UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 20172018

or

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

Commission File Number: 001-37706

_____________

CCUR HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

4375 River Green Parkway, Suite 210, Duluth, GAGeorgia 30096

(Address of principal executive offices) (Zip Code)

Telephone: (770) 305-6435

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrantregistrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ      No ¨o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ     No ¨o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   ¨        No   þ

Number of shares of the Registrant’s Common Stock,Company’s common stock, par value $0.01 per share, outstanding as of February 9, 20184, 2019 was 9,880,038.8,905,037.

CCUR Holdings, Inc.

(formerly Concurrent Computer Corporation)

Quarterly Report on Form 10-Q

For the Quarterly Period Ended December 31, 20172018

Table of Contents

Part I -Financial Information

Item 1.  Condensed Consolidated     Financial Statements

CCUR Holdings, Inc. (formerly Concurrent Computer Corporation)

Condensed Consolidated Balance Sheets(Unaudited)

(Amounts in thousands, except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

CCUR Holdings, Inc.

(formerly Concurrent Computer Corporation)

Condensed Consolidated STATEMENTS OF OPERATIONS(Unaudited)

(Amounts in thousands, except share and per share data)

The accompanying notes are an integral part of the condensed consolidated financial statements.

ccur holdings, inc.

(formerly Concurrent Computer Corporation)

Condensed Consolidated STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (LOSS)(Unaudited)

(Amounts in thousands)

The accompanying notes are an integral part of the condensed consolidated financial statements.

ccur holdings, inc.

(formerly Concurrent Computer Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYCASH FLOWS(Unaudited)

For the six-month period ended December 31, 2017

(Amounts in thousands, except share data)thousands)

The accompanying notes are an integral part of the condensed consolidated financial statementsstatements.

ccur holdings, inc.

(formerly Concurrent Computer Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

(Amounts in thousands)

The accompanying notes are an integral part of the condensed consolidated financial statements

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

(Amounts in thousands, except for share and per share data)

References herein to “CCUR Holdings,” the “Company,” “we,” “our,“us,” or “us”“our” refer to CCUR Holdings, Inc. and its subsidiaries unless the context specifically indicates otherwise. CCUR Holdings was formerly known as Concurrent Computer Corporation and changed its name on January 2, 2018.

In May 2017, we sold our Real-Time business consisting of real-time Linux operating system versions, development and performance optimization tools, simulation software and other system software combined, in many cases, with computer platforms and services. These real-time products were sold to a wide variety of companies seeking high performance, real-time computer solutions in the defense, aerospace, financial and automotive markets around the world.

On December 31, 2017, we completed the sale of our content delivery and storage business (the “Content Delivery business”) and other related assets to Vecima Networks, Inc. (“Vecima”) pursuant to an Asset Purchase Agreement, dated as of October 13, 2017, between the Company and Vecima. Substantially all liabilities associated with the Content Delivery business were assigned to Vecima as part of the transaction. The Content Delivery business provided advanced applications focused on storing, protecting, transforming, and delivering high value media assets and served industries and customers that demand uncompromising performance, reliability and flexibility to gain a competitive edge, drive meaningful growth and confidently deliver best-in-class solutions that enrich the lives of millions of people around the world every day. Content delivery solutions consisted of software, hardware and services for intelligently streaming video content to a variety of consumer devices and storing and managing content in the network. These streaming video and storage products and services are deployed by service providers to support consumer-facing video applications including live broadcast video, video-on-demand and time-shifted video services such as cloud-based digital video recording. In fiscal year 2016, the Company introduced Aquari™ Storage, a unified scale-out storage solutions product that is ideally suited for a wide range of enterprise IT and video applications that require advanced performance, very large storage capacities, and a high degree of reliability.

In May 2017, we sold our Real-Time business consisting of real-time Linux operating system versions, development and performance optimization tools, simulation software and other system software combined, in many cases, with computer platforms and services. These real-time products were sold to a wide variety of companies seeking high performance, real-time computer solutions in the defense, aerospace, financial and automotive markets around the world.media.

Results of ourthe Content Delivery and Real-Time businessesbusiness are retrospectively reported as discontinued operations in ourthe accompanying consolidated financial statements for all periods presented. Prior year information has been adjusted to conform withto the current year presentation. Unless otherwise stated, the information disclosed in the footnotes accompanying the consolidated financial statements refers to continuing operations. See Note 4 – Discontinued Operations3 “Discontinued Operations” for more information regarding results from discontinued operations.

In fiscal year 2018, following the sale of the Content Delivery business, we began developing a real estate operation initially through, among other things, making a number of commercial loans secured by real property. Based on the success of these activities, including the yield characteristics of these loans, and management’s experience in the real estate area, we created Recur Holdings LLC, a Delaware limited liability company wholly owned by the Company, during the first quarter of our fiscal year 2019. Through Recur Holdings LLC, we conduct, hold and manage our existing and future real estate operations.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles ofin the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to applicable rules and regulations. In the opinion of management, all adjustments of a normal recurring nature which were considered necessary for a fair presentation have been included. The year-end condensed consolidated balance sheet data as of June 30, 20172018 was derived from our audited consolidated financial statements but doesand may not include all disclosures required by U.S. GAAP. Certain prior period income amounts have been reclassified to conform with current period presentation. The results of operations for the three months and six months ended December 31, 20172018 are not necessarily indicative of the results to be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 20172018 filed with the SEC on September 20, 2017.

As a result of the sale of our operating businesses, many of our Significant Accounting Policies as disclosed in Note 2 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2017 are no longer applicable subsequent to December 31, 2017.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)7, 2018.

Smaller Reporting Company

We meet the SEC’s definition of a “Smaller Reporting Company,” and therefore qualify for the SEC’s reduced disclosure requirements for smaller reporting companies.

CCUR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

Use of Estimates

The preparation of financial statements in conformity with 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.

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.

We adopted Accounting Standards Update (“ASU”) No. 2016-01,Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities(“ASU 2016-01”), as amended by ASU No. 2018-03,Financial Instruments-Overall: Technical Corrections and Improvements, on July 1, 2018 (see Note 2). Upon adoption of ASU 2016-01 on July 1, 2018, we are no longer required to determine the classification of our equity securities and there will no longer be a requirement to assess equity securities for impairment since such securities will be measured at fair value through net income.

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 considered to be 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 an “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 it is more likely than not that it 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.

CCUR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

Recently IssuedCommercial and Adopted Accounting GuidanceMortgage 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 chargeback 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 our commercial loans to maturity and have not recorded provisions for loan losses as of December 31, 2018.

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 December 31, 2018, we have not recorded any charge-offs, and believe that an allowance for loan losses is not required.

Advances Receivable

Merchant Cash Advances, net

In July 2015,December 2018, we began purchasing participation interests in Merchant Cash Advances (“MCAs”) from a third party whose principal activity is originating MCAs to small businesses. MCAs are contracts formed through a future receivables or receipts purchase and sale agreement, which stipulates the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-11,Inventory (Topic 330): Simplifyingpurchase price, or the Measurementamount advanced, and the specified amount, or the advance amount plus the factored receivable balance the Company will be repaid, on the face of Inventory (“ASU 2015-11”). This amendment requires that an entity measure its inventory at the “lower of cost and net realizable value.” Net realizable valuecontract. Generally, a specified amount will be withdrawn from the merchant’s bank account via daily or weekly ACH 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 the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Current literature requires measurement of inventory at “lower of cost or market.” Market could be replacement cost, net realizable value, or net realizable value less an approximate normal profit margin. ASU 2015-11 was effective for us on July 1, 2017, and we adopted the guidance prospectively. The adoption of ASU 2015-11 did not haveno monthly minimum payment, nor is there a material impact on our consolidated financial statements or disclosures.specific repayment schedule.

In March 2016,Other Advances Receivable

During the FASB issued ASU No. 2016-09,Compensation – Stock Compensation (Topic 718): Improvementssix months ended December 31, 2018, we provided a $2,000 cash advance to Employee Share-Based Payment Accounting (“ASU 2016-09”). ASU 2016-09 providesan aviation business to fund the deposit required for simplificationthe recipient’s aircraft purchases for up to six months, in exchange for paying us an upfront fee and a guaranty of certain aspectsthe full repayment obligation from the principal of employee share-based payment accounting includingthe third-party business. The fee is earned over the six-month advance period and is reported as part of merchant cash advance income taxes, classification of awards as either equity or liabilities, and classification onwithin the statement of operations. Each quarter, we review the carrying value of this cash flows. ASU 2016-09advance, and determine if an impairment reserve is necessary. As of December 31, 2018, our advance receivable was effective was effective for us on July 1, 2017, and we adopted the guidance prospectively. The adoption of ASU 2016-09 did not have a material impact on our consolidated financial statements or disclosures.impaired.

Recent Accounting Guidance Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires a lessee to recognize a lease liabilityAllowance for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures.MCA credit losses

In August 2016,The allowance for credit losses for MCAs is established at the FASB issued ASU No. 2016-15,Clarificationtime of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which eliminatesfunding through a provision for losses charged to our statement of operations based on historical performance experienced by an industry peer group. Losses are charged against the diversityallowance when management believes that the future collection in practice relatedfull of purchased receivables is unlikely. Subsequent recoveries, if any, are credited to the classificationallowance.

The establishment of certain cash receiptsappropriate reserves is an inherently uncertain process, and paymentsultimate 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. For the six months ended December 31, 2018, we have experienced no losses on advances; however, 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. Based on industry peer group historical performance, we recorded a $495 loss reserve during the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The amendments in this update should be applied retrospectively to all periods presented, unless deemed impracticable, in which case, prospective application is permitted. We do not expect ASU 2016-15 to have a material impact on our consolidated financial statements or disclosures.current period.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

In January 2017,Revenue Recognition

We generate revenue primarily from interest earned on commercial mortgage and other loans that yield interest, and also from fees earned on MCAs. Loan origination fees are deferred and recognized over the FASB issued ASU No. 2017-01 -Business Combinations (Topic 805) (“ASU 2017-01”), which clarifies the definition of a business. For accounting and financial reporting purposes, businesses are generally comprised of three elements; inputs, processes, and outputs. Integrated sets of assets and activities capable of providing these three elements may not always be considered a business, and the lack of oneexpected term of the three elements does not always disqualifyloan. The revenue generated from MCAs is primarily factor income. The factor income represents the set from being a business. The issuance of ASU 2017-01 provides a clarifying screen to determine when a set of assets and activities is not a business. Primarily, the screen requires that when substantially allamount of the fair valuepurchased receivables in excess of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. The amendments contained in ASU 2017-01 are effective for annual periods beginning after December 15, 2017 and may be early adopted for certain transactions that have occurred before the effective date, but only when the underlying transaction has not been reported in the financial statements that have been issued or made available for issuance. We do not expect ASU 2017-01 to have a material impact on our consolidated financial statements or disclosures.

In March 2017, the FASB issued ASU 2017-07,Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost(“ASU 2017-07”) which requires the service cost component of the net periodic benefit cost to be presented in the same income statement line items as other employee compensation costs arising from services rendered during the period. In addition, only the service cost component will be eligible for capitalization. Other components will be presented separately from the line items that include the service cost and outside of any subtotal of operating income, if one is presented. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. The guidance on the presentation of the components of net periodic benefit cost requires retrospective application. The guidance limiting the capitalization of net periodic benefit cost requires prospective application. We do not expect ASU 2017-07 to have a material impact on our consolidated financial statements or disclosures.

In May 2017, the FASB issued ASU 2017-09,Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), to provide clarity and reduce both diversity in practice and cost complexity when applying the guidance in Topic 718 to a changefunded contract amount advanced to the terms and conditions of a stock-based payment award. ASU 2017-09 also provides guidance about the types of changes to the terms or conditions of a share-based payment award that require an entity to apply modification accountingmerchant in accordance with Topic 718. ASU 2017-09the merchant agreement net of amounts related to participations. Factor income on merchant advance receivables is effective for annual periods beginning after December 15, 2017,earned and for interim periods therein. Early adoptionrecognized ratably as receivables are collected, at factor rates stipulated in the client funding agreement from the date of purchase through the date the receivables are collected or ceases accruing factor revenue when the receivable is permitted. We do not expect the adoption of ASU 2017-09 to have a material impact on our consolidated financial statements or disclosures.identified as uncollectible.

Basic and Diluted (Loss) Earnings per Share

Basic net income (loss) earnings per share is computed by dividing net(loss) income (loss) by the weighted average number of common shares outstanding during each period.year. Diluted net income (loss) earnings per share is computed by dividing net(loss) income (loss) by the weighted average number of common shares outstanding including dilutive common share equivalents outstanding during each period.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. Due to the loss from continuing operations for allboth periods presented, weighted average common share equivalents of 315,77110,937 and 267,481315,771 for the three months ended December 31, 20172018 and 2016,2017, respectively, and weighted average common share equivalents of 322,57013,420 and 265,845322,570 for the six months ended December 31, 2018 and 2017, and 2016, respectively,were excluded from the calculation as their effect waswould have been anti-dilutive.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

The following table presents a reconciliation of the numerators and denominators of basic and diluted net income per share for the periods indicated:

Content Delivery businessFair Value Measurements

As noted above, on December 31, 2017, we completed the sale of our Content Delivery business and other related assets to Vecima pursuant to an Asset Purchase agreement, dated as of October 13, 2017, between the Company and Vecima (the “CDN APA”) for a purchase price of $29,000 (subject to an adjustment for net working capital). The sale included our Content Delivery business assets and related liabilities in the United States, United Kingdom, and Germany, as well as the sale of all equity in our Japanese subsidiary.

Gross proceeds from the sale were paid to us as follows: (1) a $29,020 cash payment on December 31, 2017 (including a preliminary adjustment for estimated working capital as defined in the CDN APA of $1,470) and (2) $1,450 placed in escrow as security for the Company’s indemnification obligations to Vecima under the CDN APA, which amount will be released to the Company on or before December 31, 2018 (less any portion used to make indemnification payments to Vecima).

Additionally, we may receive additional consideration, or be required to return a portion of the consideration received on the closing date, based on a final determination of the Content Delivery business’ net working capital as of the closing date. This final calculation is required to be presented to us by Vecima no later than March 31, 2018 and we have 30 days after its receipt to agree with or contest those calculations. Subsequent to December 31, 2017, based on our estimate of the working capital of the Content Delivery business as of the closing date, calculated in accordance with the procedures set forth in the CDN APA, we have accrued our estimate of the final post-closing working capital adjustment within our current liabilities on our December 31, 2017 balance sheet, to be paid by us to Vecima during the latter half of our fiscal year 2018. In addition, we have reduced our estimate of the gain on the sale of the Content Delivery business by the amount of the estimated final post-closing working capital adjustment payment.

In conjunction with the CDN APA, we and Vecima entered into Transition Services Agreements (the “CDN TSA”) for the U.S. Under the CDN TSA, we and Vecima have each agreed to provide and receive various services to and from the other party on an arms-length, fee-for-service basis for a term of twelve months as of the date of the closing, unless terminated earlier by either party.

Results associated with the Content Delivery business are classified within income (loss) from discontinued operations, net of income taxes, in our condensed consolidated statements of operations. Operating expenses recorded in discontinued operations include costs incurred directly in support of the Content Delivery business.

The closing of the sale of the assets to Vecima resulted in a “change in control” under our Amended and Restated 2011 Stock Incentive Plan. As a result, the Company recognized expense of approximately $1,745 in share-based compensation expense due to the acceleration of the vesting and the lapse of restrictions on substantially all restricted stock granted under our Amended and Restated 2011 Stock Incentive Plan (see Note 7 – Share-based Compensation). This expense is reflected in general and administrative expenses of continuing operations in our condensed consolidated statement of operations for the three and six months ended December 31, 2017. Payment of associated accrued dividends related to these released shares was made in January 2018.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

For the three and six months ended December 31, 2017 and 2016, income (loss) from discontinued operations related to our Content Delivery business is comprised of the following:

A reconciliation of the gain before income taxes recorded on the sale of the Content Delivery business for three and six months ended December 31, 2017 is as follows:

Transaction costs directly associated with the sale of the Content Delivery business include legal, accounting, investment banking and other fees paid to external parties.

In connection with the sale of our Content Delivery business (1) we entered into a Separation and Consulting Agreement and General Release of Claims with Derek Elder, our former President and Chief Executive Officer, as a result of which (A) Mr. Elder’s role as president and chief executive officer was terminated, (B) Mr. Elder ceased to be a member of our Board of Directors and all committees thereof, and (C) we recorded severance related expenses of $544 pursuant to his Separation and Consulting Agreement (see Note 12 – Commitments and Contingencies – Separation of Chief Executive Officer), (2) we terminated the employment of another executive of the Company and recorded severance expenses of $132, (3) we paid transaction bonuses that had previously been approved by our compensation committee of $479 to internal executives and staff and (4) we accepted the resignation of an independent director of the Company (see Note 12 – Commitments and Contingencies – Resignation of Directors). All of the above expenses are included in general and administrative expenses of continuing operations in our condensed consolidated statement of operations for the three and six months ended December 31, 2017.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

At June 30, 2017, the carrying amounts of assets and liabilities of discontinued operations in our consolidated balance sheet were as follows:

Proceeds from the sale of the Content Delivery business have been presented in the condensed consolidated statement of cash flows under investing activities for the six months ended December 31, 2017. Proceeds from the sale of the Content Delivery business were net of $106 of cash transferred with the equity sale of our Japanese subsidiary. In accordance with ASC Topic 205-20, additional disclosures relating to cash flow is required for discontinued operations. Cash flow information relating to the Content Delivery business for the six months ended December 31, 2017 and 2016 is as follows:

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

A reconciliation of our cash and cash equivalents as of June 30, 2017 is as follows:

Real-Time business

On May 15, 2017, we completed the sale and transfer of certain assets and certain liabilities primarily related to our Real-Time business pursuant to an Asset Purchase Agreement (the “RT APA”) dated as of May 15, 2017 with Real Time, Inc. (the “RT Purchaser”), an investment company owned by Battery Ventures, a private-equity firm based in Boston, Massachusetts, for $35,000 less agreed upon adjustments for working capital. Pursuant to the terms of the RT APA, we sold and transferred certain respective equity interests in one of our subsidiaries, which constituted the European operations of the Real-Time business, upon receipt of French regulatory approval on May 30, 2017. The RT APA includes customary terms and conditions, including provisions following closing that require us to indemnify the Purchaser for certain losses that it incurs as a result of a breach by us of our representations and warranties in the RT APA and certain other matters.

Gross proceeds from the sale were paid to us as follows: (1) a $30,200 cash payment on May 15, 2017 (subject to an adjustment for estimated working capital as defined in the RT APA), (2) a $2,800 cash payment made concurrently with the transfer of the European operations of the Real Time business to the Purchaser received on May 30, 2017 and (3) $2,000 placed in escrow as security for certain purchase price adjustments and for our indemnification obligations to the Purchaser under the RT APA which amount will be released to us on or before May 15, 2018 (less any portion of the escrow used to make indemnification or purchase price adjustment payments to the RT Purchaser). In September 2017, the final working capital computation was completed and resulted in no additional consideration paid to or from either party.

In conjunction with the RT APA, we and the RT Purchaser entered into Transition Services Agreements (the “TSAs”) for U.S/Europe and Japan. Under the TSAs, we have agreed to provide and receive various services to and from the Purchaser on an arms-length fee-for-service basis for a term of six months as of the date of the TSAs, subject to a renewal term of up to eighteen months. We renewed the TSA for an additional six months after the end of the initial six-month term. Net amounts charged from the Purchaser under the TSAs for the three and six months ended December 31, 2017 are $37 and $32, respectively, and are recorded within operating expenses.

Results associated with the Real-Time business are classified as income from discontinued operations, net of income taxes, in our condensed consolidated statements of operations. Operating expenses recorded in discontinued operations include costs incurred directly in support of the Real-Time business. For the three and six months ended December 31, 2016, income from discontinued operations for our Real-Time business is comprised of the following:

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

In accordance with ASC Topic 205-20,Discontinued Operations, additional disclosures relating to cash flow are required for discontinued operations. Cash flow information relating to the Real-Time business for the six months ended December 31, 2016 is as follows:

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 it would transact and assumptions that market participants would use when pricing the asset or liability.

The Accounting Standards CodificationASC Topic 820,Fair Value Measurements and Disclosures requires certain disclosures around 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. These levels are:

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

CCUR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

Our investment portfolio consists of money market funds, U.S. Treasury bills, repurchase agreements and(“repos”), domestic and international commercial paper. Our investment portfolio has an average maturity of three months or lesspaper, equity securities and no investments within the portfolio have an original maturity of one year or more.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 short-termavailable-for-sale, trading or held-to-maturity investments. Our marketable securities, other than warrants and 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 recorded in interest income. Dividends paid by securities are recorded in dividend income. Any realized gains or losses would be shownare reported in the accompanying consolidated statements of operations in other income or expense.operations. Equity securities are reported at fair value with unrealized gains and losses resulting from adjustments to fair value reported within our consolidated statements of operations. We provide fair value measurementsmeasurement disclosures of our available-for-sale securities in accordance with one of the three levels of fair value measurement. We have no financial assets that are measured on a recurring basis that fall within Level 3 of the fair value hierarchy.

Our financial assets that are measured at fair value on a recurring basis as of December 31, 20172018 and June 30, 2018 are as follows:

Our

The carrying amounts of certain financial assetsinstruments, including cash equivalents and MCAs, approximate their fair values due to their short-term nature.

Recently Issued and Adopted Accounting Guidance

In January 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 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 onthrough net income. We utilized a recurring basis as ofmodified retrospective approach to adopt the new guidance effective July 1, 2018. The impact related to the change in accounting for equity securities for the fiscal year ended June 30, 2017 are as follows:2018 was $318 of net unrealized investment gains, net of income tax, reclassified from AOCI to retained earnings.

CCUR HOLDINGS, INC.

(formerly Concurrent Computer Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

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 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 after December 15, 2019. Early adoption is permitted. We are currently evaluating the impact this change will have on our consolidated financial statements and disclosures.

Content Delivery Business

On December 31, 2017, we completed the sale of the Content Delivery business and other related assets to Vecima pursuant to an Asset Purchase Agreement, dated as of October 13, 2017, between the Company and Vecima for a purchase price of $29,000 (subject to an adjustment for net working capital). The sale included our Content Delivery business assets and related liabilities in the United States, United Kingdom, and Germany, as well as the sale of all equity in our Japanese subsidiary.

Gross proceeds of $29,812 from the sale were paid to us as follows: (1) $28,362 net cash payment during our fiscal year ended June 30, 2018 (including an $812 adjustment for surplus net working capital transferred to Vecima as defined in the CDN APA) and (2) $1,450 placed in escrow as security for the Company’s indemnification obligations to Vecima under the CDN APA, which amount was to be released to the Company on or around December 31, 2018 (less any portion used to make indemnification payments to Vecima). In January 2019 we received the full $1,450 from escrow.

Results associated with the Content Delivery business are classified within income from discontinued operations, net of income taxes, in the accompanying consolidated statements of operations. Operating expenses recorded in discontinued operations include costs incurred directly in support of the Content Delivery business.

CCUR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

For the three months and six months ended December 31, 2017, income from discontinued operations, net of income taxes, related to the Content Delivery business was comprised of the following:

Cash flow information relating to the Content Delivery business for the six months ended December 31, 2017 was as follows:

CCUR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

Fixed Maturity and Equity Securities Investments

The following istables provide information relating to investments in fixed maturity and equity securities:

Fixed maturity debt securities are classified as “available for sale,” and as such, adjustments to fair value are recorded within other comprehensive income on the consolidated balance sheet as unrealized gains and losses. Upon our adoption of ASU 2016-01, effective July 1, 2018, changes in fair value of equity securities are recorded within the consolidated statement of operations as a summarynet realized gain (loss) on investments. During the three months ended December 31, 2018, we recorded a $1,529 unrealized loss on investments within our consolidated statement of operations as a fair value adjustment to our equity securities investments. During the six months ended December 31, 2018, we recorded a $1,986 unrealized loss on investments within our consolidated statement of operations as a fair value adjustment to our equity securities investments, and we recorded a $201 realized gain on the sale of debt and equity securities, as reported within our consolidated statement of operations.

The amortized cost and fair value of fixed maturity securities available-for-sale securities as of December 31, 2017:2018 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.