal years ended June 30, 2020 and 2019 is as follows (amounts in thousands): Balance at July 1, 2018 $ 251 Activity for year ended June 30, 2019 — Balance at June 30, 2019 251 Increase related to tax positions - Current year 121 Balance at June 30, 2020 $ 372 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Stock-Based Compensation | |
Summary of Activity of Restricted Shares | Weighted- Average Grant Date Restricted Stock Awards Shares Fair Value Non-vested at July 1, 2019 167,500 $ 4.15 Granted 100,026 4.90 Vested (58,336) 4.13 Forfeited (5,000) 5.42 Non-vested at June 30, 2020 204,190 $ 4.41 |
Pensions and Other Postretire_2
Pensions and Other Postretirement Benefits (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Pensions and Other Postretirement Benefits | |
Schedule of Obligations and Funded Status | A reconciliation of the changes in the Pension Plans’ benefit obligations and fair value of plan assets over the two-year period ended June 30, 2020, and a statement of the funded status at June 30, 2020 and 2019, respectively, for the Pension Plans, is as follows: Obligations and Funded Status June 30, 2020 2019 (Amounts in thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,702 $ 4,581 Interest cost 30 60 Actuarial (gain) loss (79) 432 Foreign currency exchange rate change (60) (123) Benefits paid (241) (248) Benefit obligation at end of year $ 4,352 $ 4,702 Change in plan assets: Fair value of plan assets at beginning of year $ 560 $ 809 Actual return on plan assets 6 1 Employer contributions 21 13 Benefits paid (235) (242) Foreign currency exchange rate change (10) (21) Fair value of plan assets at end of year $ 342 $ 560 Funded status at end of year $ (4,010) $ (4,142) |
Schedule of Amounts Recognized in Consolidated Balance Sheets | Amounts Recognized in the Consolidated Balance Sheets June 30, 2020 2019 (Amounts in thousands) Other accrued expenses (1) $ (5) $ (6) Pension liability - long-term liabilities (4,005) (4,136) Total pension liability $ (4,010) $ (4,142) Accumulated other comprehensive loss $ (1,517) $ (1,707) (1) Included in line item accounts payable and accrued expenses |
Schedule of Items Not Yet Recognized as Component of Net Periodic Pension Cost | Items Not Yet Recognized as a Component of Net Periodic Pension Cost: June 30, 2020 2019 (Amounts in thousands) Unrecognized actuarial losses $ 1,517 $ 1,707 $ 1,517 $ 1,707 |
Schedule of Accumulated Benefit Obligation in Excess of Plan Assets | Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets: June 30, 2020 2019 (Amounts in thousands) Projected benefit obligation $ 4,352 $ 4,702 Accumulated benefit obligation 4,352 4,702 Fair value of plan assets 342 560 |
Schedule of Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income | Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Net Periodic Benefit Cost Interest cost $ 30 $ 60 Expected return on plan assets (5) (5) Recognized actuarial loss 89 64 Net periodic benefit cost $ 114 $ 119 |
Schedule of Assumptions Benefit | The following table sets forth the assumptions used to determine benefit obligations: June 30, 2020 2019 Discount rate 0.86 % 0.67 % Expected return on plan assets 3.00 % 3.00 % Compensation increase rate 0.00 % 0.00 % The following table sets forth the assumptions used to determine net periodic benefit cost: Fiscal Year Ended June 30, 2020 2019 Discount rate 0.67 % 1.37 % Expected return on plan assets 3.00 % 2.00 % Compensation increase rate 0.00 % 0.00 % |
Summary of Changes in Fair Value of Plan Assets | The following table sets forth, by level within the fair value hierarchy, a summary of the Pension Plans' assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2020: Percentage of Total Plan Assets Level 1 Level 2 Level 3 Assets 2020 (Amounts in thousands) Asset Category: Cash and cash equivalents $ 46 $ — $ — $ 46 13.5 % Cash surrender value insurance contracts — 296 — 296 86.5 % Totals $ 46 $ 296 $ — $ 342 100.0 % The following table sets forth, by level within the fair value hierarchy, a summary of the Pension Plan’s assets measured at fair value, as well as the percentage of total plan assets for each category at June 30, 2019: Percentage of Total Plan Assets Level 1 Level 2 Level 3 Assets 2019 (Amounts in thousands) Asset Category: Cash and cash equivalents $ 32 $ — $ — $ 32 5.7 % Cash surrender value insurance contracts — 528 — 528 94.3 % Totals $ 32 $ 528 $ — $ 560 100.0 % |
Schedule of Estimated Future Benefit Payments | Expected benefit payments, which reflect expected future service, during the next ten fiscal years ending June 30, are as follows (amounts in thousands): Pension Benefits 2021 $ 244 2022 241 2023 238 2024 238 2025 243 2026 - 2030 1,147 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accumulated Other Comprehensive (Loss) Income | |
Schedule of Accumulated Other Comprehensive Income (Loss) Income | The following table summarizes the changes in accumulated other comprehensive (loss) income by component, net of taxes, for the fiscal year ended June 30, 2020: Pension and Postretirement Currency Unrealized Benefit Translation Loss Plans Adjustments on Investments Total (Amounts in thousands) Balance at June 30, 2019 $ (1,707) $ 496 $ (5,368) $ (6,579) Other comprehensive income 167 50 203 420 Effect of deferred taxes on unrealized losses — — (47) (47) Effect of exchange rates on the pension plans 23 (23) — — Net current period other comprehensive income 190 27 156 373 Balance at June 30, 2020 $ (1,517) $ 523 $ (5,212) $ (6,206) |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Acquisition | |
Schedule of Business Acquisitions, by Acquisition | Cash consideration $ 1,212 Equity consideration - 20% membership interest in LMCS 893 Equity consideration - warrants to purchase CCUR common stock 200 Fair value of contingent consideration 2,160 Total purchase consideration $ 4,465 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Accounts receivable $ 153 Intangible assets 3,090 Goodwill 1,260 Total assets acquired 4,503 Accrued commission 38 Total liabilities assumed 38 Net assets acquired $ 4,465 |
Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Weighted- Average Amortization Fair Value Period (Years) Trade name $ 180 10.0 Non-competition agreements 790 5.0 Investor/funder relationships 2,120 7.0 Total $ 3,090 6.7 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Segments | |
Schedule of Segment operating results | Segment operating results are as follows (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Segment revenue: MCA advance income $ 3,240 $ 1,694 Syndication fees 1,288 693 Interest on loans to MCA originators 887 117 Other MCA revenue 154 93 MCA operations revenues 5,569 2,597 Real estate operations revenues 304 859 Consolidated revenues 5,873 3,456 Segment operating expenses: Selling, general and administrative 1,091 562 Impairment of goodwill and long-lived assets 1,395 — Change in fair value of contingent consideration (3,090) 730 Amortization of purchased intangibles 479 180 Provision for credit losses on advances 849 1,095 MCA operations 724 2,567 Real estate operations — — Add: Corporate expenses 6,640 3,646 Consolidated operating expenses 7,364 6,213 Segment operating income (loss): MCA operations 4,845 30 Real estate operations 304 859 Add: Corporate (6,640) (3,646) Consolidated operating income (loss) $ (1,491) $ (2,757) |
Schedule of Segment assets | June 30, June 30, 2020 2019 (Amounts in thousands) Segment Assets MCA $ 19,287 $ 18,277 Real estate 9,275 7,379 Add: Corporate assets 48,065 47,190 Corporate intercompany loan to LMCS (6,777) (10,372) Total consolidated assets $ 69,850 $ 62,474 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Leases | |
Schedule of financial statements related to leases | The following information represents the amounts included in the financial statements related to leases (amounts in thousands): Fiscal Year Ended June 30, 2020 2019 Operating lease cost $ 236 $ 56 Gross sublease income 143 33 Operating cash flows from operating leases (93) (23) |
Schedule of lease payments for operating leases | At June 30, 2020, lease payments for operating leases for the next five years are as follows (amounts in thousands): Fiscal Year Ending June 30 Amount 2021 250 2022 258 2023 123 2024 79 2025 81 |
Overview of the Business and _4
Overview of the Business and Basis of Presentation - Numerators and denominators of basic and diluted (Details) - shares | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Overview of the Business and Basis of Presentation | ||
Basic weighted average number of shares outstanding | 8,772,969 | 8,941,413 |
Effect of dilutive securities: | ||
Restricted stock | 59,550 | 17,049 |
Diluted weighted average number of shares outstanding | 8,832,519 | 8,958,462 |
Overview of the Business and _5
Overview of the Business and Basis of Presentation - Financial assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Assets, Fair value | $ 3,090 | |
Common Stock [Member] | ||
Assets, Fair value | $ 4,489 | 4,522 |
Preferred Stock [Member] | ||
Assets, Fair value | 2,883 | 2,883 |
Available-for-sale Securities [Member] | ||
Assets, Fair value | 21,429 | 20,393 |
Cash and Cash Equivalents [Member] | ||
Assets, Fair value | 9,336 | 8,083 |
Corporate Debt Securities [Member] | ||
Assets, Fair value | 21,429 | 20,393 |
Cash [Member] | ||
Assets, Fair value | 4,473 | 5,223 |
Money Market Funds [Member] | ||
Assets, Fair value | 4,863 | 2,860 |
Equity Method Investments [Member] | ||
Assets, Fair value | 7,372 | 7,405 |
Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair value | 0 | |
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member] | ||
Assets, Fair value | 4,489 | 4,522 |
Fair Value, Inputs, Level 1 [Member] | Preferred Stock [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Available-for-sale Securities [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member] | ||
Assets, Fair value | 9,336 | 8,083 |
Fair Value, Inputs, Level 1 [Member] | Corporate Debt Securities [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Cash [Member] | ||
Assets, Fair value | 4,473 | 5,223 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Assets, Fair value | 4,863 | 2,860 |
Fair Value, Inputs, Level 1 [Member] | Equity Method Investments [Member] | ||
Assets, Fair value | 4,489 | 4,522 |
Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair value | 0 | |
Fair Value, Inputs, Level 2 [Member] | Common Stock [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Preferred Stock [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Available-for-sale Securities [Member] | ||
Assets, Fair value | 21,429 | 20,393 |
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | ||
Assets, Fair value | 21,429 | 20,393 |
Fair Value, Inputs, Level 2 [Member] | Cash [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Equity Method Investments [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | 3,090 | |
Fair Value, Inputs, Level 3 [Member] | Contingent cash payments | ||
Liabilities, Fair value | 2,890 | |
Fair Value, Inputs, Level 3 [Member] | Contingent warrants | ||
Liabilities, Fair value | 200 | |
Fair Value, Inputs, Level 3 [Member] | Common Stock [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Preferred Stock [Member] | ||
Assets, Fair value | 2,883 | 2,883 |
Fair Value, Inputs, Level 3 [Member] | Available-for-sale Securities [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Cash and Cash Equivalents [Member] | ||
Assets, Fair value | 0 | |
Fair Value, Inputs, Level 3 [Member] | Corporate Debt Securities [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Cash [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | ||
Assets, Fair value | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Commercial Paper [Member] | Cash and Cash Equivalents [Member] | ||
Assets, Fair value | 0 | |
Fair Value, Inputs, Level 3 [Member] | Equity Method Investments [Member] | ||
Assets, Fair value | $ 2,883 | 2,883 |
Contingent cash payments | ||
Assets, Fair value | 2,890 | |
Contingent cash payments | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair value | 0 | |
Contingent cash payments | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair value | 0 | |
Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | 2,890 | |
Contingent warrants | ||
Assets, Fair value | 200 | |
Contingent warrants | Fair Value, Inputs, Level 1 [Member] | ||
Assets, Fair value | 0 | |
Contingent warrants | Fair Value, Inputs, Level 2 [Member] | ||
Assets, Fair value | 0 | |
Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | $ 200 |
Overview of the Business and _6
Overview of the Business and Basis of Presentation - Assets and obligations measured at fair value using Level 3 (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Contingent cash payments | |
Balance at June 30, 2019 | $ 3,090 |
Fair value adjustment to contingent consideration (Note 6) | (3,090) |
Balance at June 30, 2020 | 0 |
Preferred Stock [Member] | |
Balance at June 30, 2019 | 2,883 |
Fair value adjustment to contingent consideration (Note 6) | 0 |
Balance at June 30, 2020 | $ 2,883 |
Overview of the Business and _7
Overview of the Business and Basis of Presentation - Valuation methodology and unobservable inputs (Details) $ in Thousands | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) |
Assets, Fair value | $ 3,090 | |
Preferred Stock [Member] | ||
Assets, Fair value | $ 2,883 | 2,883 |
Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | 3,090 | |
Fair Value, Inputs, Level 3 [Member] | Preferred Stock [Member] | ||
Assets, Fair value | 2,883 | 2,883 |
Contingent cash payments | ||
Assets, Fair value | 2,890 | |
Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | 2,890 | |
Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Liabilities, Fair value | 0 | |
Contingent warrants | ||
Assets, Fair value | 200 | |
Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Assets, Fair value | $ 200 | |
Contingent warrants | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Liabilities, Fair value | $ 0 | |
Discount rate | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Contingent cash payments | 12 | |
Discount rate | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent cash payments | 10.5 | |
Measurement Input, Expected Term [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Contingent warrants | 6.25 | |
Measurement Input, Expected Term [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent warrants | 6.25 | |
Measurement Input, Option Volatility [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Contingent cash payments | 25 | |
Measurement Input, Option Volatility [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent cash payments | 25 | |
Measurement Input, Option Volatility [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Contingent warrants | 30 | |
Measurement Input, Option Volatility [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent warrants | 25 | |
Measurement Input Drift Rate [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Contingent cash payments | 1.7 | |
Measurement Input Drift Rate [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent cash payments | 0.2 | |
Measurement Input, Credit Spread [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | ||
Contingent cash payments | 8 | |
Measurement Input, Credit Spread [Member] | Monte Carlo simulations [Member] | Contingent cash payments | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent cash payments | 7 | |
Measurement Input, Risk Free Interest Rate [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Contingent warrants | 2.6 | |
Measurement Input, Risk Free Interest Rate [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent warrants | 0.4 | |
Measurement Input Dividend Yield [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | ||
Contingent warrants | 0 | |
Measurement Input Dividend Yield [Member] | BlackScholes Monte Carlo Simulations [Member] | Contingent warrants | Fair Value, Inputs, Level 3 [Member] | Lm Capital Solutions Llc [Member] | ||
Contingent warrants | 0 |
Overview of the Business and _8
Overview of the Business and Basis of Presentation - Valuation methodology and unobservable inputs of LMCS Business Unit (Details) | 12 Months Ended | ||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 29, 2020USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impairment charges on goodwill | $ 780,000 | $ 0 | |
Current Period Impairment Charge | 562,000 | 0 | |
Gross Value | 3,090,000 | 3,090,000 | |
Trade names | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Current Period Impairment Charge | 25,000 | 0 | |
Gross Value | 180,000 | 180,000 | |
Non-competition agreements | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Current Period Impairment Charge | 473,000 | 0 | |
Gross Value | 790,000 | $ 790,000 | |
Lm Capital Solutions Llc [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Impairment charges on goodwill | 780,000 | ||
Current Period Impairment Charge | 562,000 | ||
Gross Value | 0 | $ 3,090,000 | |
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Goodwill | 480,000 | ||
Right of use leased asset | $ 320,000 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Discounted cash flows | Weighted average cost of capital | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Goodwill | 27 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Discounted cash flows | Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Right of use leased asset | 8.5 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Investor/ funder relationships [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | $ 1,640,000 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Investor/ funder relationships [Member] | Multi-period excess earnings | Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | 28 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Trade names | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | $ 130,000 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Trade names | Relief from royalty | Royalty rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | 1.5 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Non-competition agreements | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | $ 100,000 | ||
Lm Capital Solutions Llc [Member] | Fair Value, Inputs, Level 3 [Member] | Non-competition agreements | Discounted cash flows | Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Intangible asset | 28 |
Overview of Business and Basis
Overview of Business and Basis of Presentation - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 17, 2020 | Jul. 16, 2020 | |
MCA fees and other revenue | $ 5,873,000 | $ 3,456,000 | |||
Weighted average common share | 8,123 | 10,004 | |||
One-time dividend declared and paid | $ 0.50 | ||||
Cash dividends paid | $ 4,411,000 | ||||
Fair value of syndicated portion of loan | $ 3,240,000 | $ 1,663,000 | |||
Lm Capital Solutions Llc [Member] | |||||
Ownership percentage | 80.00% | ||||
Lm Capital Solutions Llc [Member] | Subsequent event | |||||
Ownership percentage | 51.00% | 80.00% | |||
Right to purchase equity interest ownership | 51.00% | ||||
AZOKKB, LLC [Member] | |||||
Noncontrolling interest | 20.00% | ||||
Syndication fees [Member} | |||||
MCA fees and other revenue | $ 1,288,000 | $ 693,000 |
Recent Accounting Guidance (Det
Recent Accounting Guidance (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Adoption of ASU 2016-01 | $ (318) |
Accumulated Other Comprehensive Income (Loss) [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Adoption of ASU 2016-01 | $ (318) |
Investments -Fixed-maturity and
Investments -Fixed-maturity and equity securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Equity Securities, Costs | $ 9,629 | $ 8,877 |
Fixed Maturity Securities, Costs | 26,594 | 25,761 |
Equity Securities, Unrealized Gains | 203 | 0 |
Fixed Maturity Securities, Unrealized Gains | 455 | 0 |
Equity Securities, Unrealized Losses | (2,460) | (1,472) |
Fixed Maturity Securities, Unrealized Losses | (5,620) | (5,368) |
Equity Securities, Fair Value | 7,372 | 7,405 |
Fixed Maturity Securities, Fair Value | 21,429 | 20,393 |
Common Stock [Member] | ||
Equity Securities, Costs | 6,746 | 5,706 |
Equity Securities, Unrealized Gains | 203 | 0 |
Equity Securities, Unrealized Losses | (2,460) | (1,185) |
Equity Securities, Fair Value | 4,489 | 4,521 |
Contingent warrants | ||
Equity Securities, Costs | 288 | |
Equity Securities, Unrealized Gains | 0 | |
Equity Securities, Unrealized Losses | (287) | |
Equity Securities, Fair Value | 1 | |
Preferred Stock [Member] | ||
Equity Securities, Costs | 2,883 | 2,883 |
Equity Securities, Unrealized Gains | 0 | 0 |
Equity Securities, Unrealized Losses | 0 | 0 |
Equity Securities, Fair Value | 2,883 | 2,883 |
Corporate Debt Securities [Member] | ||
Fixed Maturity Securities, Costs | 26,594 | 25,761 |
Fixed Maturity Securities, Unrealized Gains | 455 | 0 |
Fixed Maturity Securities, Unrealized Losses | (5,620) | (5,368) |
Fixed Maturity Securities, Fair Value | $ 21,429 | $ 20,393 |
Investments - Fixed-maturity se
Investments - Fixed-maturity securities available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Investments | ||
Fixed maturity securities Due after one year through three years Amortized Cost | $ 18,512 | |
Fixed maturity securities Due after three years through five years Amortized Cost | 0 | |
Fixed maturity securities Due after five years through 10 years Amortized Cost | 8,082 | |
Fixed Maturity Securities, Costs | 26,594 | $ 25,761 |
Fixed maturity securities Due after one year through three years Fair Value | 14,269 | |
Fixed maturity securities Due after three years through five years Fair Value | 0 | |
Fixed maturity securities Due after five years through 10 years Fair Value | 7,160 | |
Fixed maturity securities, available-for-sale, fair value | $ 21,429 | $ 20,393 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Investments | ||
Unrealized loss on equity securities, net | $ 785,000 | $ 1,785,000 |
Realized gain on the sale of debt and equity securities | $ 2,252,000 | $ 467,000 |
Mortgage and Commercial Loans_3
Mortgage and Commercial Loans Receivable - Components, RF (Details) - Mortgage Receivable [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Principal Balance at beginning of period | $ 4,195 | $ 3,005 |
Deferred Fees/ Prepaid Interest Balance at beginning of period | (84) | |
Accrued Interest Balance at beginning of period | 3 | |
Principal Balance and Carrying Value Balance at beginning of period | 4,114 | 3,005 |
Additions during the period: | ||
Fundings of mortgage loans, Principal Balance | 75 | |
New mortgage loans | 4,110 | |
Deductions during the period: | ||
Collections of principal | (2,532) | (2,920) |
Additions during the period: | ||
Additions to deferred fees, Deferred Fees | (95) | (84) |
Amortization of deferred fees, Deferred Fees | 93 | |
Additions during the period: | ||
Interest due at maturity, Provision for Loan Loss | 40 | 3 |
Additions during the period: | ||
New mortgage loans | 4,029 | |
Fundings of mortgage loans, Carrying Value | 75 | |
Additions to deferred fees | (95) | |
Amortization of deferred fees, Carrying Value | 93 | |
Interest due at maturity, Carrying value | 40 | |
Deductions during the period: | ||
Collections of principal | (2,532) | (2,920) |
Principal Balance at end of period | 1,738 | 4,195 |
Deferred Fees/ Prepaid Interest Balance at end of period | (86) | (84) |
Accrued Interest Balance at end of period | 43 | 3 |
Principal Balance and Carrying Value Balance at end of period | $ 1,695 | $ 4,114 |
Mortgage and Commercial Loans_4
Mortgage and Commercial Loans Receivable - Commercial Loan/credit facility (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Commercial Loan Assets [Member] | ||
Deductions during the period: | ||
Principal Balance and Carrying Value Balance at end of period | $ 5,573 | |
Commercial Loan [Member] | ||
Principal Balance and Carrying Value Balance at beginning of period | 2,750 | |
Additions during the period: | ||
Borrowings | 2,750 | $ 5,623 |
Deductions during the period: | ||
Collections of principal | (1,622) | (2,873) |
Principal Balance and Carrying Value Balance at end of period | $ 3,878 | $ 2,750 |
MCA originator [Member] | ||
Interest term (in years) | 2 years | |
Stated percentage | 17.00% |
Advances Receivable, net - Tota
Advances Receivable, net - Total advances receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Advance Principal | $ 11,919 | $ 10,184 |
Deferred Fees | (359) | (59) |
Provision for Credit Losses | (124) | (736) |
Carrying Value | 11,436 | 9,389 |
Merchant Cash Advances [Member] | ||
Advance Principal | 1,919 | 7,434 |
Deferred Fees | 0 | |
Provision for Credit Losses | (124) | (736) |
Carrying Value | 1,795 | 6,698 |
Aviation Advance [Member] | ||
Advance Principal | 10,000 | 2,750 |
Deferred Fees | (359) | (59) |
Provision for Credit Losses | 0 | |
Carrying Value | $ 9,641 | $ 2,691 |
Advances Receivable, net - Chan
Advances Receivable, net - Changes in the allowance for MCA credit losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Advances Receivable, net | ||
Allowance for credit losses, Beginning balance | $ 736 | $ 0 |
Provision for credit losses | 849 | 1,605 |
Receivables charged off | (1,624) | (869) |
Recoveries of receivables previously charged off | 162 | |
Effects of exchange rate differences | 1 | |
Allowance for credit losses, Ending balance | $ 124 | $ 736 |
Advances Receivable, net - Addi
Advances Receivable, net - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Participation interest | 100.00% | 97.00% |
Collection in advance | $ 11,250,000 | |
Aircraft Purchasers Deposits | ||
Cash advances | $ 17,474,000 | $ 4,750,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Definite-lived intangible assets and goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Value | $ 3,090 | $ 3,090 |
Current Period Impairment Charge | (562) | 0 |
Less: Accumulated Amortization | (658) | (180) |
Total | 1,870 | 2,910 |
Goodwill, Gross | 1,260 | 1,260 |
Goodwill, Impairment Loss | (780) | 0 |
Goodwill, Impaired, Accumulated Impairment Loss | 0 | 0 |
Goodwill, Total | $ 480 | 1,260 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Useful Life | 10 years | |
Gross Value | $ 180 | 180 |
Current Period Impairment Charge | (25) | 0 |
Less: Accumulated Amortization | (25) | (7) |
Total | $ 130 | 173 |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Useful Life | 1 year | |
Gross Value | $ 790 | 790 |
Current Period Impairment Charge | (473) | 0 |
Less: Accumulated Amortization | (217) | (59) |
Total | $ 100 | 731 |
Investor/Funder relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining Useful Life | 6 years | |
Gross Value | $ 2,120 | 2,120 |
Current Period Impairment Charge | (64) | 0 |
Less: Accumulated Amortization | (416) | (114) |
Total | $ 1,640 | $ 2,006 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Amortization of definite-lived intangibles (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Amortization of definite-lived intangibles | |
2021 | $ 386 |
2022 | 287 |
2023 | 286 |
2024 | 286 |
2025 | 286 |
Thereafter | $ 339 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill and Intangible Assets | ||
Change in fair value of contingent consideration | $ (3,090) | $ 730 |
Reduced the estimated fair value of contingent consideration payable to | $ 0 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Accounts Payable and Accrued Expenses | ||
Accounts payable, trade | $ 294 | $ 221 |
Lease liability - current | 225 | 153 |
Dividends payable, short-term portion | 53 | 1 |
Unrecognized income from research and development tax credits | 35 | 35 |
Accrued compensation | 29 | 56 |
Other accrued expenses | 167 | 194 |
Total accounts payable and accrued expenses | $ 803 | $ 660 |
Term Loan (Details)
Term Loan (Details) - Term Loan [Member] - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Term Loan | ||
Loan term (in years) | 18 months | |
Debt instrument, face amount | $ 1,600,000 | |
Interest rate (as a percent) | 5.25% | |
Interest costs capitalized | $ 57,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes | ||
United States | $ 7,151 | $ 750 |
Foreign | (152) | (160) |
Income from operations | $ 6,999 | $ 590 |
Income Taxes - Component of (be
Income Taxes - Component of (benefit) provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Current: | ||
Federal | $ 0 | $ (19) |
State | 651 | 34 |
Foreign | 0 | 0 |
Total current | 651 | 15 |
Deferred: | ||
Federal | (6,409) | 6 |
State | (272) | 19 |
Foreign | 0 | 0 |
Total deferred | (6,681) | 25 |
Total | $ (6,030) | $ 40 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the income tax (benefit) expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes | ||
Provision at federal statutory rate | $ 1,470 | $ 124 |
Change in valuation allowance | (8,738) | (1,709) |
Permanent differences | 1 | 3 |
Net operating loss expiration and adjustment | 521 | 2,284 |
Change in state tax rates | 291 | (244) |
Change in uncertain tax positions | 131 | 6 |
Foreign rate differential | (15) | (16) |
State and foreign tax expense | 419 | 77 |
(Income) loss attributable to non-controlling interest | (178) | 28 |
Other | 68 | (513) |
(Benefit) provision for income taxes | $ (6,030) | $ 40 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred tax assets related to: | ||
U.S. and foreign net operating loss carryforwards | $ 14,388 | $ 16,017 |
Accrued compensation | 1,222 | 1,262 |
Unrealized gain/loss on investments | 1,751 | 1,828 |
Partnership investment | 0 | 237 |
U.S. credit carryforwards | 751 | 1,225 |
Stock compensation | 919 | 190 |
Acquisition costs | 62 | 75 |
Other | 85 | 76 |
Deferred tax assets | 19,178 | 20,910 |
Valuation allowance | (11,697) | (20,435) |
Total deferred tax assets | 7,481 | 475 |
Deferred tax liabilities related to: | ||
Partnership investment | 151 | 0 |
Bond interest accretion | 698 | 0 |
Deferred tax liabilities | 849 | 0 |
Total deferred tax assets | 849 | 0 |
Deferred income taxes (net) | $ 6,632 | $ 475 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
U.S. Federal NOL carryforwards | $ 51,438,000 | |
Federal AMT credit carryforward | $ 950,000 | |
Income Tax Credits and Adjustments, Subject to Refund | 475,000 | |
Deferred Tax Assets, Valuation Allowance | 11,697,000 | 20,435,000 |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 8,738,000 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 316,000 | |
Unrecognized Tax Benefits, Interest on Income Taxes Expense | 10,000 | |
Unrecognized Tax Benefits, Interest on Income Taxes Accrued | $ 43,000 | $ 33,000 |
Maximum Number of Common Stock to be Owned by Investor as Beneficial Ownership | 4,176,180 | |
Research and development | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforwards, federal purposes | $ 751,000 | |
Tax credit carryforward period | 20 years | |
Deferred Tax Assets Change In Valuation Allowance Due To The Movement Of German Deferred Taxes [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Valuation Allowance | $ 49,000 | |
Deferred Tax Assets change In Valuation Allowance Usage of Deferred Tax Assets [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred Tax Assets, Valuation Allowance | 8,689,000 | |
State and Local Jurisdiction [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 22,856,000 | |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 8,258,000 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Taxes | ||
Balance | $ 251 | $ 251 |
Activity for year end | 0 | |
Increase related to tax positions - Current year | 121 | |
Balance | $ 372 | $ 251 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Future grant | 692,193 | 692,193 | |
Weighted average period | 7 months 17 days | ||
Stock Repurchased During Period, Shares | 0 | ||
Restricted Stock [Member] | |||
Stock-based compensation expense | $ 411,000 | $ 231,000 | |
Compensation cost of restricted stock | $ 527,000 | $ 527,000 | |
Weighted average period | 2 years 3 months 22 days | ||
Awards granted (in shares) | 100,026 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 58,336 | ||
Stock Option [Member] | |||
Weighted average period | 7 years 7 months 21 days | ||
Number of share outstanding | 15,000 | 15,000 | |
Option Exercisable | 10,000 | 10,000 | |
Weighted-average exercise price | $ 5.42 | $ 5.42 | |
Total intrinsic exercisable value | 0 | 0 | 0 |
Stock options granted, but not yet vested | $ 3,000 | 3,000 | |
Exercise of stock option | $ 0 | $ 0 | |
Non-employee directors | Restricted Stock [Member] | |||
Awards granted (in shares) | 15,000 | ||
Employees | |||
Awards granted (in shares) | 85,026 | ||
Employees | Restricted Stock [Member] | |||
Awards granted (in shares) | 85,026 | ||
Vesting period | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of the activity of restricted stock awards (Details) - Restricted Stock [Member] | 12 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Non-vested at July 1, 2019 (in shares) | shares | 167,500 |
SARs granted | shares | 100,026 |
Vested, Shares (in shares) | shares | (58,336) |
Forfeited, Shares (in shares) | shares | (5,000) |
Non-vested at June 30, 2020 (in shares) | shares | 204,190 |
Non-vested, Weighted Average Grant Date Fair Value at July 1, 2019 (in dollars per share) | $ / shares | $ 4.15 |
Granted, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 4.90 |
Vested, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 4.13 |
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share) | $ / shares | 5.42 |
Non-vested at, Weighted Average Grant Date Fair Value at June 30, 2020 (in dollars per share) | $ / shares | $ 4.41 |
Stock Repurchase Plan (Details)
Stock Repurchase Plan (Details) - shares | Jun. 30, 2020 | Feb. 28, 2019 | Mar. 05, 2018 |
Stock Repurchase Plan | |||
Number of common shares authorized for repurchase | 1,000,000 | ||
Additional number of common shares authorized under new repurchase program | 500,000 | ||
Number of shares available for repurchase | 364,298 |
Pensions and Other Postretire_3
Pensions and Other Postretirement Benefits - Obligations and funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Change in benefit obligation: | ||
Benefit obligation at beginning of year | $ 4,702 | $ 4,581 |
Interest cost | 30 | 60 |
Actuarial (gain) loss | 79 | (432) |
Foreign currency exchange rate change | (60) | (123) |
Benefits paid | (241) | (248) |
Benefit obligation at end of year | 4,352 | 4,702 |
Change in plan assets: | ||
Fair value of plan assets at beginning of year | 560 | 809 |
Actual return on plan assets | 6 | 1 |
Employer contributions | 21 | 13 |
Benefits paid | (235) | (242) |
Foreign currency exchange rate change | (10) | (21) |
Fair value of plan assets at end of year | 342 | 560 |
Funded status at end of year | $ (4,010) | $ (4,142) |
Pensions and Other Postretire_4
Pensions and Other Postretirement Benefits - Amounts recognized in consolidated balance sheets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Pensions and Other Postretirement Benefits | ||
Other accrued expenses | $ (5) | $ (6) |
Pension liability - long-term liabilities | (4,005) | (4,136) |
Total pension liability | (4,010) | (4,142) |
Accumulated other comprehensive loss | $ (1,517) | $ (1,707) |
Pensions and Other Postretire_5
Pensions and Other Postretirement Benefits - Items not yet recognized as component of net periodic cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Pensions and Other Postretirement Benefits | ||
Unrecognized actuarial losses | $ 1,517 | $ 1,707 |
Amounts recognized in OCI | $ 1,517 | $ 1,707 |
Pensions and Other Postretire_6
Pensions and Other Postretirement Benefits - Accumulated Benefit obligation in excess of plan assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Pensions and Other Postretirement Benefits | |||
Projected benefit obligation | $ 4,352 | $ 4,702 | $ 4,581 |
Accumulated benefit obligation | 4,352 | 4,702 | |
Fair value of plan assets | $ 342 | $ 560 | $ 809 |
Pensions and Other Postretire_7
Pensions and Other Postretirement Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Net Periodic Benefit Cost | ||
Interest cost | $ 30 | $ 60 |
Expected return on plan assets | (5) | (5) |
Recognized actuarial loss | 89 | 64 |
Net periodic benefit cost | $ 114 | $ 119 |
Pensions and Other Postretire_8
Pensions and Other Postretirement Benefits - Assumptions used to determine benefit obligations (Details) | Jun. 30, 2020 | Jun. 30, 2019 |
Pensions and Other Postretirement Benefits | ||
Discount rate | 0.86% | 0.67% |
Expected return on plan assets | 3.00% | 3.00% |
Compensation increase rate | 0.00% | 0.00% |
Pensions and Other Postretire_9
Pensions and Other Postretirement Benefits - Assumptions used to determine net periodic benefit cost (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Pensions and Other Postretirement Benefits | ||
Discount rate | 0.67% | 1.37% |
Expected return on plan assets | 3.00% | 2.00% |
Compensation increase rate | 0.00% | 0.00% |
Pensions and Other Postretir_10
Pensions and Other Postretirement Benefits - Summary of defined-benefit plan's assets measured at fair value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 342 | $ 560 | $ 809 |
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 100.00% | 100.00% | |
Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 46 | $ 32 | |
Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 296 | 528 | |
Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Cash Surrender Value [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 296 | $ 528 | |
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 86.50% | 94.30% | |
Cash Surrender Value [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 0 | $ 0 | |
Cash Surrender Value [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 296 | 528 | |
Cash Surrender Value [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Cash and Cash Equivalents [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 46 | $ 32 | |
Defined Benefit Plan, Plan Assets, Actual Allocation, Percentage | 13.50% | 5.70% | |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 46 | $ 32 | |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | 0 | 0 | |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Plan Assets, Amount | $ 0 | $ 0 |
Pensions and Other Postretir_11
Pensions and Other Postretirement Benefits - Estimated future benefit payments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Pensions and Other Postretirement Benefits | |
2021 | $ 244 |
2022 | 241 |
2023 | 238 |
2024 | 238 |
2025 | 243 |
2026 - 2030 | $ 1,147 |
Pensions and Other Postretir_12
Pensions and Other Postretirement Benefits - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | $ 1,517 | $ 1,707 | |
DefinedBenefitsPlanExpectedContributionsInCurrentFiscalYearTotal | $ 6,000 | ||
Expected | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax | $ 83,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at June 30, 2019 | $ (6,579) |
Other comprehensive income | 420 |
Effect of deferred taxes on unrealized losses | (47) |
Effect of exchange rates on the pension plans | 0 |
Net current period other comprehensive income | 373 |
Balance at June 30, 2020 | (6,206) |
Pension and Postretirement Benefit Plans [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at June 30, 2019 | (1,707) |
Other comprehensive income | 167 |
Effect of deferred taxes on unrealized losses | 0 |
Effect of exchange rates on the pension plans | 23 |
Net current period other comprehensive income | 190 |
Balance at June 30, 2020 | (1,517) |
Currency Translation Adjustments [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at June 30, 2019 | 496 |
Other comprehensive income | 50 |
Effect of deferred taxes on unrealized losses | 0 |
Effect of exchange rates on the pension plans | (23) |
Net current period other comprehensive income | 27 |
Balance at June 30, 2020 | 523 |
Unrealized Loss on Investments [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Balance at June 30, 2019 | (5,368) |
Other comprehensive income | 203 |
Effect of deferred taxes on unrealized losses | (47) |
Effect of exchange rates on the pension plans | 0 |
Net current period other comprehensive income | 156 |
Balance at June 30, 2020 | $ (5,212) |
Acquisition - Date fair value o
Acquisition - Date fair value of the consideration (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Acquisition | ||
Cash consideration | $ 0 | $ 1,212 |
Equity consideration - 20% membership interest in LMCS | 893 | |
Equity consideration - warrants to purchase CCUR common stock | 200 | |
Fair value of contingent consideration | 2,160 | |
Total purchase consideration | $ 4,465 |
Acquisition - Assets acquired a
Acquisition - Assets acquired and liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Acquisition | ||
Accounts receivable | $ 153 | |
Intangible assets | 3,090 | |
Goodwill | $ 480 | 1,260 |
Total assets acquired | 4,503 | |
Accrued commission | 38 | |
Total liabilities assumed | 38 | |
Net assets acquired | $ 4,465 |
Acquisition - Fair value and we
Acquisition - Fair value and weighted-average amortization (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Business Acquisition [Line Items] | |
Fair Value | $ 3,090 |
Weighted Average Amortization Period | 6 years 8 months 12 days |
Trade names | |
Business Acquisition [Line Items] | |
Fair Value | $ 180 |
Weighted Average Amortization Period | 10 years |
Non-competition agreements | |
Business Acquisition [Line Items] | |
Fair Value | $ 790 |
Weighted Average Amortization Period | 5 years |
Investor/ funder relationships [Member] | |
Business Acquisition [Line Items] | |
Fair Value | $ 2,120 |
Weighted Average Amortization Period | 7 years |
Acquisition - Additional Inform
Acquisition - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 444,361 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 6.50 | |
Concluded Value of Warrants Derived from Mean of Numerical Results Using Probabilistic Model | $ 200,000 | |
Cash consideration | $ 0 | 1,212,000 |
Fair value of contingent consideration | 0 | |
Contingent consideration, current | 0 | 750,000 |
Contingent consideration, noncurrent | $ 0 | 2,340,000 |
LuxeMark Capital, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Fair value of contingent consideration | 2,360,000 | |
Additional contingent consideration | 730,000 | |
Contingent consideration, current | 750,000 | |
Contingent consideration, noncurrent | 2,340,000 | |
Operating Expense [Member] | ||
Business Acquisition [Line Items] | ||
Business Combination, Acquisition Related Costs | $ 300,000 | |
Lm Capital Solutions Llc [Member] | LuxeMark Capital, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Noncontrolling interest | 20.00% |
Segments - Operating Results (D
Segments - Operating Results (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Segment revenue: | ||
Consolidated revenues | $ 5,873 | $ 3,456 |
Segment operating expenses: | ||
Consolidated operating expenses | 7,364 | 6,213 |
Segment operating income (loss): | ||
Consolidated operating income (loss) | (1,491) | (2,757) |
Syndication fees [Member} | ||
Segment revenue: | ||
Consolidated revenues | 1,288 | 693 |
MCA Funder Loan Income [Member] | ||
Segment revenue: | ||
Consolidated revenues | 887 | 117 |
Other MCA revenue [Member] | ||
Segment revenue: | ||
Consolidated revenues | 154 | 93 |
MCA [Member] | ||
Segment operating income (loss): | ||
Consolidated operating income (loss) | 4,845 | 30 |
MCA [Member] | MCA advance income [Member] | ||
Segment revenue: | ||
Consolidated revenues | 3,240 | 1,694 |
MCA [Member] | MCA Operations Expenses [Member] | ||
Segment revenue: | ||
Consolidated revenues | 5,569 | 2,597 |
Segment operating expenses: | ||
Consolidated operating expenses | 724 | 2,567 |
Real estate operations | ||
Segment revenue: | ||
Consolidated revenues | 304 | 859 |
Segment operating expenses: | ||
Consolidated operating expenses | 0 | 0 |
Segment operating income (loss): | ||
Consolidated operating income (loss) | 304 | 859 |
Corporate [Member] | ||
Segment operating expenses: | ||
Consolidated operating expenses | 6,640 | 3,646 |
Segment operating income (loss): | ||
Consolidated operating income (loss) | (6,640) | (3,646) |
Selling, general and administrative expenses [Member] | ||
Segment operating expenses: | ||
Consolidated operating expenses | 1,091 | 562 |
Impairment of goodwill and long-lived assets | ||
Segment operating expenses: | ||
Consolidated operating expenses | 1,395 | 0 |
Change in fair value of contingent consideration [Member] | ||
Segment operating expenses: | ||
Consolidated operating expenses | (3,090) | 730 |
Amortization of purchased intangibles [Member] | ||
Segment operating expenses: | ||
Consolidated operating expenses | 479 | 180 |
Provision for Credit Losses on Advances [Member] | ||
Segment operating expenses: | ||
Consolidated operating expenses | $ 849 | $ 1,095 |
Segments - Assets (Details)
Segments - Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Segment Reporting Information [Line Items] | ||
Total consolidated assets | $ 69,850 | $ 62,474 |
MCA [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | 19,287 | 18,277 |
Real estate operations | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | 9,275 | 7,379 |
Corporate [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | 48,065 | 47,190 |
Corporate Intercompany loan to MCA [Member] | ||
Segment Reporting Information [Line Items] | ||
Total consolidated assets | $ (6,777) | $ (10,372) |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases | ||
Weighted-average remaining lease term for operating leases | 44 months | |
Weighted-average discount rate used for operating leases | 7.40% | |
Amounts included in the financial statements related to leases | ||
Operating lease cost | $ 236 | $ 56 |
Gross sublease income | 143 | 33 |
Operating cash flows from operating leases | $ (93) | $ (23) |
Leases - Operating leases (Deta
Leases - Operating leases (Details) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Lease payments for operating leases | |
2021 | $ 250 |
2022 | 258 |
2023 | 123 |
2024 | 79 |
2025 | 81 |
Total lease liability | $ 777,000 |
Total lease liability | us-gaap:OperatingLeaseLiability |
Total unrecognized expected interest expense | $ 84,000 |
Impairment charge of LMCS business unit | $ 53,000 |
Commitments and Contingencies_2
Commitments and Contingencies and Related Party Transactions (Details) | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Loss Contingencies [Line Items] | |
Contingent Liability for Employee Severance Payments | $ 405,000 |
Minimum | |
Loss Contingencies [Line Items] | |
Terminated Employees Severance Compensation Period | 6 months |
Maximum | |
Loss Contingencies [Line Items] | |
Terminated Employees Severance Compensation Period | 12 months |
Commitments and Contingencies_3
Commitments and Contingencies and Related Party Transactions - Related Party Transactions (Details) - USD ($) | Jun. 04, 2020 | Feb. 24, 2020 | Mar. 31, 2020 | Feb. 28, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Feb. 29, 2020 |
Cash-settled SARs | CIDM II or Asset Manager | ||||||||
Related Party Transaction [Line Items] | ||||||||
Expense reimbursements per quarter | $ 50,000 | |||||||
Cash paid upon number of SARs issued | $ 399,000 | |||||||
One-time dividend declared per share | $ 0.50 | |||||||
One-time dividend paid | $ 0.50 | |||||||
Management Agreement | SARs | ||||||||
Related Party Transaction [Line Items] | ||||||||
Cash value of a SAR grant, per share | $ 3.50 | |||||||
Management Agreement | Cash-settled SARs | ||||||||
Related Party Transaction [Line Items] | ||||||||
SARs base price | $ 0.01 | |||||||
Management Agreement | To be settled in cash | Prior Asset Manager | ||||||||
Related Party Transaction [Line Items] | ||||||||
SARs base price | $ 0.01 | |||||||
SARs granted | 797,446 | |||||||
Omnibus Amendment | SARs | ||||||||
Related Party Transaction [Line Items] | ||||||||
Compensation expense | $ 2,552,000 | |||||||
Omnibus Amendment | Cash-settled SARs | Expected | ||||||||
Related Party Transaction [Line Items] | ||||||||
SARs granted | 90,310 | |||||||
Compensation expense | $ 289,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Lm Capital Solutions Llc [Member] | Jul. 17, 2020 | Jul. 16, 2020 | Jun. 30, 2020 |
Subsequent Event [Line Items] | |||
Ownership percentage | 80.00% | ||
Subsequent event | |||
Subsequent Event [Line Items] | |||
Ownership percentage | 51.00% | 80.00% |
MORTGAGE LOANS ON REAL ESTATE (
MORTGAGE LOANS ON REAL ESTATE (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Face Amount | $ 1,738 |
Carrying Value | 1,695 |
Principal Amount of Mortgages Subject to Delinquent Principal or Interest | $ 0 |
Loan A [Member] | |
Property Type | Commercial Manufacturing |
Contractual Interest Rate | 12.00% |
Maturity Date | May 30, 2022 |
Periodic Payment | Interest Only, Balloon Final |
Face Amount | $ 1,000 |
Carrying Value | 970 |
Principal Amount of Mortgages Subject to Delinquent Principal or Interest | $ 0 |
Loan B [Member] | |
Property Type | Residential Predevelopment |
Contractual Interest Rate | 10.00% |
Maturity Date | Oct. 21, 2021 |
Periodic Payment | Milestone |
Face Amount | $ 738 |
Carrying Value | 725 |
Principal Amount of Mortgages Subject to Delinquent Principal or Interest | $ 0 |