Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Mar. 31, 2020 | Apr. 30, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NATIONAL HOLDINGS CORP | |
Entity Central Index Key | 0001023844 | |
Current Fiscal Year End Date | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 13,476,519 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition - USD ($) | Mar. 31, 2020 | Sep. 30, 2019 |
ASSETS | ||
Cash | $ 18,847,000 | $ 30,443,000 |
Restricted cash | 962,000 | 960,000 |
Cash deposits with clearing organizations | 653,000 | 436,000 |
Securities owned, at fair value | 7,583,000 | 12,481,000 |
Receivables from broker-dealers and clearing organizations | 4,638,000 | 3,490,000 |
Forgivable loans receivable | 4,087,000 | 1,834,000 |
Other receivables, net | 8,761,000 | 5,672,000 |
Prepaid expenses | 4,582,000 | 3,639,000 |
Fixed assets, net | 4,763,000 | 5,067,000 |
Fixed assets, net | 5,067,000 | |
Intangible assets, net | 10,921,000 | 5,441,000 |
Goodwill | 7,903,000 | 5,153,000 |
Deferred tax asset, net | 4,542,000 | 4,560,000 |
Operating lease assets | 14,515,000 | |
Other assets | 1,599,000 | 2,031,000 |
Total Assets | 94,356,000 | 81,207,000 |
Liabilities | ||
Accrued commissions and payroll payable | 12,773,000 | 18,590,000 |
Accounts payable and accrued expenses | 7,373,000 | 8,643,000 |
Deferred clearing and marketing credits | 262,000 | 367,000 |
Contingent consideration | 7,109,000 | 1,620,000 |
Operating lease liabilities | 16,658,000 | |
Other | 1,366,000 | 388,000 |
Total Liabilities | 45,541,000 | 29,608,000 |
Commitments and Contingencies (Note 13) | ||
Stockholders’ Equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none outstanding | 0 | 0 |
Common stock $0.02 par value, authorized 75,000,000 shares at March 31, 2020 and September 30, 2019; 13,476,519 shares issued and outstanding at March 31, 2020 and 13,158,441 shares issued and outstanding at September 30, 2019 | 269,000 | 263,000 |
Additional paid-in-capital | 91,523,000 | 90,354,000 |
Accumulated deficit | (44,135,000) | (40,779,000) |
Total National Holdings Corporation Stockholders’ Equity | 47,657,000 | 49,838,000 |
Non-controlling interest | 1,158,000 | 1,761,000 |
Total Stockholders’ Equity | 48,815,000 | 51,599,000 |
Total Liabilities and Stockholders’ Equity | $ 94,356,000 | $ 81,207,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Parenthetical) - $ / shares | Mar. 31, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.02 | $ 0.02 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 13,476,519 | 13,158,441 |
Common stock, shares outstanding (in shares) | 13,476,519 | 13,158,441 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||||
Revenue from contracts with customers | $ 54,471,000 | $ 43,822,000 | $ 102,960,000 | $ 100,686,000 |
Net dealer inventory gains (losses) | (1,220,000) | 1,269,000 | (28,000) | 766,000 |
Interest and dividends | 1,125,000 | 1,412,000 | 2,519,000 | 2,996,000 |
Transaction fees and clearing services | 2,180,000 | 1,588,000 | 3,954,000 | 3,737,000 |
Tax preparation and accounting | 4,308,000 | 4,122,000 | 5,239,000 | 4,897,000 |
Other | 158,000 | 197,000 | 274,000 | 359,000 |
Total Revenues | 54,534,000 | 46,700,000 | 105,725,000 | 104,807,000 |
Operating Expenses | ||||
Commissions, compensation and fees | 49,343,000 | 40,633,000 | 94,642,000 | 90,043,000 |
Clearing fees | 754,000 | 530,000 | 1,078,000 | 1,289,000 |
Communications | 1,099,000 | 697,000 | 1,773,000 | 1,519,000 |
Occupancy | 1,225,000 | 980,000 | 2,393,000 | 1,906,000 |
License and registration | 958,000 | 747,000 | 1,983,000 | 1,326,000 |
Professional fees | 1,877,000 | 1,733,000 | 4,071,000 | 3,717,000 |
Interest | 24,000 | 10,000 | 38,000 | 18,000 |
Depreciation and amortization | 812,000 | 461,000 | 1,342,000 | 858,000 |
Other administrative expenses | 1,657,000 | 4,808,000 | 3,960,000 | 6,713,000 |
Total Operating Expenses | 57,749,000 | 50,599,000 | 111,280,000 | 107,389,000 |
Income (Loss) before Other Income (Expense) and Income Taxes | (3,215,000) | (3,899,000) | (5,555,000) | (2,582,000) |
Other Income (Expense) | ||||
Gain on disposal of National Tax branch | 297,000 | 297,000 | ||
Other income (expense) | 5,000 | 6,000 | 121,000 | 12,000 |
Total Other Income | 302,000 | 6,000 | 418,000 | 12,000 |
Income (Loss) before Income Taxes | (2,913,000) | (3,893,000) | (5,137,000) | (2,570,000) |
Income tax expense (benefit) | (453,000) | (1,108,000) | (1,178,000) | (741,000) |
Net Income (Loss) | (2,460,000) | (2,785,000) | (3,959,000) | (1,829,000) |
Net loss attributable to non-controlling interest | 697,000 | 0 | 603,000 | 0 |
Net income (loss) attributable to National Holdings Corporation common shareholders | $ (1,763,000) | $ (2,785,000) | $ (3,356,000) | $ (1,829,000) |
Net income (loss) per share attributable to National Holdings Corporation common shareholders - Basic (in dollars per share) | $ (0.13) | $ (0.22) | $ (0.25) | $ (0.14) |
Net income (loss) per share attributable to National Holdings Corporation common shareholders - Diluted (in dollars per share) | $ (0.13) | $ (0.22) | $ (0.25) | $ (0.14) |
Weighted average number of shares outstanding - Basic (in shares) | 13,364,498 | 12,714,002 | 13,266,291 | 12,628,606 |
Weighted average number of shares outstanding - Diluted (in shares) | 13,364,498 | 12,714,002 | 13,266,291 | 12,628,606 |
Commissions | ||||
Revenues | ||||
Revenue from contracts with customers | $ 31,153,000 | $ 22,801,000 | $ 54,320,000 | $ 43,812,000 |
Investment banking | ||||
Revenues | ||||
Revenue from contracts with customers | 7,557,000 | 9,797,000 | 22,785,000 | 36,868,000 |
Investment advisory | ||||
Revenues | ||||
Revenue from contracts with customers | $ 9,273,000 | $ 5,514,000 | $ 16,662,000 | $ 11,372,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in- Capital | Accumulated Deficit | Non-controlling Interest |
Balance (in shares) at Sep. 30, 2018 | 12,541,890 | ||||
Balance at Sep. 30, 2018 | $ 46,935 | $ 250 | $ 86,510 | $ (39,825) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation for restricted stock units | 1,322 | 1,322 | |||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding (in shares) | 68,655 | ||||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding | (101) | $ 2 | (103) | ||
Net income (loss) | 956 | 956 | |||
Balance (in shares) at Dec. 31, 2018 | 12,610,545 | ||||
Balance at Dec. 31, 2018 | 48,977 | $ 252 | 87,729 | (39,004) | 0 |
Balance (in shares) at Sep. 30, 2018 | 12,541,890 | ||||
Balance at Sep. 30, 2018 | 46,935 | $ 250 | 86,510 | (39,825) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (1,829) | ||||
Balance (in shares) at Mar. 31, 2019 | 12,899,866 | ||||
Balance at Mar. 31, 2019 | 47,541 | $ 258 | 89,072 | (41,789) | 0 |
Balance (in shares) at Dec. 31, 2018 | 12,610,545 | ||||
Balance at Dec. 31, 2018 | 48,977 | $ 252 | 87,729 | (39,004) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of shares of common stock for warrant of exercises (in shares) | 38 | ||||
Stock-based compensation for restricted stock units | 1,480 | 1,480 | |||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding (in shares) | 289,283 | ||||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding | (131) | $ 6 | (137) | ||
Net income (loss) | (2,785) | (2,785) | |||
Balance (in shares) at Mar. 31, 2019 | 12,899,866 | ||||
Balance at Mar. 31, 2019 | 47,541 | $ 258 | 89,072 | (41,789) | 0 |
Balance (in shares) at Sep. 30, 2019 | 13,158,441 | ||||
Balance at Sep. 30, 2019 | 51,599 | $ 263 | 90,354 | (40,779) | 1,761 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation for restricted stock units | 907 | 907 | |||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding (in shares) | 120,394 | ||||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding | (139) | $ 2 | (141) | ||
Net income (loss) | (1,499) | (1,593) | 94 | ||
Balance (in shares) at Dec. 31, 2019 | 13,278,835 | ||||
Balance at Dec. 31, 2019 | 50,868 | $ 265 | 91,120 | (42,372) | 1,855 |
Balance (in shares) at Sep. 30, 2019 | 13,158,441 | ||||
Balance at Sep. 30, 2019 | 51,599 | $ 263 | 90,354 | (40,779) | 1,761 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income (loss) | (3,959) | ||||
Balance (in shares) at Mar. 31, 2020 | 13,476,519 | ||||
Balance at Mar. 31, 2020 | 48,815 | $ 269 | 91,523 | (44,135) | 1,158 |
Balance (in shares) at Dec. 31, 2019 | 13,278,835 | ||||
Balance at Dec. 31, 2019 | 50,868 | $ 265 | 91,120 | (42,372) | 1,855 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation for restricted stock units | 538 | 538 | |||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding (in shares) | 197,684 | ||||
Issuance of shares of common stock with respect to vested restricted stock units, net of shares tendered for tax withholding | (131) | $ 4 | (135) | ||
Net income (loss) | (2,460) | (1,763) | (697) | ||
Balance (in shares) at Mar. 31, 2020 | 13,476,519 | ||||
Balance at Mar. 31, 2020 | $ 48,815 | $ 269 | $ 91,523 | $ (44,135) | $ 1,158 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Issuance of shares (in shares) | 48,689 | 52,291 | 45,228 | 31,762 |
Value of shares issued | $ 131 | $ 139 | $ 131 | $ 101 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ (2,460) | $ (1,499) | $ (2,785) | $ 956 | $ (3,959) | $ (1,829) | |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities | |||||||
Depreciation and amortization | 812 | 461 | 1,342 | 858 | |||
Amortization of forgivable loans | 387 | 333 | |||||
Stock-based compensation | 1,445 | 2,802 | |||||
Provision (recovery) for doubtful accounts | 161 | ||||||
Provision (recovery) for doubtful accounts | (142) | ||||||
Amortization of deferred clearing and marketing credit | (105) | (104) | |||||
Increase in fair value of contingent consideration | 49 | 27 | |||||
Deferred tax expense | (1,178) | (102) | |||||
Gain on disposal of National Tax branch | 297 | 0 | |||||
Amortization of operating lease assets | 1,515 | ||||||
Changes in assets and liabilities, net of business acquisitions | |||||||
Cash deposits with clearing organizations | (10) | 0 | |||||
Securities owned, at fair value | 6,009 | 180 | |||||
Receivables from broker-dealers and clearing organizations | (1,099) | 516 | |||||
Forgivable loans receivable | (2,803) | (315) | |||||
Other receivables, net | (2,288) | (684) | |||||
Prepaid expenses | (511) | (1,281) | |||||
Other assets | (56) | 17 | |||||
Accrued commissions and payroll payable, accounts payable and accrued expenses and other liabilities | (7,175) | (989) | |||||
Securities sold, but not yet purchased, at fair value | (203) | 0 | |||||
Net cash provided (used in) by operating activities | (8,776) | (713) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Acquisition of businesses, net of cash received (Note 7) | (2,021) | (387) | |||||
Purchase of fixed assets | (111) | (734) | |||||
Collection on notes receivable | 41 | 56 | |||||
Net cash used in investing activities | (2,091) | (1,065) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Repurchase of common stock for tax withholding | (270) | (232) | |||||
Principal payments under finance lease obligations | (116) | (116) | |||||
Principal payments under finance lease obligations | (110) | ||||||
Principal payments under finance obligations | (165) | (114) | |||||
Contingent consideration payments | (176) | 0 | |||||
Net cash used in financing activities | (727) | (456) | |||||
NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH | (11,594) | (2,234) | |||||
CASH AND RESTRICTED CASH BALANCE | |||||||
Beginning of the period | 31,403 | $ 29,273 | 31,403 | 29,273 | |||
End of the period | 19,809 | 27,039 | 19,809 | 27,039 | |||
Cash paid during the period for: | |||||||
Interest | 31 | 18 | |||||
Income taxes | 154 | 112 | |||||
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||||||
Fixed assets (acquired but not paid) | 0 | 49 | |||||
Finance obligation | 0 | 525 | |||||
Assets acquired including goodwill | 10,121 | 1,815 | |||||
Contingent consideration payable | (5,616) | (1,428) | |||||
Cash received | (18,847) | (18,847) | |||||
Acquisition of businesses, net of cash received (Note 7) | (2,021) | (387) | |||||
Notes receivable (included in other receivables) | 636 | $ 0 | |||||
Disposal of goodwill | (239) | 0 | |||||
Disposal of intangible assets, net | (100) | 0 | |||||
Gain on disposal of National Tax branch | 297 | 297 | $ 0 | ||||
Winslow Targets | |||||||
Additional consideration payable (net operating capital) | (873) | 0 | |||||
Escrow deposit | (500) | $ (500) | 0 | (500) | 0 | ||
Cash received | $ (1,111) | $ 0 | $ (1,111) | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required for annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The condensed consolidated financial statements as of March 31, 2020 and for the three and six months ended March 31, 2020 and 2019 are unaudited. The results of operations for the interim periods are not necessarily indicative of the results of operations for the respective fiscal years. The consolidated statement of financial condition at September 30, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statement presentation. The accompanying consolidated financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2019 for additional disclosures and accounting policies. Certain items in the condensed consolidated statement of operations for the fiscal 2019 period have been reclassified to conform to the presentation in the fiscal 2020 period. Such reclassifications did not have a material impact on the presentation of the overall financial statements. Non-controlling Interest The Company’s wholly-owned subsidiary, National Asset Management, Inc., a Washington corporation (“NAM”) has a majority voting interest in Innovation X Management, LLC (“Innovation X”), which together serve as the investment manager of an investment fund (See Note 19). Because NAM has the majority voting interest in Innovation X, the results of operations of Innovation X are included in the Company's consolidated financial statements, and the amount attributable to the other investor is recorded as a non-controlling interest. During the six months ended March 31, 2020 , Innovation X recognized $(895,000) of unrealized loss from securities previously received from the investment fund and held at March 31, 2020 of which $(603,000) was attributable to the non-controlling interest. |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ORGANIZATION AND DESCRIPTION OF BUSINESS National Holdings Corporation (“National” or the “Company”), a Delaware corporation organized in 1996, operates through its wholly owned subsidiaries which principally provide financial services. Through its broker-dealer and investment advisory subsidiaries, the Company (1) offers full service retail brokerage and investment advisory services to individual, corporate and institutional clients, (2) provides investment banking, merger, acquisition and advisory services to micro, small and mid-cap high growth companies and (3) engages in trading securities, including making markets in micro and small-cap, NASDAQ and other exchange listed stocks. The Company's broker-dealer subsidiary is National Securities Corporation, a Washington corporation (“NSC”). NSC conducts a national securities brokerage business through its main offices in New York City, New York and Boca Raton, Florida. NSC is an introducing broker and clears all transactions through clearing organizations, on a fully disclosed basis. NSC is registered with the Securities and Exchange Commission (“SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (the “SIPC”). The Company’s wholly-owned subsidiary, NAM, is a federally-registered investment adviser providing asset management advisory services to retail clients for a fee based upon a percentage of assets managed. The Company’s wholly-owned subsidiaries, National Insurance Corporation, a Washington corporation (“National Insurance”) and Prime Financial Services, a Delaware corporation (“Prime Financial”), provide fixed insurance products to their clients, including life insurance, disability insurance, long term care insurance and fixed annuities. The Company’s wholly-owned subsidiary, National Tax and Financial Services, Inc. (“National Tax”), provides tax preparation and accounting services to individuals and small to midsize companies. The Company’s wholly-owned subsidiary, GC Capital Corporation (“GC”), provides licensed mortgage brokerage services in New York and Florida. On December 31, 2019, the Company completed its acquisition of all of the outstanding equity interests of Winslow Evans & Crocker, Inc., a Massachusetts corporation (“WEC”), Winslow, Evans & Crocker Insurance Agency, Inc., a Massachusetts corporation (“WIA”), and Winslow Financial, Inc., a Massachusetts corporation (“WF”). See Note 7 for additional information. |
RECEIVEABLES FROM BROKER-DEALER
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES | 6 Months Ended |
Mar. 31, 2020 | |
Brokers and Dealers [Abstract] | |
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES | RECEIVABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES At March 31, 2020 and September 30, 2019 , the receivables of $4,638,000 and $3,490,000 , respectively, from broker-dealers and clearing organizations represent net amounts due for fees and commissions associated with the Company’s retail brokerage business as well as asset based fee revenues associated with the Company’s investment advisory business. Other receivables at March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, 2020 2019 Trailing fees $ 553,000 $ 947,000 Accounts receivable for tax and accounting services 1,298,000 686,000 Allowance for doubtful accounts - tax and accounting services (307,000 ) (282,000 ) Advances to registered representatives 1,866,000 1,383,000 Investment banking receivable 1,414,000 411,000 Advisory fees 527,000 483,000 Notes receivable 1,245,000 665,000 Other 2,165,000 1,379,000 Total other receivables, net $ 8,761,000 $ 5,672,000 |
FORGIVABLE LOANS RECEIVABLE
FORGIVABLE LOANS RECEIVABLE | 6 Months Ended |
Mar. 31, 2020 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
FORGIVABLE LOANS RECEIVABLE | FORGIVABLE LOANS RECEIVABLE From time to time, the Company’s operating subsidiaries may make loans, evidenced by promissory notes, primarily to newly recruited independent financial advisors as an incentive for their affiliation. The notes receivable balance is comprised of unsecured non-interest-bearing and interest-bearing loans (weighted average interest rate of 4% ). These notes have various schedules for repayment or forgiveness based on production or retention requirements being met and mature at various dates through 2029 . Forgiveness of loans amounted to $387,000 and $333,000 for the six months ended March 31, 2020 and 2019 , respectively, and the related compensation was included in commissions, compensation and fees in the condensed consolidated statements of operations. In the event the advisor’s affiliation with the subsidiary terminates, the advisor is required to repay the unamortized balance of any notes payable. The Company provides an allowance for doubtful accounts on the notes based on historical collection experience and continually evaluates the receivables for collectability and possible write-offs where a loss is deemed probable. As of March 31, 2020 and September 30, 2019 , no allowance for doubtful accounts was required. Forgivable loan activity for the six months ended March 31, 2020 is as follows: Balance, September 30, 2019 $ 1,834,000 Additions 2,803,000 Acquired through the Winslow acquisition (see Note 7) 91,000 Amortization (387,000 ) Reclassification to other receivables (254,000 ) Balance, March 31, 2020 $ 4,087,000 |
FAIR VALUE OF ASSETS AND LIABIL
FAIR VALUE OF ASSETS AND LIABILITIES | 6 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF ASSETS AND LIABILITIES | FAIR VALUE OF ASSETS AND LIABILITIES Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3 - Unobservable inputs which reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The following tables present the carrying values and estimated fair values at March 31, 2020 and September 30, 2019 of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and information is provided on their classification within the fair value hierarchy. Such instruments are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk. March 31, 2020 Assets Carrying Value Level 1 Level 2 Total Estimated Fair Value Cash $ 18,847,000 $ 18,847,000 $ — $ 18,847,000 Cash deposits with clearing organizations 653,000 653,000 — 653,000 Receivables from broker-dealers and clearing organizations 4,638,000 — 4,638,000 4,638,000 Forgivable loans receivable 4,087,000 — 4,087,000 4,087,000 Other receivables, net 8,761,000 — 8,761,000 8,761,000 $ 36,986,000 $ 19,500,000 $ 17,486,000 $ 36,986,000 Liabilities Accrued commissions and payroll payable $ 12,773,000 $ — $ 12,773,000 $ 12,773,000 Accounts payable and accrued expenses 7,373,000 — 7,373,000 7,373,000 $ 20,146,000 $ — $ 20,146,000 $ 20,146,000 September 30, 2019 Assets Carrying Value Level 1 Level 2 Total Estimated Fair Value Cash $ 30,443,000 $ 30,443,000 $ — $ 30,443,000 Cash deposits with clearing organizations 436,000 436,000 — 436,000 Receivables from broker-dealers and clearing organizations 3,490,000 — 3,490,000 3,490,000 Forgivable loans receivable 1,834,000 — 1,834,000 1,834,000 Other receivables, net 5,672,000 — 5,672,000 5,672,000 $ 41,875,000 $ 30,879,000 $ 10,996,000 $ 41,875,000 Liabilities Accrued commissions and payroll payable $ 18,590,000 $ — $ 18,590,000 $ 18,590,000 Accounts payable and accrued expenses 8,643,000 — 8,643,000 8,643,000 $ 27,233,000 $ — $ 27,233,000 $ 27,233,000 The following tables present the financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and September 30, 2019 : March 31, 2020 Assets Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Securities owned: Corporate stocks $ 1,836,000 $ 1,836,000 $ — $ — $ 1,836,000 Municipal bonds 229,000 229,000 — — 229,000 Restricted stock 731,000 — 731,000 — 731,000 Corporate bonds 101,000 101,000 — 101,000 Warrants 4,686,000 — 520,000 4,166,000 4,686,000 $ 7,583,000 $ 2,065,000 $ 1,352,000 $ 4,166,000 $ 7,583,000 Liabilities Contingent consideration $ 7,109,000 $ — $ — $ 7,109,000 $ 7,109,000 $ 7,109,000 $ — $ — $ 7,109,000 $ 7,109,000 September 30, 2019 Assets Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Securities owned: Corporate stocks $ 6,282,000 $ 6,282,000 $ — $ — $ 6,282,000 Municipal bonds 20,000 20,000 — — 20,000 Restricted stock 725,000 — 725,000 — 725,000 Warrants 5,454,000 — 1,529,000 3,925,000 5,454,000 $ 12,481,000 $ 6,302,000 $ 2,254,000 $ 3,925,000 $ 12,481,000 Liabilities Contingent consideration $ 1,620,000 $ — $ — $ 1,620,000 $ 1,620,000 $ 1,620,000 $ — $ — $ 1,620,000 $ 1,620,000 Changes in Level 3 assets measured at fair value on a recurring basis for the six months ended March 31, 2020 : Beginning Balance as of September 30, 2019 Net realized Gain or (losses) Net Change in Unrealized Appreciation (Depreciation) Purchases Sales Transfer Into Level 3 (a) Transfer Out of Level 3 Ending Balance as of March 31, 2020 Assets Warrants $ 3,925,000 $ — $ 99,000 $ — $ — $ 142,000 $ — $ 4,166,000 (a) The Company received warrants as part of investment banking transactions. See changes in Level 3 liabilities (contingent consideration) measured at fair value on a recurring basis for the six months ended March 31, 2020 in Note 7. The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the Company’s financial assets measured at fair value on a recurring basis with a significant Level 3 balance. Financial Instruments Owned Fair Value Valuation Technique Significant Unobservable Input(s) Input/Range Warrants $ 4,166,000 Market Approach Discount for lack of marketability Volatility 22% - 44% 57% - 117% Certain positions in common stock and warrants were received as compensation for investment banking services. Restricted common stock and warrants may be freely traded only upon the effectiveness of a registration statement covering them or upon the satisfaction of the requirements of Rule 144, including the requisite holding period. The unrealized loss for the change in fair value of such positions for the six months ended March 31, 2020 and 2019 amounted to approximately $971,000 and $723,000 , respectively, which is included in net dealer inventory (losses) gains. Warrants are carried at fair value as determined by using the Black-Scholes option pricing model. This model takes into account the underlying securities’ current market values, the underlying securities’ market volatility, the terms of the warrants, exercise prices, and the risk-free return rate. A discount is applied for the warrants’ lack of marketability. The discount is based on the value of a protective put. Debt securities are valued based on recently executed transactions. |
FIXED ASSETS
FIXED ASSETS | 6 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | FIXED ASSETS Fixed assets as of March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, Estimated Useful Lives Equipment and software $ 1,974,000 $ 1,835,000 3 - 7 Furniture and fixtures 840,000 761,000 5 Leasehold improvements 3,635,000 3,662,000 Lesser of useful Finance leases (primarily composed of computer equipment) 907,000 907,000 3 - 7 7,356,000 7,165,000 Less accumulated depreciation and amortization (2,593,000 ) (2,098,000 ) Fixed assets, net $ 4,763,000 $ 5,067,000 Depreciation expense associated with fixed assets for the three months ended March 31, 2020 and 2019 was $252,000 and $172,000 , respectively. Depreciation expense associated with fixed assets for the six months ended March 31, 2020 and 2019 was $495,000 and $341,000 , respectively. |
BUSINESS COMBINATION, CONTINGEN
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH | 6 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH | BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH Tax & Accounting Acquisitions In December 2019 and January 2020, National Tax acquired certain assets of two tax preparation and accounting businesses that per accounting guidance were deemed to be a business combination. The consideration for the transactions consisted of cash payments at closing totaling $432,000 , and contingent consideration payable in cash having a fair value of $1,595,000 , for which a liability (included in contingent consideration) was recognized based on the estimated acquisition date fair value of the potential earn-outs. The earn-outs are based on revenue, as defined in the acquisition agreements, during various periods following the closing. The fair value of the acquired assets totaling $2,027,000 was allocated to customer relationships, which are being amortized over seven years. The contingent consideration liability recognized in the above acquisitions was valued using an income-based approach using unobservable inputs (Level 3) and reflects the Company’s own assumptions. The liabilities will be revalued at each balance sheet date with changes therein recorded in earnings. Results of operations of the acquired business is included in the accompanying condensed consolidated statements of operations from the date of acquisition and was not material. In addition, based on materiality, pro forma results are not presented. Winslow Acquisition On August 26, 2019, the Company entered into a stock purchase agreement (as amended, the “Winslow Agreement” and the transactions contemplated thereunder, the “Winslow Acquisition”) whereby the Company agreed to acquire all of the outstanding equity interests (the “Purchased Shares”) of Winslow Evans & Crocker, Inc. (“WEC”), Winslow, Evans & Crocker Insurance Agency, Inc. (“WIA”), and Winslow Financial, Inc. (“WF” and collectively with WEC and WIA, the “Winslow Targets”). The Company entered into an amendment to the Winslow Agreement on October 11, 2019, to reflect certain clarifications to the terms of the Winslow Agreement as agreed to by the parties. On December 31, 2019, the Company completed the acquisition of all of the outstanding equity interests of the Winslow Targets. Under the terms of the Winslow Agreement, at the closing of the Winslow Acquisition, the Company acquired the Purchased Shares for an aggregate purchase price of approximately $3.2 million paid at closing in cash, subject to certain adjustments, plus additional consideration to be based on (i) the amount of net operating capital of WEC and WF as of the closing, payable in three annual installments and not to exceed $1.0 million in the aggregate, (ii) the aggregate pre-tax net income (loss) of the Winslow Targets through September 22, 2022, provided that such additional consideration shall not be less than $1.5 million and shall not exceed $3.0 million in the aggregate, and (iii) a portion of the synergies achieved through September 20, 2022. At the signing of the Winslow Agreement, the Company deposited $500,000 into escrow, which was applied to the amount payable at closing. WEC is a Boston-based, full-service investment firm established in 1991. WEC is an SEC Registered Investment Advisor and a FINRA registered broker-dealer. More than 50 financial professionals including Certified Financial Planners, Investment Advisor Representatives, Financial Consultants, brokers and other specialists are part of the Winslow team. Located in the heart of the financial district in Boston, MA, the Company believes that WEC is a strategic location for the Company to build out its banking platform. The acquisition was accounted for using the acquisition method of accounting under which assets and liabilities of the Winslow Targets were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. A deferred tax liability has been recorded for the excess of financial statement basis over tax basis of the acquired assets and assumed liabilities with a corresponding increase to goodwill. The goodwill attributable to the acquisition has been recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment. Goodwill, which is non-deductible for income tax purposes, is part of the brokerage and advisory services segment. The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of assets acquired and liabilities assumed are considered preliminary and are based on the most recent information available. The Company believes that the information provides a reasonable basis for assigning the fair values of assets acquired and liabilities assumed. Thus, the provisional measurements of fair value set forth below are subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The table below summarizes the assets acquired and liabilities assumed in connection with the Winslow acquisition as of December 31, 2019. Estimated Fair Value Assets Cash $ 1,111,000 Cash deposits with clearing organizations 207,000 Securities owned at fair value 1,111,000 Receivables from broker dealers and clearing organizations 49,000 Forgivable loans receivable 91,000 Other receivables, net 113,000 Prepaid expenses 432,000 Fixed assets, net 80,000 Intangible assets, net 4,400,000 Operating lease assets 1,206,000 Other assets 12,000 Total assets acquired 8,812,000 Liabilities Securities sold, not yet purchased at fair value 203,000 Accrued commissions and payroll payable 390,000 Accounts payable and accrued expenses 188,000 Operating lease liabilities 1,514,000 Deferred tax liability 1,196,000 Other 216,000 Total liabilities assumed 3,707,000 Net identifiable assets acquired $ 5,105,000 Goodwill 2,989,000 Total Purchase price $ 8,094,000 The intangible assets as of the closing date of the acquisition included: Amount Customer relationships 4,100,000 Brand name 300,000 $ 4,400,000 Indications of fair value of the intangible assets acquired in connection with the acquisition were determined using either the income, market or replacement cost methodologies. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized. The customer relationships are being amortized on an accelerated basis over an estimated useful life of twelve years and the brand name is being amortized on a straight-line basis over five years . Initial purchase price $ 3,200,000 Additional consideration payable (net operating capital) 873,000 Earnout (contingent consideration) 4,021,000 Total purchase price $ 8,094,000 Pro Forma Financial Information The following table presents the unaudited pro forma combined results of operations of the Company and Winslow for the three and six months ended March 31, 2020 and 2019 as if the acquisition of Winslow had occurred on October 1, 2018. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company’s fiscal year 2019. Three Months Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Net revenues $ 54,534,000 $ 49,258,000 $ 108,665,000 $ 110,085,000 Net Income (Loss) $ (2,460,000 ) $ (3,180,000 ) $ (3,887,000 ) $ (2,324,000 ) Net Income (Loss) attributable to common stockholders $ (1,763,000 ) $ (3,180,000 ) $ (3,284,000 ) $ (2,324,000 ) Net income (loss) attributable to common stockholders per common share: Basic $ (0.13 ) $ (0.25 ) $ (0.25 ) $ (0.18 ) Diluted $ (0.13 ) $ (0.25 ) $ (0.25 ) $ (0.18 ) Contingent Consideration Set forth below are changes in the carrying value of the contingent consideration for the six months ended March 31, 2020 related to acquisitions: Fair value of contingent consideration at September 30, 2019 $ 1,620,000 Fair value of contingent consideration in connection with 2020 Tax & Accounting acquisitions 1,595,000 Fair value of contingent consideration in connection with Winslow acquisition 4,021,000 Payments (176,000 ) Change in fair value 49,000 Fair value of contingent consideration at March 31, 2020 $ 7,109,000 Disposal of National Tax Branch In January 2020, the Company sold one of its National Tax branches for a note in the aggregate principal amount of $636,000 which, after allocating a portion of goodwill and unamortized intangibles of $239,000 and $100,000 , respectively, resulted in a gain on disposal of $297,000 . Principal and interest on the note is payable monthly over 120 months with an interest rate of 3% per annum. Notes receivables are included in other receivables in the statement of financial condition. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangibles consisted of the following at March 31, 2020 and September 30, 2019 : March 31, 2020 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 15,176,000 $ 5,143,000 $ 10,033,000 3-12 Brand name 1,010,000 133,000 877,000 3-5 Software license 45,000 34,000 11,000 3 Total $ 16,231,000 $ 5,310,000 $ 10,921,000 September 30, 2019 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 9,326,000 $ 4,614,000 $ 4,712,000 3-10 Brand name 710,000 — 710,000 Indefinite Software license 45,000 26,000 19,000 3 Total $ 10,081,000 $ 4,640,000 $ 5,441,000 Amortization expense associated with intangible assets for the three months ended March 31, 2020 and 2019 was $560,000 and $289,000 , respectively. Amortization expense associated with intangible assets for the six months ended March 31, 2020 and 2019 was $847,000 and $517,000 , respectively. The estimated future amortization expense of the finite lived intangible assets for the next five fiscal years and thereafter is as follows: Fiscal year ending Six months ending September 30, 2020 $ 1,128,000 2021 2,010,000 2022 1,835,000 2023 1,369,000 2024 1,050,000 Thereafter 3,529,000 Total $ 10,921,000 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 6 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, Legal $ 803,000 $ 900,000 Audit 220,000 239,000 Telecommunications 116,000 125,000 Data services 409,000 296,000 Regulatory 399,000 292,000 Settlements 1,048,000 1,817,000 Deferred rent — 772,000 Other 4,378,000 4,202,000 Total $ 7,373,000 $ 8,643,000 At March 31, 2020 , other primarily consists of $177,000 for investment banking deal expense accruals, $1,635,000 for soft dollar accruals, $430,000 for finance obligation of the implementation costs of the general ledger system, $80,000 for tax return preparation fees and $49,000 for rent. At September 30, 2019 , other primarily consists of $319,000 for investment banking deal expense accruals, $1,188,000 for soft dollar accruals, $119,000 for tax return preparation fees, $595,000 for finance obligation of the annual subscription fee and implementation costs of the new general ledger system, $380,000 for fixed assets acquired but not paid, $396,000 for rent and $228,000 for clearing fees. |
PER SHARE DATA
PER SHARE DATA | 6 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
PER SHARE DATA | PER SHARE DATA Basic net income (loss) per share of common stock attributable to the Company is computed on the basis of the weighted average number of shares of common stock outstanding. Diluted net income (loss) per share is computed on the basis of such weighted average number of shares of common stock outstanding plus the dilutive effect of incremental shares of common stock potentially issuable under outstanding options, warrants and unvested restricted stock units utilizing the treasury stock method. A reconciliation of basic and diluted common shares used in the computation of per share data follows: Three Month Period Ended March 31, Six Month Period Ended March 31, 2020 2019 2020 2019 Basic weighted-average shares 13,364,498 12,714,002 13,266,291 12,628,606 Effect of dilutive securities: Unvested restricted stock units — — — — Diluted weighted-average shares 13,364,498 12,714,002 13,266,291 12,628,606 At March 31, 2020 and 2019 , options, warrants and unvested restricted stock units totaling 9,628,445 and 6,258,439 shares, respectively, were excluded from the computation of diluted net income (loss) per share as their effect would have been anti-dilutive. |
OFF BALANCE SHEET RISK AND CONC
OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK | OFF BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK The Company is engaged in trading and providing a broad range of securities brokerage and investment services to a diverse group of retail and institutional clientele, as well as corporate finance and investment banking services to corporations and businesses. Counterparties to the Company’s business activities include broker-dealers and clearing organizations, banks and other financial institutions. The Company uses clearing brokers to process transactions and maintain customer accounts for the Company on a fee basis. The Company permits the clearing firms to extend credit to its clientele secured by cash and securities in the client’s account. The Company’s exposure to credit risk associated with the non-performance by its customers and counterparties in fulfilling their contractual obligations can be directly impacted by volatile or illiquid trading markets, which may impair the ability of customers and counterparties to satisfy their obligations to the Company. The Company has agreed to indemnify the clearing brokers for losses they incur while extending credit to the Company’s clients. It is the Company’s policy to review, as necessary, the credit standing of its customers and counterparties. Amounts due from customers that are considered uncollectible by the clearing broker are charged back to the Company by the clearing broker when such amounts become determinable. Upon notification of a charge back, such amounts, in total or in part, are then either (i) collected from the customers, (ii) charged to the broker initiating the transaction and/or (iii) charged to operations, based on the particular facts and circumstances. The Company maintains cash in bank deposits, which, at times, may exceed federally insured limits. The Company has not experienced and does not expect to experience losses on such accounts. A short sale involves the sale of a security that is not owned in the expectation of purchasing the same security (or a security exchangeable) at a later date at a lower price. A short sale involves the risk of a theoretically unlimited increase in the market price of the security that would result in a theoretically unlimited loss. To the extent the Company invests in marketable securities, the Company is subject to various market risks related to the portfolio. |
NEW ACCOUNTING GUIDANCE
NEW ACCOUNTING GUIDANCE | 6 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
NEW ACCOUNTING GUIDANCE | NEW ACCOUNTING GUIDANCE In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires the lessee to recognize the right to use lease assets and lease liabilities that arise from leases, and present them in its statement of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous US GAAP requirements, which did not require lease assets and lease liabilities to be recognized for most leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, have not significantly changed from previous US GAAP requirements. The Company adopted the provisions of Topic 842 on October 1, 2019, using the modified retrospective approach and the option presented under ASU 2018-11 to transition only active leases as of October 1, 2019. All comparative periods prior to October 1, 2019 are not adjusted and continue to be reported in accordance with Topic 840. The Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allowed the Company to carryforward the historical lease classification. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off the Company’s consolidated statements of financial condition which resulted in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Adoption of the new standard resulted in the recording of right-of-use assets and corresponding lease liabilities of $14,720,000 and $16,309,000 , respectively, as of October 1, 2019. The difference between the right-of-use assets and the lease liabilities was recorded to eliminate existing deferred rent balances and remaining balances of lease incentives recorded under Topic 840. The adoption of the new standard did not materially impact the Company's consolidated statements of operations and had no impact on the Company's consolidated statements of cash flows. The Company's current lease arrangements expire through 2032. See Note 21 for further information. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for the Fair Value Measurement," which removes or modifies certain current disclosures, and adds additional disclosures. The changes are meant to provide more relevant information regarding valuation techniques and inputs used to arrive at measures of fair value, uncertainty in the fair value measurements, and how changes in fair value measurements impact an entity's performance and cash flows. Certain disclosures in ASU 2018-13 will need to be applied on a retrospective basis and others on a prospective basis. The standard is effective for the Company beginning October 1, 2020 for both interim and annual periods. Early adoption is permitted. The company is currently assessing the impact that the adoption of ASU 2018-13 will have on its financial statements. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes". The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for the Company's fiscal year beginning October 1, 2021, with early adoption permitted. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The company is currently assessing the impact that the adoption of ASU 2019-12 will have on its financial statements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Litigation and Regulatory Matters The Company and its subsidiaries are defendants or respondents in various pending and threatened arbitrations, administrative proceedings and lawsuits seeking compensatory damages. Several cases have no stated alleged damages. Claim amounts are infrequently indicative of the actual amounts the Company will be liable for, if any. Further, the Company has a history of collecting amounts awarded in these types of matters from its registered representatives that are still affiliated, as well as from those that are no longer affiliated. Many of these claimants also seek, in addition to compensatory damages, punitive or treble damages, and all seek interest, costs and fees. These matters arise in the normal course of business. The Company intends to vigorously defend itself in these actions, and the ultimate outcome of these matters cannot be determined at this time. On July 3, 2019, a lawsuit was filed against National Securities Corporation, National Asset Management, Inc., the Company, the Company’s current board members and certain former board members, certain officers of the Company, John Does 1–10, and the Company as a nominal defendant, in the United States District Court for the Southern District of New York, captioned Kay Johnson v. National Securities Corporation, et al. , Case No. 1:19-cv-06197-LTS. The complaint presents three purported derivative causes of action on behalf of the Company, and five causes of action by the plaintiff directly. As part of the derivative claims, the complaint generally alleges that certain of the individual defendants failed to establish and maintain adequate internal controls to ensure that the Company’s board of directors (the “Board”) acted in accordance with its fiduciary duties to prevent and uncover alleged legal and regulatory misconduct and wrongdoing on the part of a National officer. As part of its claims brought directly by the plaintiff, the complaint generally alleges that certain individual and corporate defendants wrongfully terminated the employment of the plaintiff in violation of the Dodd-Frank Act and applicable common law, or conspired to do so. The complaint further alleges that certain corporate defendants violated the Equal Pay Act with regards to the plaintiff’s compensation. The complaint seeks monetary damages in favor of the Company, an order directing the Company’s board members to take actions to enhance the Company’s governance, compensatory and punitive damages in favor of the plaintiff, and attorneys’ fees and costs. On February 2, 2020, the plaintiff filed an amended complaint presenting additional causes of action. The Company has notified its insurer of the lawsuit and believes it has valid defenses to the asserted claims of the complaint. On March 18, 2020, the defendants filed a motion to dismiss the amended complaint. The plaintiff filed an opposition to the defendants’ motion to dismiss on April 15, 2020, and the defendants filed a reply in further support of the motion to dismiss on May 6, 2020. In accordance with applicable accounting standards, the Company establishes an accrued liability for contingent litigation and regulatory matters when those matters present loss contingencies that are both probable and can be reasonably estimated. In such cases, there still may be an exposure to loss in excess of any amounts reasonably estimated and accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability, but continues to monitor, in conjunction with any outside counsel handling a matter, further developments that would make such loss contingency both probable and reasonably estimable. Once the Company establishes an accrued liability with respect to a loss contingency, the Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established, and any appropriate adjustments are made each quarter. In making these decisions, management bases its judgments on its knowledge of the situations, consultations with legal counsel and its historical experience in resolving similar matters. In many lawsuits, arbitrations and regulatory proceedings, it is not possible to determine whether a liability has been incurred or to estimate the amount of that liability until the matter is close to resolution. Because of the broad differences in value ascribed to each case by each plaintiff and the Company, management cannot estimate the possible loss or range of loss, if any, in excess of any amounts reasonably estimated and accrued. At March 31, 2020 and September 30, 2019 , the Company accrued approximately $1,048,000 and $1,817,000 , respectively in liabilities for contingent litigation and regulatory matters. These amounts are included in accounts payable and accrued expenses in the condensed consolidated statements of financial condition. Amounts charged to operations for settlements and potential losses during the three months ended March 31, 2020 and 2019 were $(115,000) and $1,960,000 , respectively, and during the six months ended March 31, 2020 and 2019 , were $274,000 and $2,483,000 , respectively. These amounts are included in other administrative expenses in the condensed consolidated statements of operations. The Company has included in professional fees, litigation and arbitration related expenses of $465,000 and $417,000 for the three months ended March 31, 2020 and 2019 , respectively, and $906,000 and $888,000 for the six months ended March 31, 2020 and 2019 , respectively. Other Commitments As of March 31, 2020 , the Company and its subsidiaries had one outstanding letter of credit, which has been issued in the maximum amount of $962,000 as security for a property lease, and which is collateralized by the restricted cash as reflected in the condensed consolidated statements of financial condition. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 6 Months Ended |
Mar. 31, 2020 | |
Disclosure Text Block [Abstract] | |
NET CAPITAL REQUIREMENTS | NET CAPITAL REQUIREMENTS NSC is subject to the SEC's Uniform Net Capital Rule (Rule 15c3-1), which, among other things, requires the maintenance of minimum net capital. At March 31, 2020 , NSC had net capital of $2,100,158 which was $1,100,158 in excess of its required minimum net capital of $1,000,000 . NSC is exempt from the provisions of Rule 15c3-3 since it is an introducing broker-dealer that clears all transactions on a fully disclosed basis and promptly transmits all customer funds and securities to clearing brokers. WEC is also subject to the Net Capital Rule, which, among other things, requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined under the Net Capital Rule, shall not exceed 15 to 1. At March 31, 2020 , WEC had net capital of $1,086,934 which was $986,934 in excess of its required net capital of $100,000 . WEC's ratio of aggregate indebtedness to net capital was 0.7 to 1. WEC is exempt from the provisions of Rule 15c3-3 since it is an introducing broker-dealer that clears all transactions on a fully disclosed basis and promptly transmits all customer funds and securities to clearing brokers. Advances, dividend payments and other equity withdrawals from NSC and WEC are restricted by the regulations of the SEC, and other regulatory agencies. These regulatory restrictions may limit the amounts that a subsidiary may dividend or advance to the Company. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Stock Options Information with respect to stock option activity during the six months ended March 31, 2020 follows: Options Weighted Weighted Weighted Aggregate Outstanding at September 30, 2019 604,200 $ 6.19 $ 1.58 2.29 $ — Forfeited (3,500 ) $ 5.00 $ 2.30 $ — Outstanding at March 31, 2020 600,700 $ 6.20 $ 1.57 1.78 $ — Vested and exercisable at March 31, 2020 600,700 $ 6.20 $ 1.57 1.78 $ — All compensation expense associated with the grants of stock options was recognized in prior years. Warrants The following table summarizes information about warrant activity during the six months ended March 31, 2020 : Warrants Weighted Weighted Average Remaining Contractual Term Outstanding at September 30, 2019 5,398,907 $ 3.25 2.30 Forfeited — $ — Outstanding and exercisable at March 31, 2020 5,398,907 $ 3.25 1.80 Restricted Stock Units and Awards A summary of the Company's non-vested restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) for the six months ended March 31, 2020 is as follows: Shares Weighted Non-vested restricted stock units and awards at September 30, 2019 3,318,640 $ 10,006,000 Granted 741,216 1,938,000 Vested (419,159 ) (1,476,000 ) Forfeited (11,859 ) (38,000 ) Non-vested restricted stock units and awards at March 31, 2020 3,628,838 $ 10,430,000 In December 2019, the Company granted 702,000 RSUs to certain employees of the Company. RSUs vest based on certain performance conditions. The fair value of the RSU awards issued in December 2019 was $1,839,000 . In January 2020, the Company granted 39,216 RSUs to an employee of the Company. RSUs vest based on certain service conditions. The fair value of the RSU awards issued in January 2020 was $99,000 . One RSU or RSA gives the right to one share of the Company’s common stock. RSUs and RSAs that vest based on service and performance are measured based on the fair values of the underlying stock on the date of grant. The Company used a Lattice model to determine the fair value of the RSUs with a market condition. Compensation with respect to RSU and RSA awards is expensed on a straight-line basis over the vesting period. For the three and six months ended March 31, 2020 , the Company recognized compensation expense of $538,000 and $1,445,000 , respectively, related to RSUs and RSAs. For the three and six months ended March 31, 2019 , the Company recognized compensation expense of $1,480,000 and $2,802,000 , respectively, related to RSUs and RSAs. At March 31, 2020 , unrecognized compensation with respect to RSUs and RSAs amounted to $5,624,000 , assuming all performance-based compensation will vest. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company files a consolidated federal income tax return and certain combined state and local income tax returns with its subsidiaries. Income taxes for the three and six month period ended March 31, 2020 and 2019 are based on the estimated annual effective tax rate. Each quarter the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. The effective tax rate for the three and six month period ended March 31, 2020 differs from the federal statutory income tax rate principally due to non-deductible expenses, state and local income taxes and income (loss) allocated to the non-controlling interest for which no tax expense (benefit) was provided. At March 31, 2020 , the Company's net deferred tax asset is principally comprised of net operating loss carryforwards. Management believes that is more likely than not that its deferred tax assets will be realized and, accordingly, has not provided a valuation allowance against such amount. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company has two reportable segments. The brokerage and advisory services segment includes broker-dealer and investment advisory services, the sale of insurance products and licensed mortgage brokerage services provided by NSC, NAM, National Insurance, Prime Financial, Winslow and GC. The tax and accounting services segment includes tax preparation and accounting services provided by National Tax. The Corporate pre-tax income (loss) consists of certain items that have not been allocated to reportable segments. Segment information for the three and six months ended March 31, 2020 and 2019 is as follows: Brokerage and Tax and Corporate Total Three Months Ended March 31, 2020 Revenues $ 50,225,000 $ 4,308,000 $ 1,000 $ 54,534,000 Pre-tax income (loss) (2,926,000 ) 1,442,000 (1,429,000 ) (a) (2,913,000 ) Assets 64,517,000 5,341,000 24,498,000 (b) 94,356,000 Depreciation and amortization 422,000 194,000 196,000 812,000 Interest 24,000 — — 24,000 Capital expenditures (reimbursements) (95,000 ) 47,000 38,000 (10,000 ) 2019 Revenues $ 42,578,000 $ 4,122,000 $ — $ 46,700,000 Pre-tax income (loss) (3,458,000 ) 1,576,000 (2,011,000 ) (a) (3,893,000 ) Assets 49,823,000 7,032,000 13,047,000 (b) 69,902,000 Depreciation and amortization 205,000 133,000 123,000 461,000 Interest 10,000 — — 10,000 Capital expenditures 160,000 44,000 645,000 849,000 Brokerage and Tax and Corporate Total Six Months Ended March 31, 2020 Revenues $ 100,484,000 $ 5,239,000 $ 2,000 $ 105,725,000 Pre-tax income (loss) (2,470,000 ) 353,000 (3,020,000 ) (a) (5,137,000 ) Assets 64,517,000 5,341,000 24,498,000 (b) 94,356,000 Depreciation and amortization 675,000 325,000 342,000 1,342,000 Interest 38,000 — — 38,000 Capital expenditures (reimbursements) (73,000 ) 47,000 137,000 111,000 2019 Revenues $ 99,910,000 $ 4,897,000 $ — $ 104,807,000 Pre-tax income (loss) (251,000 ) 1,073,000 (3,392,000 ) (a) (2,570,000 ) Assets 49,823,000 7,032,000 13,047,000 (b) 69,902,000 Depreciation and amortization 398,000 204,000 256,000 858,000 Interest 18,000 — — 18,000 Capital expenditures 171,000 71,000 758,000 1,000,000 (a) Consists of professional fees, depreciation expense and other expenses not allocated to reportable segments by management. (b) Consists principally of deferred tax assets, cash, prepaid and fixed asset balances held at Corporate. |
ACQUISITION OF CONTROLLING INTE
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY | 6 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY | ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY On November 14, 2018, B. Riley Financial, Inc. (“B. Riley”) and FBIO Acquisition, Inc. (“FBIO Acquisition”), a subsidiary of Fortress Biotech, Inc. (“Fortress”), entered into a stock purchase agreement whereby FBIO Acquisition agreed to sell to a wholly-owned subsidiary of B. Riley FBIO Acquisition’s majority stake in the Company (the “FBIO Sale”). Under the terms of the agreement, B. Riley agreed to purchase 7,037,482 shares of the Company's common stock from FBIO Acquisition, which represented approximately 56.1% of the Company's outstanding common stock and Fortress’s entire economic interest in the Company. An aggregate of 3,010,054 shares were purchased immediately at $ 3.25 per share. After approval from FINRA was received on February 4, 2019, B. Riley purchased an additional 3,149,496 shares of the Company's common stock on February 11, 2019 and assigned its right to purchase the remaining 877,932 shares to third parties. Further, in connection with the FBIO Sale, the Company entered into an agreement with B. Riley (the “B. Riley Agreement”), pursuant to which B. Riley agreed to certain customary standstill provisions, effective as of the date of the B. Riley Agreement through December 31, 2021 (the “Standstill Period”), prohibiting B. Riley and any of its affiliates or associates, directly or indirectly, from among other things: (i) acquiring, agreeing to acquire or otherwise seeking to acquire any beneficial interest in the Company’s share capital or any of its material assets other than (x) the FBIO Sale and (y) pursuant to B. Riley’s pro rata participation rights described in the B. Riley Agreement; (ii) making a take-over bid, tender offer or exchange offer for all or any part of the Company’s share capital; (iii) announcing, or taking any action which would require the announcement of, any proposals by B. Riley for any business combination or any other similar transaction involving the securities of the Company or its material assets or businesses; (iv) soliciting proxies with respect to any securities of the Company or otherwise influencing any shareholders of the Company for any action or transaction; (v) requesting that the Board expand or reduce the number of directors or the number of Board designees nominated by otherwise designated by B. Riley; (vi) take any other action that would constitute a “business combination” for purposes of Section 203 of the Delaware General Corporation Law (including any successor statute thereto) (“Section 203”) (other than any transactions covered by Section 203(c)(3)(v) of the Delaware General Corporation Law that are in the ordinary course of the Company’s business operations); (vii) make any public announcement with respect to any of the foregoing, except as, and solely to the extent, legally required or compelled (and provided that the reason for any such required announcement is not the result of any action taken by B. Riley) or (viii) contest the validity of the standstill terms of the B. Riley Agreement or initiate or participate in any judicial proceeding to amend, waive, terminate or seek a release of the restrictions of such standstill terms. Pursuant to the B. Riley Agreement, the Company granted to B. Riley the right to appoint B. Riley representatives to attend meetings of the Board and any committee thereof in a non-voting observer capacity. If B. Riley’s beneficial ownership of the Company’s common stock is reduced to below 24% , its rights to designate board observers will be reduced to one board observer, and if B. Riley’s beneficial ownership of the Company’s common stock is reduced to below 5% , its rights to designate board observers will cease. The B. Riley Agreement further permits B. Riley to participate pro rata in any bona fide common stock equity offering by the Company (including the offering of any securities convertible into common stock) if the offering price of the Company’s common stock in such offering is equal to or less than $3.25 per share, as adjusted for stock splits, stock dividends, stock combinations and similar events, subject to certain exceptions. This participation right will end upon the earlier of (x) the end of the Standstill Period and (y) a change in control of the Company, as defined in the B. Riley Agreement. The Agreement also contains non-solicitation terms that prohibit either the Company or B. Riley, or any of their respective affiliates, associates and related parties, from hiring any executive officer or member of senior management of the other party during the Standstill Period, subject to certain exceptions. In connection with the Agreement, the Board waived the applicability of Section 203 of the Delaware General Corporation Law to B. Riley in connection with the FBIO Sale. Upon final closing of the FBIO Sale, the warrants held by FBIO Acquisition ceased to be outstanding. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered variable interest entities (“VIEs”) under the accounting guidance. These Funds are established primarily to make and manage investments in equity or convertible debt securities of privately held companies that the Company, as investment advisor to the Funds, believes possess innovative or disruptive technologies and present opportunities for an initial public offering (“IPO”) or other similar liquidity event within approximately one to five years from the date of investment. The Funds intend to hold the investments until an IPO or other similar liquidity event and then to make distributions to its investors when contractually permitted, which is estimated to be approximately six months following such IPO or liquidity event. The Company earns fees from the Funds in the form of placement agent fees and carried interest. For placement agent fees, the Company receives a cash fee of generally 7% to 10% of the amount of raised capital for the Funds and the fee is recognized at the time the placement services occurred. The Company receives carried interest as a percentage allocation ( 8% to 15% ) of the profits of the Funds as compensation for asset management services provided to the Funds and it is recognized at the time of distribution. Once fund investors have received distributions in an amount equal to one hundred percent ( 100% ) of their total capital contributions, the Company as the manager of the Funds will be entitled to share in any profits of the Funds to the extent of the carried interest. As the fee arrangements under such agreements are arm's-length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs. Placement agent fees attributable to such arrangements for the three months ended March 31, 2020 and 2019 were $852,000 and $6,111,000 , respectively, and are included in investment banking in the condensed consolidated statements of operations. Placement agent fees attributable to such arrangements for the six months ended March 31, 2020 and 2019 were $9,260,000 and $25,090,000 , respectively, and are included in investment banking in the condensed consolidated statements of operations. |
REVENUES FROM CONTRACTS AND SIG
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS | REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS Performance Obligations The Company recognizes revenue from contracts with customers when, or as, the Company satisfies its performance obligations by transferring the promised goods or services to the customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. Transaction Price and Variable Consideration The amount of revenue recognized reflects the consideration (“transaction price”) the Company expects to be entitled to in exchange for the transfer of the goods or services to the customer services. In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of influence, such as market volatility or the judgment and actions of third parties. Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer, excluding unconditional rights to consideration that are presented as receivables. Contract Liabilities Contract liabilities represent the Company’s obligation to deliver products or provide data to customers in the future for which cash has already been received. The following provides detailed information on the recognition of the Company’s revenues from contracts with customers: Commissions and Transaction Fees and Clearing Services . The Company earns commission and transaction fee and clearing services revenue based on the execution of transactions for clients in stocks, mutual funds, variable annuities and other financial products and services as well as from trailing commissions. Trade execution and settlement, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Commission and transaction fee and clearing services revenues are recognized at a point in time on trade-date. Commission and transaction fee and clearing services revenues are generally paid on settlement date and the Company records a receivable between trade-date and payment on settlement date. For trailing commissions, the performance obligation is satisfied at the time of the execution of the transactions but the amount to be received for trailing commissions is uncertain, as it is dependent on the value of the investments at future points in time as well as the length of time the investor holds the investments, both of which are highly susceptible to variable factors outside the Company’s influence. The Company does not believe that it can overcome this constraint until the market value of the investment and the investor activities are known, which are usually monthly or quarterly. The Company’s consolidated statement of operations reflects trailing commissions for services performed and performance obligations satisfied in previous periods and are recognized in the period that the constraint is overcome. Investment Banking . The Company provides clients with a full range of investment banking services. Investment banking services include underwriting and placement agent services in both equity and debt, including private equity placements, initial public offerings, follow-on offerings and equity-linked convertible securities transactions and private debt. Underwriting and placement agent revenues are recognized at a point in time on trade-date, as the client obtains the control and benefit of the investment banking offering at that point. Costs associated with investment banking transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded and are recorded on a gross basis as the Company is acting as a principal in the arrangement. Any expenses reimbursed by the Company’s clients are recognized as investment banking revenues. Where the Company is the lead underwriter, revenue and expenses will be first allocated to other members of a syndicate because the Company is acting as an agent for the syndicate. Accordingly, the Company records revenue on a net basis. When the Company is not the lead underwriter, the Company will recognize its share of revenue and expenses on a gross basis, because the Company is acting as the principal. Under accounting standards in effect for prior periods, the Company recognized all underwriting revenue on a net basis. The Company’s revenues from advisory services primarily consist of fees generated in connection with mergers and acquisition and advisory transactions. Advisory fees from mergers and acquisitions engagements are recognized at a point in time when the related transaction is completed, as the performance obligation is to successfully execute a specific transaction. Fees received prior to the completion of the transaction are deferred within other liabilities in the consolidated statements of financial condition. A significant portion of the fees the Company receives for advisory services are considered variable as they are contingent upon a future event and are excluded from the transaction price until the uncertainty associated with the variable consideration is subsequently resolved, which is expected to occur upon achievement of the specified milestone. Payment for advisory services is generally due promptly upon completion of a specified milestone or, for retainer fees, periodically over the course of the engagement. The Company recognizes a receivable between the date of completion of the milestone and payment by the customer. Expenses associated with investment banking advisory engagements are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at a point in time. All other investment banking advisory related costs are expensed as incurred. All investment banking advisory expenses are recognized within their respective expense category on the consolidated statements of operations and any expenses reimbursed by the clients are recognized as investment banking revenues. The Company controls the service as it is transferred to the customer, and is therefore acting as a principal. Accordingly, the Company records revenues and out-of-pocket reimbursements on a gross basis. Under accounting standards in effect for prior periods, the Company recorded expenses net of client reimbursements and/or netted against revenues. Investment Advisory/Asset Management Fees . The Company receives management and performance fees in connection with investment advisory services provided to various funds and accounts, which are satisfied over time as the customer receives the benefits of the services evenly throughout the term of the contract. Management and performance fees are considered variable as they are subject to fluctuation (e.g., changes in assets under management, market performance) and/or are contingent on a future event during the measurement period (e.g., meeting a specified benchmark) and are recognized only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. Management fees are generally based on month-end assets under management or an agreed upon notional amount and are included in the transaction price at the end of each month when the assets under management or notional amount is known. Performance fees are received when the return on assets under management for a specified performance period exceed certain benchmark returns, “high-water marks” or other performance targets. The performance period related to performance fees is annual, semiannual or at the recognition of a liquidation event. Accordingly, performance fee revenue will generally be recognized only at the end of the performance period to the extent that the benchmark return has been met. Tax Preparation and Accounting. The Company charges fees in connection with tax preparation and accounting services. Revenues are recorded upon completion of the services. Disaggregation of Revenue The following presents the Company’s revenues from contracts with customers disaggregated by major business activity and segment for the three and six months ended March 31, 2020 and 2019: For the Three Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 33,333,000 $ — $ — $ 33,333,000 Investment banking 7,557,000 — — 7,557,000 Investment advisory 9,273,000 — — 9,273,000 Tax preparation and accounting — 4,308,000 — 4,308,000 Sub-total revenue from contracts with customers 50,163,000 4,308,000 — 54,471,000 Other revenue 62,000 — 1,000 63,000 Total revenue $ 50,225,000 $ 4,308,000 $ 1,000 $ 54,534,000 For the Six Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 58,274,000 $ — $ — $ 58,274,000 Investment banking 22,785,000 — — 22,785,000 Investment advisory 16,662,000 — — 16,662,000 Tax preparation and accounting — 5,239,000 — 5,239,000 Sub-total revenue from contracts with customers 97,721,000 5,239,000 — 102,960,000 Other revenue 2,763,000 — 2,000 2,765,000 Total revenue $ 100,484,000 $ 5,239,000 $ 2,000 $ 105,725,000 For the Three Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 24,389,000 $ — $ — $ 24,389,000 Investment banking 9,797,000 — — 9,797,000 Investment advisory 5,514,000 — — 5,514,000 Tax preparation and accounting — 4,122,000 — 4,122,000 Sub-total revenue from contracts with customers 39,700,000 4,122,000 — 43,822,000 Other revenue 2,878,000 — — 2,878,000 Total revenue $ 42,578,000 $ 4,122,000 $ — $ 46,700,000 For the Six Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 47,549,000 $ — $ — $ 47,549,000 Investment banking 36,868,000 — — 36,868,000 Investment advisory 11,372,000 — — 11,372,000 Tax preparation and accounting — 4,897,000 — 4,897,000 Sub-total revenue from contracts with customers 95,789,000 4,897,000 — 100,686,000 Other revenue 4,121,000 — — 4,121,000 Total revenue $ 99,910,000 $ 4,897,000 $ — $ 104,807,000 Information on Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at March 31, 2020 . Investment banking advisory fees that are contingent upon completion of a specific milestone are also excluded as the fees are considered variable and not included in the transaction price at March 31, 2020 . Contract Balances The timing of the Company’s revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Contract Costs Incremental contract costs are expensed when incurred when the amortization period of the asset that would have been recognized is one year or less. Otherwise, incremental contract costs are recognized as an asset and amortized over time as services are provided to a customer. |
LEASES
LEASES | 6 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES The Company’s lease agreements primarily cover office space in various states expiring at various dates. The Company’s leases are predominantly operating leases, which are included in operating lease assets and operating lease liabilities on the Company’s condensed consolidated statements of financial condition. The Company’ current lease arrangement expire from 2020 through 2032, some of which include options to extend or terminate the lease. However, the Company in general is not reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options are not considered in the lease term or the right-of-use asset and lease liability balances. The Company’s lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances. The Company has leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred. These variable payments were excluded from the right-of-use asset and lease liability balances since they are not fixed or in-substance fixed payments. The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component. For leases with terms greater than 12 months, right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its incremental borrowing rate. The Company's lease agreements generally do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates the Company’s incremental borrowing rate based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the condensed consolidated statements of financial condition. The Company recognizes lease expense for these leases on a straight-line basis over the term of the lease. In October 2018, the Company entered into an agreement to lease equipment under a finance lease for 24 months . The equipment under the lease is collateral for the lease obligation and is included within fixed assets in the condensed consolidated statements of financial condition. The leased equipment is amortized on a straight line basis over 7 years . The interest rate related to the lease obligation is 5.6 percent and the maturity date is September 2020. The finance lease obligation is included within other liabilities in the condensed consolidated statements of financial condition. The components of lease expense were as follows: Three Month Period Ended March 31, 2020 Six Month Period Ended March 31, 2020 Operating lease cost: $ 1,332,000 $ 2,434,000 Finance lease cost: Amortization of finance lease assets $ 20,000 $ 39,000 Interest on finance lease liabilities 3,000 7,000 Total finance lease cost $ 23,000 $ 46,000 Sublease income: $ 108,000 $ 108,000 The table below summarizes the Company’s scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated statements of financial condition as of March 31, 2020 : Fiscal Year Ending September 30, Operating Leases Finance Lease Six months ending September 30, 2020 $ 2,181,000 $ 174,000 2021 4,118,000 — 2022 2,493,000 — 2023 2,333,000 — 2024 2,138,000 — Thereafter 7,471,000 — Total minimum lease payments 20,734,000 $ 174,000 Less: Amounts representing interest not yet incurred 4,076,000 3,000 Present value of lease obligations $ 16,658,000 $ 171,000 As of March 31, 2020 , the Company has an additional operating lease, primarily for additional office space in New Windsor, New York, that has not yet commenced. The following table presents the balances for operating and finance right-of-use assets and lease liabilities: Leases Classification March 31, 2020 Assets Operating lease assets Operating lease assets $ 14,515,000 Finance lease assets Fixed assets 374,000 Total lease assets $ 14,889,000 Liabilities Operating lease liabilities Operating lease liabilities $ 16,658,000 Finance lease liabilities Other liabilities 171,000 Total lease liabilities $ 16,829,000 The table below presents additional information related to the Company’s leases as of March 31, 2020 : Six Month Period Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 7,000 Operating cash flows from operating leases $ 1,767,000 Financing cash flows from finance leases $ 116,000 Weighted Average Remaining Lease Term: Operating Leases 7.30 years Weighted Average Discount Rate: Operating Leases 5.50 % |
LEASES | LEASES The Company’s lease agreements primarily cover office space in various states expiring at various dates. The Company’s leases are predominantly operating leases, which are included in operating lease assets and operating lease liabilities on the Company’s condensed consolidated statements of financial condition. The Company’ current lease arrangement expire from 2020 through 2032, some of which include options to extend or terminate the lease. However, the Company in general is not reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options are not considered in the lease term or the right-of-use asset and lease liability balances. The Company’s lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances. The Company has leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred. These variable payments were excluded from the right-of-use asset and lease liability balances since they are not fixed or in-substance fixed payments. The Company has lease agreements with lease and non-lease components. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component. For leases with terms greater than 12 months, right-of-use assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its incremental borrowing rate. The Company's lease agreements generally do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates the Company’s incremental borrowing rate based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter in determining the present value of future payments. Lease expense for net present value of payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less with purchase options or extension options that are not reasonably certain to be exercised are not recorded on the condensed consolidated statements of financial condition. The Company recognizes lease expense for these leases on a straight-line basis over the term of the lease. In October 2018, the Company entered into an agreement to lease equipment under a finance lease for 24 months . The equipment under the lease is collateral for the lease obligation and is included within fixed assets in the condensed consolidated statements of financial condition. The leased equipment is amortized on a straight line basis over 7 years . The interest rate related to the lease obligation is 5.6 percent and the maturity date is September 2020. The finance lease obligation is included within other liabilities in the condensed consolidated statements of financial condition. The components of lease expense were as follows: Three Month Period Ended March 31, 2020 Six Month Period Ended March 31, 2020 Operating lease cost: $ 1,332,000 $ 2,434,000 Finance lease cost: Amortization of finance lease assets $ 20,000 $ 39,000 Interest on finance lease liabilities 3,000 7,000 Total finance lease cost $ 23,000 $ 46,000 Sublease income: $ 108,000 $ 108,000 The table below summarizes the Company’s scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated statements of financial condition as of March 31, 2020 : Fiscal Year Ending September 30, Operating Leases Finance Lease Six months ending September 30, 2020 $ 2,181,000 $ 174,000 2021 4,118,000 — 2022 2,493,000 — 2023 2,333,000 — 2024 2,138,000 — Thereafter 7,471,000 — Total minimum lease payments 20,734,000 $ 174,000 Less: Amounts representing interest not yet incurred 4,076,000 3,000 Present value of lease obligations $ 16,658,000 $ 171,000 As of March 31, 2020 , the Company has an additional operating lease, primarily for additional office space in New Windsor, New York, that has not yet commenced. The following table presents the balances for operating and finance right-of-use assets and lease liabilities: Leases Classification March 31, 2020 Assets Operating lease assets Operating lease assets $ 14,515,000 Finance lease assets Fixed assets 374,000 Total lease assets $ 14,889,000 Liabilities Operating lease liabilities Operating lease liabilities $ 16,658,000 Finance lease liabilities Other liabilities 171,000 Total lease liabilities $ 16,829,000 The table below presents additional information related to the Company’s leases as of March 31, 2020 : Six Month Period Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 7,000 Operating cash flows from operating leases $ 1,767,000 Financing cash flows from finance leases $ 116,000 Weighted Average Remaining Lease Term: Operating Leases 7.30 years Weighted Average Discount Rate: Operating Leases 5.50 % |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 6 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT Paycheck Protection Program On April 10, 2020, NSC entered into a Promissory Note (the “NSC Note”) with Axos Bank as the lender (the “Lender”), pursuant to which the Lender agreed to make a loan to NSC under the Paycheck Protection Program (the “NSC Loan”) offered by the U.S. Small Business Administration (the “SBA”) pursuant to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to qualified small businesses (the “PPP”) in a principal amount of $5,523,738 . On April 15, 2020, WEC also entered into a Promissory Note (the “WEC Note” and together with the NSC Note, the “PPP Notes”) with the Lender, pursuant to which the Lender agreed to make a loan to WEC under the PPP (the “WEC Loan” and together with the NSC Loan, the “PPP Loans”) in a principal amount of $973,062 . The interest rate on each PPP Note is a fixed rate of 1% per annum. Interest is calculated by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. The applicable borrower is required to make monthly payments commencing on the first day of the first full calendar month following the end of the six (6) month period following the funding date, which was April 13, 2020 in the case of the NSC Note and April 16, 2020 in the case of the WEC Note (the “Deferral Period”), and such payments shall continue to be due and payable on the first day of each calendar month thereafter until the date that is two (2) years following the funding date (the “Maturity Date”), or April 13, 2022 in the case of the NSC Note and April 16, 2022 in the case of the WEC Note. Monthly payment amounts are based on repayment of interest accrued during the Deferral Period, interest accruing until and including the Maturity Date, and full amortization of the outstanding principal balance. The proceeds of each PPP Loan are to be used to pay for payroll costs, continuation of group health care benefits during periods of paid sick, medical, or family leave, or insurance premiums; salaries or commissions or similar compensation; rent; utilities; and interest on certain other outstanding debt; however, 75% of the proceeds of each PPP Loan must be used for payroll purposes. According to the terms of the PPP, all or a portion of loans under the PPP may be forgiven if certain conditions set forth in the CARES Act and the rules of the SBA are met. At its option, each of NSC and WEC may prepay all or a portion of its PPP Loan without penalty. Each PPP Note includes events of default, the occurrence and continuation of which would provide the Lender with the right to exercise remedies against NSC or WEC, as applicable, including the right to declare the entire unpaid principal balance under the applicable PPP Note and all accrued unpaid interest immediately due. COVID-19 Update and Action In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious virus, which has continued to spread, has adversely affected workforces, customers, economies and financial markets globally. It has also disrupted the normal operations of many businesses, including the Company’s. As a result of the spread of COVID-19, economic uncertainties have arisen, which are likely to negatively impact the Company’s businesses, financial condition, results of operations, cash flows, strategies and prospects. The extent of the impact of COVID-19 on the Company’s operational and financial performance will depend on developments that are highly uncertain and cannot be predicted, including the duration and spread of the outbreak and its impact on the Company’s clients, employees and vendors and the markets in which the Company operates its businesses. The extent to which COVID-19 may impact the Company’s financial condition or results of operations cannot be reasonably estimated at this time. The Company’s management put cost-savings plans into effect to mitigate the cash drain that potential, downward pressure on its business might cause. In particular, the Company’s management made the very difficult decision to downsize its staff, significantly reduce compensation for many employees and implement moratoriums in variable spending categories. The Company anticipates that these measures will significantly reduce cash outflows beginning with the Company’s third fiscal quarter, which began April 1, 2020. NSC and WEC have also applied for and received loans from the PPP, a significant part of the U.S. government’s pandemic stimulus. The Company anticipates the use of the proceeds from the PPP Loans will result in the repayment of the loans being forgiven. For more information, see the “Paycheck Protection Program” section above. B. Riley Proposal On April 30, 2020, B. Riley and the Company entered into a waiver of certain provisions of the B. Riley Agreement and in connection therewith, B. Riley amended its Schedule 13D filing relating to the Company and sent the Board a letter containing a proposal regarding the Company. The Company’s Board formed a Special Committee of non-executive, independent directors to review the B. Riley proposal. The Company does not anticipate having any further comment unless and until a definitive agreement is reached. |
NEW ACCOUNTING GUIDANCE (Polici
NEW ACCOUNTING GUIDANCE (Policies) | 6 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Guidance | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires the lessee to recognize the right to use lease assets and lease liabilities that arise from leases, and present them in its statement of financial condition. The recognition of these lease assets and lease liabilities represents a change from previous US GAAP requirements, which did not require lease assets and lease liabilities to be recognized for most leases. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee, have not significantly changed from previous US GAAP requirements. The Company adopted the provisions of Topic 842 on October 1, 2019, using the modified retrospective approach and the option presented under ASU 2018-11 to transition only active leases as of October 1, 2019. All comparative periods prior to October 1, 2019 are not adjusted and continue to be reported in accordance with Topic 840. The Company elected to utilize the package of practical expedients permitted within the new standard, which among other things, allowed the Company to carryforward the historical lease classification. The Company made an accounting policy election to keep leases with an initial term of 12 months or less off the Company’s consolidated statements of financial condition which resulted in recognizing those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. Adoption of the new standard resulted in the recording of right-of-use assets and corresponding lease liabilities of $14,720,000 and $16,309,000 , respectively, as of October 1, 2019. The difference between the right-of-use assets and the lease liabilities was recorded to eliminate existing deferred rent balances and remaining balances of lease incentives recorded under Topic 840. The adoption of the new standard did not materially impact the Company's consolidated statements of operations and had no impact on the Company's consolidated statements of cash flows. The Company's current lease arrangements expire through 2032. See Note 21 for further information. In August 2018, the FASB issued ASU 2018-13, "Fair Value Measurement - Disclosure Framework - Changes to the Disclosure Requirements for the Fair Value Measurement," which removes or modifies certain current disclosures, and adds additional disclosures. The changes are meant to provide more relevant information regarding valuation techniques and inputs used to arrive at measures of fair value, uncertainty in the fair value measurements, and how changes in fair value measurements impact an entity's performance and cash flows. Certain disclosures in ASU 2018-13 will need to be applied on a retrospective basis and others on a prospective basis. The standard is effective for the Company beginning October 1, 2020 for both interim and annual periods. Early adoption is permitted. The company is currently assessing the impact that the adoption of ASU 2018-13 will have on its financial statements. In December 2019, the FASB issued ASU 2019-12, "Simplifying the Accounting for Income Taxes". The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 will be effective for the Company's fiscal year beginning October 1, 2021, with early adoption permitted. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The company is currently assessing the impact that the adoption of ASU 2019-12 will have on its financial statements. |
Revenues from Contracts with Customers | Information on Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at March 31, 2020 . Investment banking advisory fees that are contingent upon completion of a specific milestone are also excluded as the fees are considered variable and not included in the transaction price at March 31, 2020 . Contract Balances The timing of the Company’s revenue recognition may differ from the timing of payment by customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Contract Costs Incremental contract costs are expensed when incurred when the amortization period of the asset that would have been recognized is one year or less. Otherwise, incremental contract costs are recognized as an asset and amortized over time as services are provided to a customer. Performance Obligations The Company recognizes revenue from contracts with customers when, or as, the Company satisfies its performance obligations by transferring the promised goods or services to the customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. Transaction Price and Variable Consideration The amount of revenue recognized reflects the consideration (“transaction price”) the Company expects to be entitled to in exchange for the transfer of the goods or services to the customer services. In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of influence, such as market volatility or the judgment and actions of third parties. Contract Assets Contract assets represent the Company’s right to consideration in exchange for goods or services that the Company has transferred to a customer, excluding unconditional rights to consideration that are presented as receivables. Contract Liabilities Contract liabilities represent the Company’s obligation to deliver products or provide data to customers in the future for which cash has already been received. The following provides detailed information on the recognition of the Company’s revenues from contracts with customers: Commissions and Transaction Fees and Clearing Services . The Company earns commission and transaction fee and clearing services revenue based on the execution of transactions for clients in stocks, mutual funds, variable annuities and other financial products and services as well as from trailing commissions. Trade execution and settlement, when provided together, represent a single performance obligation as the services are not separately identifiable in the context of the contract. Commission and transaction fee and clearing services revenues are recognized at a point in time on trade-date. Commission and transaction fee and clearing services revenues are generally paid on settlement date and the Company records a receivable between trade-date and payment on settlement date. For trailing commissions, the performance obligation is satisfied at the time of the execution of the transactions but the amount to be received for trailing commissions is uncertain, as it is dependent on the value of the investments at future points in time as well as the length of time the investor holds the investments, both of which are highly susceptible to variable factors outside the Company’s influence. The Company does not believe that it can overcome this constraint until the market value of the investment and the investor activities are known, which are usually monthly or quarterly. The Company’s consolidated statement of operations reflects trailing commissions for services performed and performance obligations satisfied in previous periods and are recognized in the period that the constraint is overcome. Investment Banking . The Company provides clients with a full range of investment banking services. Investment banking services include underwriting and placement agent services in both equity and debt, including private equity placements, initial public offerings, follow-on offerings and equity-linked convertible securities transactions and private debt. Underwriting and placement agent revenues are recognized at a point in time on trade-date, as the client obtains the control and benefit of the investment banking offering at that point. Costs associated with investment banking transactions are deferred until the related revenue is recognized or the engagement is otherwise concluded and are recorded on a gross basis as the Company is acting as a principal in the arrangement. Any expenses reimbursed by the Company’s clients are recognized as investment banking revenues. Where the Company is the lead underwriter, revenue and expenses will be first allocated to other members of a syndicate because the Company is acting as an agent for the syndicate. Accordingly, the Company records revenue on a net basis. When the Company is not the lead underwriter, the Company will recognize its share of revenue and expenses on a gross basis, because the Company is acting as the principal. Under accounting standards in effect for prior periods, the Company recognized all underwriting revenue on a net basis. The Company’s revenues from advisory services primarily consist of fees generated in connection with mergers and acquisition and advisory transactions. Advisory fees from mergers and acquisitions engagements are recognized at a point in time when the related transaction is completed, as the performance obligation is to successfully execute a specific transaction. Fees received prior to the completion of the transaction are deferred within other liabilities in the consolidated statements of financial condition. A significant portion of the fees the Company receives for advisory services are considered variable as they are contingent upon a future event and are excluded from the transaction price until the uncertainty associated with the variable consideration is subsequently resolved, which is expected to occur upon achievement of the specified milestone. Payment for advisory services is generally due promptly upon completion of a specified milestone or, for retainer fees, periodically over the course of the engagement. The Company recognizes a receivable between the date of completion of the milestone and payment by the customer. Expenses associated with investment banking advisory engagements are deferred only to the extent they are explicitly reimbursable by the client and the related revenue is recognized at a point in time. All other investment banking advisory related costs are expensed as incurred. All investment banking advisory expenses are recognized within their respective expense category on the consolidated statements of operations and any expenses reimbursed by the clients are recognized as investment banking revenues. The Company controls the service as it is transferred to the customer, and is therefore acting as a principal. Accordingly, the Company records revenues and out-of-pocket reimbursements on a gross basis. Under accounting standards in effect for prior periods, the Company recorded expenses net of client reimbursements and/or netted against revenues. Investment Advisory/Asset Management Fees . The Company receives management and performance fees in connection with investment advisory services provided to various funds and accounts, which are satisfied over time as the customer receives the benefits of the services evenly throughout the term of the contract. Management and performance fees are considered variable as they are subject to fluctuation (e.g., changes in assets under management, market performance) and/or are contingent on a future event during the measurement period (e.g., meeting a specified benchmark) and are recognized only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty is resolved. Management fees are generally based on month-end assets under management or an agreed upon notional amount and are included in the transaction price at the end of each month when the assets under management or notional amount is known. Performance fees are received when the return on assets under management for a specified performance period exceed certain benchmark returns, “high-water marks” or other performance targets. The performance period related to performance fees is annual, semiannual or at the recognition of a liquidation event. Accordingly, performance fee revenue will generally be recognized only at the end of the performance period to the extent that the benchmark return has been met. Tax Preparation and Accounting. The Company charges fees in connection with tax preparation and accounting services. Revenues are recorded upon completion of the services. |
RECEIVEABLES FROM BROKER-DEAL_2
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Brokers and Dealers [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Other receivables at March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, 2020 2019 Trailing fees $ 553,000 $ 947,000 Accounts receivable for tax and accounting services 1,298,000 686,000 Allowance for doubtful accounts - tax and accounting services (307,000 ) (282,000 ) Advances to registered representatives 1,866,000 1,383,000 Investment banking receivable 1,414,000 411,000 Advisory fees 527,000 483,000 Notes receivable 1,245,000 665,000 Other 2,165,000 1,379,000 Total other receivables, net $ 8,761,000 $ 5,672,000 |
FORGIVABLE LOANS RECEIVABLE (Ta
FORGIVABLE LOANS RECEIVABLE (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Forgivable Loan Activity | Forgivable loan activity for the six months ended March 31, 2020 is as follows: Balance, September 30, 2019 $ 1,834,000 Additions 2,803,000 Acquired through the Winslow acquisition (see Note 7) 91,000 Amortization (387,000 ) Reclassification to other receivables (254,000 ) Balance, March 31, 2020 $ 4,087,000 |
FAIR VALUE OF ASSETS AND LIAB_2
FAIR VALUE OF ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Values, Estimated Fair Values, and Fair Value Hierarchy of Financial Assets and Liabilities Measured on a Recurring Basis | The following tables present the carrying values and estimated fair values at March 31, 2020 and September 30, 2019 of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and information is provided on their classification within the fair value hierarchy. Such instruments are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk. March 31, 2020 Assets Carrying Value Level 1 Level 2 Total Estimated Fair Value Cash $ 18,847,000 $ 18,847,000 $ — $ 18,847,000 Cash deposits with clearing organizations 653,000 653,000 — 653,000 Receivables from broker-dealers and clearing organizations 4,638,000 — 4,638,000 4,638,000 Forgivable loans receivable 4,087,000 — 4,087,000 4,087,000 Other receivables, net 8,761,000 — 8,761,000 8,761,000 $ 36,986,000 $ 19,500,000 $ 17,486,000 $ 36,986,000 Liabilities Accrued commissions and payroll payable $ 12,773,000 $ — $ 12,773,000 $ 12,773,000 Accounts payable and accrued expenses 7,373,000 — 7,373,000 7,373,000 $ 20,146,000 $ — $ 20,146,000 $ 20,146,000 September 30, 2019 Assets Carrying Value Level 1 Level 2 Total Estimated Fair Value Cash $ 30,443,000 $ 30,443,000 $ — $ 30,443,000 Cash deposits with clearing organizations 436,000 436,000 — 436,000 Receivables from broker-dealers and clearing organizations 3,490,000 — 3,490,000 3,490,000 Forgivable loans receivable 1,834,000 — 1,834,000 1,834,000 Other receivables, net 5,672,000 — 5,672,000 5,672,000 $ 41,875,000 $ 30,879,000 $ 10,996,000 $ 41,875,000 Liabilities Accrued commissions and payroll payable $ 18,590,000 $ — $ 18,590,000 $ 18,590,000 Accounts payable and accrued expenses 8,643,000 — 8,643,000 8,643,000 $ 27,233,000 $ — $ 27,233,000 $ 27,233,000 The following tables present the financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 and September 30, 2019 : March 31, 2020 Assets Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Securities owned: Corporate stocks $ 1,836,000 $ 1,836,000 $ — $ — $ 1,836,000 Municipal bonds 229,000 229,000 — — 229,000 Restricted stock 731,000 — 731,000 — 731,000 Corporate bonds 101,000 101,000 — 101,000 Warrants 4,686,000 — 520,000 4,166,000 4,686,000 $ 7,583,000 $ 2,065,000 $ 1,352,000 $ 4,166,000 $ 7,583,000 Liabilities Contingent consideration $ 7,109,000 $ — $ — $ 7,109,000 $ 7,109,000 $ 7,109,000 $ — $ — $ 7,109,000 $ 7,109,000 September 30, 2019 Assets Carrying Value Level 1 Level 2 Level 3 Total Estimated Fair Value Securities owned: Corporate stocks $ 6,282,000 $ 6,282,000 $ — $ — $ 6,282,000 Municipal bonds 20,000 20,000 — — 20,000 Restricted stock 725,000 — 725,000 — 725,000 Warrants 5,454,000 — 1,529,000 3,925,000 5,454,000 $ 12,481,000 $ 6,302,000 $ 2,254,000 $ 3,925,000 $ 12,481,000 Liabilities Contingent consideration $ 1,620,000 $ — $ — $ 1,620,000 $ 1,620,000 $ 1,620,000 $ — $ — $ 1,620,000 $ 1,620,000 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in Level 3 assets measured at fair value on a recurring basis for the six months ended March 31, 2020 : Beginning Balance as of September 30, 2019 Net realized Gain or (losses) Net Change in Unrealized Appreciation (Depreciation) Purchases Sales Transfer Into Level 3 (a) Transfer Out of Level 3 Ending Balance as of March 31, 2020 Assets Warrants $ 3,925,000 $ — $ 99,000 $ — $ — $ 142,000 $ — $ 4,166,000 (a) The Company received warrants as part of investment banking transactions. |
Fair Value, Assets Measured on Recurring Basis | The table below presents information on the valuation techniques, significant unobservable inputs and their ranges for the Company’s financial assets measured at fair value on a recurring basis with a significant Level 3 balance. Financial Instruments Owned Fair Value Valuation Technique Significant Unobservable Input(s) Input/Range Warrants $ 4,166,000 Market Approach Discount for lack of marketability Volatility 22% - 44% 57% - 117% |
FIXED ASSETS (Tables)
FIXED ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed assets as of March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, Estimated Useful Lives Equipment and software $ 1,974,000 $ 1,835,000 3 - 7 Furniture and fixtures 840,000 761,000 5 Leasehold improvements 3,635,000 3,662,000 Lesser of useful Finance leases (primarily composed of computer equipment) 907,000 907,000 3 - 7 7,356,000 7,165,000 Less accumulated depreciation and amortization (2,593,000 ) (2,098,000 ) Fixed assets, net $ 4,763,000 $ 5,067,000 |
BUSINESS COMBINATION, CONTING_2
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The table below summarizes the assets acquired and liabilities assumed in connection with the Winslow acquisition as of December 31, 2019. Estimated Fair Value Assets Cash $ 1,111,000 Cash deposits with clearing organizations 207,000 Securities owned at fair value 1,111,000 Receivables from broker dealers and clearing organizations 49,000 Forgivable loans receivable 91,000 Other receivables, net 113,000 Prepaid expenses 432,000 Fixed assets, net 80,000 Intangible assets, net 4,400,000 Operating lease assets 1,206,000 Other assets 12,000 Total assets acquired 8,812,000 Liabilities Securities sold, not yet purchased at fair value 203,000 Accrued commissions and payroll payable 390,000 Accounts payable and accrued expenses 188,000 Operating lease liabilities 1,514,000 Deferred tax liability 1,196,000 Other 216,000 Total liabilities assumed 3,707,000 Net identifiable assets acquired $ 5,105,000 Goodwill 2,989,000 Total Purchase price $ 8,094,000 The intangible assets as of the closing date of the acquisition included: Amount Customer relationships 4,100,000 Brand name 300,000 $ 4,400,000 Initial purchase price $ 3,200,000 Additional consideration payable (net operating capital) 873,000 Earnout (contingent consideration) 4,021,000 Total purchase price $ 8,094,000 |
Business Acquisition, Pro Forma Information | The following table presents the unaudited pro forma combined results of operations of the Company and Winslow for the three and six months ended March 31, 2020 and 2019 as if the acquisition of Winslow had occurred on October 1, 2018. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the Company’s fiscal year 2019. Three Months Ended March 31, Six Months Ended March 31, 2020 2019 2020 2019 Net revenues $ 54,534,000 $ 49,258,000 $ 108,665,000 $ 110,085,000 Net Income (Loss) $ (2,460,000 ) $ (3,180,000 ) $ (3,887,000 ) $ (2,324,000 ) Net Income (Loss) attributable to common stockholders $ (1,763,000 ) $ (3,180,000 ) $ (3,284,000 ) $ (2,324,000 ) Net income (loss) attributable to common stockholders per common share: Basic $ (0.13 ) $ (0.25 ) $ (0.25 ) $ (0.18 ) Diluted $ (0.13 ) $ (0.25 ) $ (0.25 ) $ (0.18 ) |
Changes in the Carrying Value in Contingent Consideration | Set forth below are changes in the carrying value of the contingent consideration for the six months ended March 31, 2020 related to acquisitions: Fair value of contingent consideration at September 30, 2019 $ 1,620,000 Fair value of contingent consideration in connection with 2020 Tax & Accounting acquisitions 1,595,000 Fair value of contingent consideration in connection with Winslow acquisition 4,021,000 Payments (176,000 ) Change in fair value 49,000 Fair value of contingent consideration at March 31, 2020 $ 7,109,000 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | Intangibles consisted of the following at March 31, 2020 and September 30, 2019 : March 31, 2020 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 15,176,000 $ 5,143,000 $ 10,033,000 3-12 Brand name 1,010,000 133,000 877,000 3-5 Software license 45,000 34,000 11,000 3 Total $ 16,231,000 $ 5,310,000 $ 10,921,000 September 30, 2019 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 9,326,000 $ 4,614,000 $ 4,712,000 3-10 Brand name 710,000 — 710,000 Indefinite Software license 45,000 26,000 19,000 3 Total $ 10,081,000 $ 4,640,000 $ 5,441,000 |
Schedule of Finite-Lived Intangible Assets | Intangibles consisted of the following at March 31, 2020 and September 30, 2019 : March 31, 2020 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 15,176,000 $ 5,143,000 $ 10,033,000 3-12 Brand name 1,010,000 133,000 877,000 3-5 Software license 45,000 34,000 11,000 3 Total $ 16,231,000 $ 5,310,000 $ 10,921,000 September 30, 2019 Intangible asset Cost Accumulated Amortization Carrying Value Estimated Customer relationships $ 9,326,000 $ 4,614,000 $ 4,712,000 3-10 Brand name 710,000 — 710,000 Indefinite Software license 45,000 26,000 19,000 3 Total $ 10,081,000 $ 4,640,000 $ 5,441,000 |
Estimated Future Amortization Expense | The estimated future amortization expense of the finite lived intangible assets for the next five fiscal years and thereafter is as follows: Fiscal year ending Six months ending September 30, 2020 $ 1,128,000 2021 2,010,000 2022 1,835,000 2023 1,369,000 2024 1,050,000 Thereafter 3,529,000 Total $ 10,921,000 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses as of March 31, 2020 and September 30, 2019 consist of the following: March 31, September 30, Legal $ 803,000 $ 900,000 Audit 220,000 239,000 Telecommunications 116,000 125,000 Data services 409,000 296,000 Regulatory 399,000 292,000 Settlements 1,048,000 1,817,000 Deferred rent — 772,000 Other 4,378,000 4,202,000 Total $ 7,373,000 $ 8,643,000 |
PER SHARE DATA (Tables)
PER SHARE DATA (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Common Shares | A reconciliation of basic and diluted common shares used in the computation of per share data follows: Three Month Period Ended March 31, Six Month Period Ended March 31, 2020 2019 2020 2019 Basic weighted-average shares 13,364,498 12,714,002 13,266,291 12,628,606 Effect of dilutive securities: Unvested restricted stock units — — — — Diluted weighted-average shares 13,364,498 12,714,002 13,266,291 12,628,606 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Activity | Information with respect to stock option activity during the six months ended March 31, 2020 follows: Options Weighted Weighted Weighted Aggregate Outstanding at September 30, 2019 604,200 $ 6.19 $ 1.58 2.29 $ — Forfeited (3,500 ) $ 5.00 $ 2.30 $ — Outstanding at March 31, 2020 600,700 $ 6.20 $ 1.57 1.78 $ — Vested and exercisable at March 31, 2020 600,700 $ 6.20 $ 1.57 1.78 $ — |
Warrant Activity | The following table summarizes information about warrant activity during the six months ended March 31, 2020 : Warrants Weighted Weighted Average Remaining Contractual Term Outstanding at September 30, 2019 5,398,907 $ 3.25 2.30 Forfeited — $ — Outstanding and exercisable at March 31, 2020 5,398,907 $ 3.25 1.80 |
Nonvested Restricted Stock Activity | A summary of the Company's non-vested restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) for the six months ended March 31, 2020 is as follows: Shares Weighted Non-vested restricted stock units and awards at September 30, 2019 3,318,640 $ 10,006,000 Granted 741,216 1,938,000 Vested (419,159 ) (1,476,000 ) Forfeited (11,859 ) (38,000 ) Non-vested restricted stock units and awards at March 31, 2020 3,628,838 $ 10,430,000 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment information for the three and six months ended March 31, 2020 and 2019 is as follows: Brokerage and Tax and Corporate Total Three Months Ended March 31, 2020 Revenues $ 50,225,000 $ 4,308,000 $ 1,000 $ 54,534,000 Pre-tax income (loss) (2,926,000 ) 1,442,000 (1,429,000 ) (a) (2,913,000 ) Assets 64,517,000 5,341,000 24,498,000 (b) 94,356,000 Depreciation and amortization 422,000 194,000 196,000 812,000 Interest 24,000 — — 24,000 Capital expenditures (reimbursements) (95,000 ) 47,000 38,000 (10,000 ) 2019 Revenues $ 42,578,000 $ 4,122,000 $ — $ 46,700,000 Pre-tax income (loss) (3,458,000 ) 1,576,000 (2,011,000 ) (a) (3,893,000 ) Assets 49,823,000 7,032,000 13,047,000 (b) 69,902,000 Depreciation and amortization 205,000 133,000 123,000 461,000 Interest 10,000 — — 10,000 Capital expenditures 160,000 44,000 645,000 849,000 Brokerage and Tax and Corporate Total Six Months Ended March 31, 2020 Revenues $ 100,484,000 $ 5,239,000 $ 2,000 $ 105,725,000 Pre-tax income (loss) (2,470,000 ) 353,000 (3,020,000 ) (a) (5,137,000 ) Assets 64,517,000 5,341,000 24,498,000 (b) 94,356,000 Depreciation and amortization 675,000 325,000 342,000 1,342,000 Interest 38,000 — — 38,000 Capital expenditures (reimbursements) (73,000 ) 47,000 137,000 111,000 2019 Revenues $ 99,910,000 $ 4,897,000 $ — $ 104,807,000 Pre-tax income (loss) (251,000 ) 1,073,000 (3,392,000 ) (a) (2,570,000 ) Assets 49,823,000 7,032,000 13,047,000 (b) 69,902,000 Depreciation and amortization 398,000 204,000 256,000 858,000 Interest 18,000 — — 18,000 Capital expenditures 171,000 71,000 758,000 1,000,000 (a) Consists of professional fees, depreciation expense and other expenses not allocated to reportable segments by management. (b) Consists principally of deferred tax assets, cash, prepaid and fixed asset balances held at Corporate. |
REVENUES FROM CONTRACTS AND S_2
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following presents the Company’s revenues from contracts with customers disaggregated by major business activity and segment for the three and six months ended March 31, 2020 and 2019: For the Three Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 33,333,000 $ — $ — $ 33,333,000 Investment banking 7,557,000 — — 7,557,000 Investment advisory 9,273,000 — — 9,273,000 Tax preparation and accounting — 4,308,000 — 4,308,000 Sub-total revenue from contracts with customers 50,163,000 4,308,000 — 54,471,000 Other revenue 62,000 — 1,000 63,000 Total revenue $ 50,225,000 $ 4,308,000 $ 1,000 $ 54,534,000 For the Six Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 58,274,000 $ — $ — $ 58,274,000 Investment banking 22,785,000 — — 22,785,000 Investment advisory 16,662,000 — — 16,662,000 Tax preparation and accounting — 5,239,000 — 5,239,000 Sub-total revenue from contracts with customers 97,721,000 5,239,000 — 102,960,000 Other revenue 2,763,000 — 2,000 2,765,000 Total revenue $ 100,484,000 $ 5,239,000 $ 2,000 $ 105,725,000 For the Three Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 24,389,000 $ — $ — $ 24,389,000 Investment banking 9,797,000 — — 9,797,000 Investment advisory 5,514,000 — — 5,514,000 Tax preparation and accounting — 4,122,000 — 4,122,000 Sub-total revenue from contracts with customers 39,700,000 4,122,000 — 43,822,000 Other revenue 2,878,000 — — 2,878,000 Total revenue $ 42,578,000 $ 4,122,000 $ — $ 46,700,000 For the Six Months Ended Brokerage and Advisory Services Tax and Accounting Services Corporate Total Revenues from customer contracts: Commissions and transaction fees and clearing services $ 47,549,000 $ — $ — $ 47,549,000 Investment banking 36,868,000 — — 36,868,000 Investment advisory 11,372,000 — — 11,372,000 Tax preparation and accounting — 4,897,000 — 4,897,000 Sub-total revenue from contracts with customers 95,789,000 4,897,000 — 100,686,000 Other revenue 4,121,000 — — 4,121,000 Total revenue $ 99,910,000 $ 4,897,000 $ — $ 104,807,000 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | The table below presents additional information related to the Company’s leases as of March 31, 2020 : Six Month Period Ended March 31, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from finance leases $ 7,000 Operating cash flows from operating leases $ 1,767,000 Financing cash flows from finance leases $ 116,000 Weighted Average Remaining Lease Term: Operating Leases 7.30 years Weighted Average Discount Rate: Operating Leases 5.50 % The components of lease expense were as follows: Three Month Period Ended March 31, 2020 Six Month Period Ended March 31, 2020 Operating lease cost: $ 1,332,000 $ 2,434,000 Finance lease cost: Amortization of finance lease assets $ 20,000 $ 39,000 Interest on finance lease liabilities 3,000 7,000 Total finance lease cost $ 23,000 $ 46,000 Sublease income: $ 108,000 $ 108,000 |
Lessee, Operating Lease, Liability, Maturity | The table below summarizes the Company’s scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated statements of financial condition as of March 31, 2020 : Fiscal Year Ending September 30, Operating Leases Finance Lease Six months ending September 30, 2020 $ 2,181,000 $ 174,000 2021 4,118,000 — 2022 2,493,000 — 2023 2,333,000 — 2024 2,138,000 — Thereafter 7,471,000 — Total minimum lease payments 20,734,000 $ 174,000 Less: Amounts representing interest not yet incurred 4,076,000 3,000 Present value of lease obligations $ 16,658,000 $ 171,000 |
Finance Lease, Liability, Maturity | The table below summarizes the Company’s scheduled future minimum lease payments under operating and finance leases, recorded on the condensed consolidated statements of financial condition as of March 31, 2020 : Fiscal Year Ending September 30, Operating Leases Finance Lease Six months ending September 30, 2020 $ 2,181,000 $ 174,000 2021 4,118,000 — 2022 2,493,000 — 2023 2,333,000 — 2024 2,138,000 — Thereafter 7,471,000 — Total minimum lease payments 20,734,000 $ 174,000 Less: Amounts representing interest not yet incurred 4,076,000 3,000 Present value of lease obligations $ 16,658,000 $ 171,000 |
Assets And Liabilities, Lessee | The following table presents the balances for operating and finance right-of-use assets and lease liabilities: Leases Classification March 31, 2020 Assets Operating lease assets Operating lease assets $ 14,515,000 Finance lease assets Fixed assets 374,000 Total lease assets $ 14,889,000 Liabilities Operating lease liabilities Operating lease liabilities $ 16,658,000 Finance lease liabilities Other liabilities 171,000 Total lease liabilities $ 16,829,000 |
BASIS OF PRESENTATION - Additio
BASIS OF PRESENTATION - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | ||||
Net income (loss) attributable to noncontrolling interest | $ (697) | $ 0 | $ (603) | $ 0 |
Variable Interest Entities | ||||
Variable Interest Entity [Line Items] | ||||
Carried interest recognized | $ (895) |
RECEIVEABLES FROM BROKER-DEAL_3
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Brokers and Dealers [Abstract] | ||
Receivables from broker-dealers and clearing organizations | $ 4,638 | $ 3,490 |
RECEIVEABLES FROM BROKER-DEAL_4
RECEIVEABLES FROM BROKER-DEALERS AND CLEARING ORGANIZATIONS AND OTHER RECEIVABLES - Schedule of Other Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Brokers and Dealers [Abstract] | ||
Trailing fees | $ 553 | $ 947 |
Accounts receivable for tax and accounting services | 1,298 | 686 |
Allowance for doubtful accounts - tax and accounting services | (307) | (282) |
Advances to registered representatives | 1,866 | 1,383 |
Investment banking receivable | 1,414 | 411 |
Advisory fees | 527 | 483 |
Notes receivable | 1,245 | 665 |
Other | 2,165 | 1,379 |
Total other receivables, net | $ 8,761 | $ 5,672 |
FORGIVABLE LOANS RECEIVABLE - N
FORGIVABLE LOANS RECEIVABLE - Narrative (Details) - USD ($) | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Forgiveness of loans balance | $ 387,000 | $ 333,000 | |
Loans Receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts receivable | $ 0 | $ 0 | |
Maximum | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest rate (as a percent) | 4.00% |
FORGIVABLE LOANS RECEIVABLE - F
FORGIVABLE LOANS RECEIVABLE - Forgivable Loan Activity (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Forgivable Loan Activity [Roll Forward] | |
Beginning balance | $ 1,834 |
Additions | 2,803 |
Acquired through the Winslow acquisition (see Note 7) | 91 |
Amortization | (387) |
Reclassification to other receivables | (254) |
Ending balance | $ 4,087 |
FAIR VALUE OF ASSETS AND LIAB_3
FAIR VALUE OF ASSETS AND LIABILITIES - Carrying Values and Estimated Fair Values of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Carrying Value | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | $ 4,638 | $ 3,490 |
Forgivable loans receivable | 4,087 | 1,834 |
Other receivables, net | 8,761 | 5,672 |
Total assets, excluding financial instruments | 36,986 | 41,875 |
Liabilities | ||
Accrued commissions and payroll payable | 12,773 | 18,590 |
Accounts payable and accrued expenses | 7,373 | 8,643 |
Total liabilities, excluding financial instruments | 20,146 | 27,233 |
Total Estimated Fair Value | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 4,638 | 3,490 |
Forgivable loans receivable | 4,087 | 1,834 |
Other receivables, net | 8,761 | 5,672 |
Total assets, excluding financial instruments | 36,986 | 41,875 |
Liabilities | ||
Accrued commissions and payroll payable | 12,773 | 18,590 |
Accounts payable and accrued expenses | 7,373 | 8,643 |
Total liabilities, excluding financial instruments | 20,146 | 27,233 |
Total Estimated Fair Value | Level 1 | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 0 | 0 |
Forgivable loans receivable | 0 | 0 |
Other receivables, net | 0 | 0 |
Total assets, excluding financial instruments | 19,500 | 30,879 |
Liabilities | ||
Accrued commissions and payroll payable | 0 | 0 |
Accounts payable and accrued expenses | 0 | 0 |
Total liabilities, excluding financial instruments | 0 | 0 |
Total Estimated Fair Value | Level 2 | ||
Assets | ||
Receivables from broker-dealers and clearing organizations | 4,638 | 3,490 |
Forgivable loans receivable | 4,087 | 1,834 |
Other receivables, net | 8,761 | 5,672 |
Total assets, excluding financial instruments | 17,486 | 10,996 |
Liabilities | ||
Accrued commissions and payroll payable | 12,773 | 18,590 |
Accounts payable and accrued expenses | 7,373 | 8,643 |
Total liabilities, excluding financial instruments | 20,146 | 27,233 |
Cash | Carrying Value | ||
Assets | ||
Cash and cash equivalents | 18,847 | 30,443 |
Cash | Total Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 18,847 | 30,443 |
Cash | Total Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 18,847 | 30,443 |
Cash | Total Estimated Fair Value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Cash deposits with clearing organizations | Carrying Value | ||
Assets | ||
Cash and cash equivalents | 653 | 436 |
Cash deposits with clearing organizations | Total Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 653 | 436 |
Cash deposits with clearing organizations | Total Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 653 | 436 |
Cash deposits with clearing organizations | Total Estimated Fair Value | Level 2 | ||
Assets | ||
Cash and cash equivalents | $ 0 | $ 0 |
FAIR VALUE OF ASSETS AND LIAB_4
FAIR VALUE OF ASSETS AND LIABILITIES - Fair Value Hierarchy of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 2,065 | $ 6,302 |
Liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,352 | 2,254 |
Liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,166 | 3,925 |
Liabilities | 7,109 | 1,620 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 7,583 | 12,481 |
Liabilities | 7,109 | 1,620 |
Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 7,583 | 12,481 |
Liabilities | 7,109 | 1,620 |
Contingent consideration | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Contingent consideration | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Contingent consideration | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 7,109 | 1,620 |
Contingent consideration | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 7,109 | 1,620 |
Contingent consideration | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 7,109 | 1,620 |
Corporate stocks | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,836 | 6,282 |
Corporate stocks | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Corporate stocks | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Corporate stocks | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,836 | 6,282 |
Corporate stocks | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,836 | 6,282 |
Municipal bonds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 229 | 20 |
Municipal bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Municipal bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Municipal bonds | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 229 | 20 |
Municipal bonds | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 229 | 20 |
Restricted stock | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Restricted stock | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 731 | 725 |
Restricted stock | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Restricted stock | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 731 | 725 |
Restricted stock | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 731 | 725 |
Corporate bonds | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 101 | |
Corporate bonds | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | |
Corporate bonds | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 101 | |
Corporate bonds | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 101 | |
Warrants | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 0 | 0 |
Warrants | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 520 | 1,529 |
Warrants | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,166 | 3,925 |
Warrants | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 4,686 | 5,454 |
Warrants | Total Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $ 4,686 | $ 5,454 |
FAIR VALUE OF ASSETS AND LIAB_5
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Assets Measured on Recurring Basis, Unobservable Inputs (Details) - Warrants $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning Balance as of September 30, 2019 | $ 3,925 |
Net realized Gain or (losses) | 0 |
Net Change in Unrealized Appreciation (Depreciation) | 99 |
Purchases | 0 |
Sales | 0 |
Transfer Into Level 3 | 142 |
Transfer Out of Level 3 | 0 |
Ending Balance as of March 31, 2020 | $ 4,166 |
FAIR VALUE OF ASSETS AND LIAB_6
FAIR VALUE OF ASSETS AND LIABILITIES - Schedule of Fair Value Inputs and Valuation Techniques (Details) $ in Thousands | 6 Months Ended | ||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Unrealized loss for the change in fair value | $ 971 | $ 723 | |
Minimum | Valuation, Market Approach | Measurement Input, Discount for Lack of Marketability | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement inputs of warrants | 0.22 | ||
Minimum | Valuation, Market Approach | Measurement Input, Price Volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement inputs of warrants | 0.57 | ||
Maximum | Valuation, Market Approach | Measurement Input, Discount for Lack of Marketability | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement inputs of warrants | 0.44 | ||
Maximum | Valuation, Market Approach | Measurement Input, Price Volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement inputs of warrants | 1.17 | ||
Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of warrants | $ 4,166 | $ 3,925 |
FIXED ASSETS - Fixed Assets (De
FIXED ASSETS - Fixed Assets (Details) - USD ($) | 6 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 7,356,000 | $ 7,165,000 |
Less accumulated depreciation and amortization | (2,593,000) | (2,098,000) |
Fixed assets, net | 4,763,000 | 5,067,000 |
Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 1,974,000 | 1,835,000 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 840,000 | 761,000 |
Estimated useful lives | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 3,635,000 | 3,662,000 |
Finance leases (primarily composed of computer equipment) | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 907,000 | $ 907,000 |
Minimum | Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Minimum | Finance leases (primarily composed of computer equipment) | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 3 years | |
Maximum | Equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 7 years | |
Maximum | Finance leases (primarily composed of computer equipment) | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 7 years |
FIXED ASSETS - Narrative (Detai
FIXED ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 252 | $ 172 | $ 495 | $ 341 |
BUSINESS COMBINATION, CONTING_3
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH - Narrative (Details) | Dec. 31, 2019USD ($)Installment | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($)businessInstallment | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Number of businesses acquired | business | 2 | |||||
Payments to acquire business | $ 2,021,000 | $ 387,000 | ||||
Contingent consideration liability | 7,109,000 | $ 1,620,000 | ||||
Disposal group, notes and loans receivable, net | $ 636,000 | |||||
Disposal group, goodwill | 239,000 | |||||
Disposal group, intangible assets | 100,000 | |||||
Disposal group, not discontinued operation, gain (loss) on disposal | $ 297,000 | |||||
Long-term debt, term | 120 months | |||||
Disposal group, notes and loans receivable, interest rate | 3.00% | |||||
Certain Assets of a Tax Preparation and Accounting Business | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ 432,000 | |||||
Contingent consideration liability | $ 1,595,000 | 1,595,000 | ||||
Winslow Targets | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration liability | 4,021,000 | $ 4,021,000 | ||||
Consideration transferred | $ 3,200,000 | |||||
Annual installments | Installment | 3 | 3 | ||||
Contingent consideration, maximum, net working capital | $ 1,000,000 | $ 1,000,000 | ||||
Contingent consideration, minimum, pre-tax net income | 1,500,000 | 1,500,000 | ||||
Contingent consideration, maximum, pre-tax net income | 3,000,000 | 3,000,000 | ||||
Escrow deposit | $ 500,000 | 500,000 | $ 500,000 | $ 0 | ||
Customer relationships | Certain Assets of a Tax Preparation and Accounting Business | ||||||
Business Acquisition [Line Items] | ||||||
Assets acquired | $ 2,027,000 | |||||
Estimated useful life | 7 years | |||||
Customer relationships | Winslow Targets | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 12 years | |||||
Brand name | Winslow Targets | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years |
BUSINESS COMBINATION, CONTING_4
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||||
Cash deposits with clearing organizations | $ 653 | $ 436 | ||
Securities owned, at fair value | 7,583 | 12,481 | ||
Receivables from broker-dealers and clearing organizations | 4,638 | 3,490 | ||
Forgivable loans receivable | 4,087 | 1,834 | ||
Other receivables, net | 8,761 | 5,672 | ||
Operating lease assets | 14,515 | |||
Other assets | 1,599 | 2,031 | ||
Accrued commissions and payroll payable | 12,773 | 18,590 | ||
Accounts payable and accrued expenses | 7,373 | 8,643 | ||
Operating lease liabilities | 16,658 | |||
Other | 1,366 | 388 | ||
Goodwill | 7,903 | 5,153 | ||
Contingent consideration | 7,109 | $ 1,620 | ||
Winslow Targets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cash | $ 1,111 | |||
Cash deposits with clearing organizations | 207 | |||
Securities owned, at fair value | 1,111 | |||
Receivables from broker-dealers and clearing organizations | 49 | |||
Forgivable loans receivable | 91 | |||
Other receivables, net | 113 | |||
Prepaid expenses | 432 | |||
Fixed assets, net | 80 | |||
Intangible assets, net | 4,400 | |||
Operating lease assets | 1,206 | |||
Other assets | 12 | |||
Total assets acquired | 8,812 | |||
Securities sold, but not yet purchased, at fair value | 203 | |||
Accrued commissions and payroll payable | 390 | |||
Accounts payable and accrued expenses | 188 | |||
Operating lease liabilities | 1,514 | |||
Deferred tax liability | 1,196 | |||
Other | 216 | |||
Total liabilities assumed | 3,707 | |||
Net identifiable assets acquired | 5,105 | |||
Goodwill | 2,989 | |||
Total Purchase price | 8,094 | |||
Initial purchase price | 3,200 | |||
Additional consideration payable (net operating capital) | 873 | $ 873 | $ 0 | |
Contingent consideration | 4,021 | |||
Winslow Targets | Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | 4,100 | |||
Winslow Targets | Brand name | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | $ 300 |
BUSINESS COMBINATION, CONTING_5
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH - Pro Forma Financial Information (Details) - Winslow Targets - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Net revenues | $ 54,534,000 | $ 49,258,000 | $ 108,665,000 | $ 110,085,000 |
Net income (loss) | (2,460,000) | (3,180,000) | (3,887,000) | (2,324,000) |
Net Income (Loss) attributable to common stockholders | $ (1,763,000) | $ (3,180,000) | $ (3,284,000) | $ (2,324,000) |
Net income (loss) per share attributable to National Holdings Corporation common shareholders - Basic (in dollars per share) | $ (0.13) | $ (0.25) | $ (0.25) | $ (0.18) |
Net income (loss) per share attributable to National Holdings Corporation common shareholders - Diluted (in dollars per share) | $ (0.13) | $ (0.25) | $ (0.25) | $ (0.18) |
BUSINESS COMBINATION, CONTING_6
BUSINESS COMBINATION, CONTINGENT CONSIDERATION AND DISPOSAL OF BRANCH - Changes in the Carrying Value in Contingent Consideration (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($) | |
Contingent Consideration [Roll Forward] | |
Fair value of contingent consideration, beginning balance | $ 1,620 |
Fair value of contingent consideration in connection with acquisitions | 1,595 |
Payments | (176) |
Change in fair value | 49 |
Fair value of contingent consideration, ending balance | 7,109 |
Winslow Targets | |
Contingent Consideration [Roll Forward] | |
Fair value of contingent consideration in connection with acquisitions | $ 4,021 |
INTANGIBLE ASSETS - Intangibles
INTANGIBLE ASSETS - Intangibles (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 5,310,000 | $ 4,640,000 |
Cost, total | 16,231,000 | 10,081,000 |
Carrying value, total | 10,921,000 | 5,441,000 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 15,176,000 | 9,326,000 |
Accumulated Amortization | 5,143,000 | 4,614,000 |
Carrying Value | $ 10,033,000 | $ 4,712,000 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | 3 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 12 years | 10 years |
Software license | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 45,000 | $ 45,000 |
Accumulated Amortization | 34,000 | 26,000 |
Carrying Value | $ 11,000 | $ 19,000 |
Estimated Useful Life (years) | 3 years | 3 years |
Brand name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 1,010,000 | |
Accumulated Amortization | 133,000 | |
Carrying Value | $ 877,000 | |
Indefinite-lived intangible assets | $ 710,000 | |
Brand name | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Brand name | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 5 years |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 560 | $ 289 | $ 847 | $ 517 |
INTANGIBLE ASSETS - Estimated F
INTANGIBLE ASSETS - Estimated Future Amortization Expense (Details) - Gilman $ in Thousands | Mar. 31, 2020USD ($) |
Fiscal year ending September 30, | |
Six months ending September 30, 2020 | $ 1,128 |
2021 | 2,010 |
2022 | 1,835 |
2023 | 1,369 |
2024 | 1,050 |
Thereafter | 3,529 |
Carrying Value | $ 10,921 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Schedule of Accounts Payable and Other Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Payables and Accruals [Abstract] | ||
Legal | $ 803 | $ 900 |
Audit | 220 | 239 |
Telecommunications | 116 | 125 |
Data services | 409 | 296 |
Regulatory | 399 | 292 |
Settlements | 1,048 | 1,817 |
Deferred rent | 0 | 772 |
Other | 4,378 | 4,202 |
Total | $ 7,373 | $ 8,643 |
ACCOUNTS PAYABLE AND ACCRUED _4
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Sep. 30, 2019 |
Payables and Accruals [Abstract] | ||
Restitution payment accrual related to trailing fees | $ 177 | $ 319 |
Soft dollar accruals | 1,635 | 1,188 |
Sales and use tax accrual | 430 | |
Accrued professional fees | 80 | 119 |
Financial obligation | $ 49 | 595 |
Accrued fixed assets payable | 380 | |
Accrued rent | 396 | |
Accrued clearing fees | $ 228 |
PER SHARE DATA - Reconciliation
PER SHARE DATA - Reconciliation of Basic and Diluted Common Shares (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average shares (in shares) | 13,364,498 | 12,714,002 | 13,266,291 | 12,628,606 |
Unvested restricted stock units (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted-average shares (in shares) | 13,364,498 | 12,714,002 | 13,266,291 | 12,628,606 |
PER SHARE DATA - Potential Comm
PER SHARE DATA - Potential Common Share Equivalents Excluded from Diluted Computation (Details) - shares | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities (in shares) | 9,628,445 | 6,258,439 |
NEW ACCOUNTING GUIDANCE Narrati
NEW ACCOUNTING GUIDANCE Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Oct. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 14,515 | |
Operating lease liabilities | $ 16,658 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease assets | $ 14,720 | |
Operating lease liabilities | $ 16,309 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)Letter_of_credit | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | |
Loss Contingencies [Line Items] | |||||
Settlements and potential losses | $ (115,000) | $ 1,960,000 | $ 274,000 | $ 2,483,000 | |
Number of letters of credit, outstanding | Letter_of_credit | 1 | ||||
Pending Litigation | Professional Fees | |||||
Loss Contingencies [Line Items] | |||||
Legal fees | 465,000 | $ 417,000 | $ 906,000 | $ 888,000 | |
Pending Litigation | Accounts Payable and Other Liabilities | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | 1,048,000 | 1,048,000 | $ 1,817,000 | ||
Letter of Credit | |||||
Loss Contingencies [Line Items] | |||||
Maximum borrowing capacity | $ 962,000 | $ 962,000 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details) | Mar. 31, 2020USD ($) |
National Securities | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Net capital | $ 2,100,158 |
Alternative excess net capital | 1,100,158 |
National Securities | SEC Requirement | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum net capital required | 1,000,000 |
WEC | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Net capital | 1,086,934 |
Alternative excess net capital | 986,934 |
WEC | SEC Requirement | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |
Minimum net capital required | $ 100,000 |
STOCKHOLDERS' EQUITY - Stock Op
STOCKHOLDERS' EQUITY - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | |
Options | ||
Beginning balance (in shares) | 604,200 | |
Forfeited (in shares) | (3,500) | |
Ending balance (in shares) | 600,700 | 604,200 |
Vested and exercisable balance (in shares) | 600,700 | |
Weighted Average Exercise Price Per Share | ||
Beginning balance (in dollars per share) | $ 6.19 | |
Forfeited (in dollars per share) | 5 | |
Ending balance (in dollars per share) | 6.20 | $ 6.19 |
Vested and exercisable balance (in dollars per share) | 6.20 | |
Weighted Average Grant Date Fair Value Per Share | ||
Beginning balance (in dollars per share) | 1.58 | |
Forfeited (in dollars per share) | 2.30 | |
Ending balance (in dollars per share) | 1.57 | $ 1.58 |
Vested and exercisable balance (in dollars per share) | $ 1.57 | |
Weighted Average Remaining Contractual term (years) | ||
Balance outstanding | 1 year 9 months 10 days | 2 years 3 months 15 days |
Vested and exercisable balance | 1 year 9 months 10 days | |
Aggregate Intrinsic Value | ||
Balance outstanding | $ 0 | $ 0 |
Forfeited | 0 | |
Vested and exercisable balance | $ 0 |
STOCKHOLDERS' EQUITY - Warrant
STOCKHOLDERS' EQUITY - Warrant Activity (Details) - Warrants - $ / shares | 6 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | |
Warrants | ||
Beginning balance (in shares) | 5,398,907.33333333 | |
Forfeited (in shares) | 0 | |
Ending balance (in shares) | 5,398,907 | 5,398,907.33333333 |
Weighted Average Exercise Price Per Share | ||
Beginning balance (in dollars per share) | $ 3.25 | |
Forfeited (in dollars per share) | 0 | |
Ending balance (in dollars per share) | $ 3.25 | $ 3.25 |
Weighted Average Remaining Contractual Term | ||
Balance outstanding | 1 year 9 months 18 days | 2 years 3 months 18 days |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) $ in Thousands | 6 Months Ended |
Mar. 31, 2020USD ($)shares | |
Shares | |
Beginning balance (in shares) | shares | 3,318,640 |
Granted (in shares) | shares | 741,216 |
Vested (in shares) | shares | (419,159) |
Forfeited (in shares) | shares | (11,859) |
Ending balance (in shares) | shares | 3,628,838 |
Weighted Average Grant Date Fair Value | |
Beginning balance | $ | $ 10,006 |
Granted | $ | 1,938 |
Vested | $ | (1,476) |
Forfeited | $ | (38) |
Ending balance | $ | $ 10,430 |
STOCKHOLDERS' EQUITY - Narrativ
STOCKHOLDERS' EQUITY - Narrative (Details) - Restricted Stock Units (RSUs) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2020USD ($)shares | Mar. 31, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | shares | 741,216 | |||||
Fair value of awards issued | $ 1,476 | |||||
Award conversion rate | 1 | |||||
Stock based compensation expense | $ 538 | $ 1,480 | $ 1,445 | $ 2,802 | ||
Unrecognized share base-compensation expense | $ 5,624 | $ 5,624 | ||||
Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | shares | 39,216 | 702,000 | ||||
Fair value of awards issued | $ 99 | $ 1,839 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 6 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT INFORMATION - Segment I
SEGMENT INFORMATION - Segment Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | |||||
Revenues | $ 54,534,000 | $ 46,700,000 | $ 105,725,000 | $ 104,807,000 | |
Pre-tax income (loss) | (2,913,000) | (3,893,000) | (5,137,000) | (2,570,000) | |
Assets | 94,356,000 | 69,902,000 | 94,356,000 | 69,902,000 | $ 81,207,000 |
Depreciation and amortization | 812,000 | 461,000 | 1,342,000 | 858,000 | |
Interest | 24,000 | 10,000 | 38,000 | 18,000 | |
Capital expenditures (reimbursements) | (10,000) | 849,000 | 111,000 | 1,000,000 | |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 1,000 | 0 | 2,000 | 0 | |
Pre-tax income (loss) | (1,429,000) | (2,011,000) | (3,020,000) | (3,392,000) | |
Assets | 24,498,000 | 13,047,000 | 24,498,000 | 13,047,000 | |
Depreciation and amortization | 196,000 | 123,000 | 342,000 | 256,000 | |
Interest | 0 | 0 | 0 | 0 | |
Capital expenditures (reimbursements) | 38,000 | 645,000 | 137,000 | 758,000 | |
Brokerage and Advisory Services | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 50,225,000 | 42,578,000 | 100,484,000 | 99,910,000 | |
Pre-tax income (loss) | (2,926,000) | (3,458,000) | (2,470,000) | (251,000) | |
Assets | 64,517,000 | 49,823,000 | 64,517,000 | 49,823,000 | |
Depreciation and amortization | 422,000 | 205,000 | 675,000 | 398,000 | |
Interest | 24,000 | 10,000 | 38,000 | 18,000 | |
Capital expenditures (reimbursements) | (95,000) | 160,000 | (73,000) | 171,000 | |
Tax and Accounting Services | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Revenues | 4,308,000 | 4,122,000 | 5,239,000 | 4,897,000 | |
Pre-tax income (loss) | 1,442,000 | 1,576,000 | 353,000 | 1,073,000 | |
Assets | 5,341,000 | 7,032,000 | 5,341,000 | 7,032,000 | |
Depreciation and amortization | 194,000 | 133,000 | 325,000 | 204,000 | |
Interest | 0 | 0 | 0 | 0 | |
Capital expenditures (reimbursements) | $ 47,000 | $ 44,000 | $ 47,000 | $ 71,000 |
ACQUISITION OF CONTROLLING IN_2
ACQUISITION OF CONTROLLING INTEREST IN THE COMPANY - Narrative (Details) - FBIO Acquisitions Inc. - $ / shares | Feb. 11, 2019 | Nov. 14, 2018 |
B. Riley Financial, Inc. | ||
Business Acquisition [Line Items] | ||
Share price for acquisition (in dollars per share) | $ 3.25 | |
B. Riley Financial, Inc. | Common Stock | ||
Business Acquisition [Line Items] | ||
Number of shares tendered (in shares) | 7,037,482 | |
Percentage of voting interests acquired (as a percent) | 56.10% | |
Share price for acquisition (in dollars per share) | $ 3.25 | |
Voting rights threshold for two board observers | 24.00% | |
Voting rights threshold for one board observer | 5.00% | |
B. Riley Financial, Inc. | Common Stock | Immediate Purchase | ||
Business Acquisition [Line Items] | ||
Number of shares tendered (in shares) | 3,010,054 | |
B. Riley Financial, Inc. | Common Stock | Purchase After Period Of Time From FINRA Approval | ||
Business Acquisition [Line Items] | ||
Number of shares tendered (in shares) | 3,149,496 | |
Third Parties | Common Stock | Purchase After Period Of Time From FINRA Approval | ||
Business Acquisition [Line Items] | ||
Number of shares tendered (in shares) | 877,932 |
VARIABLE INTEREST ENTITIES - Na
VARIABLE INTEREST ENTITIES - Narrative (Details) - Variable Interest Entities - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | ||||
Distribution threshold | 100.00% | |||
Investment banking and advisory fee revenue | $ 852 | $ 6,111 | $ 9,260 | $ 25,090 |
Minimum | ||||
Variable Interest Entity [Line Items] | ||||
Timing of liquidity event | 1 year | |||
Cash fee received | 7.00% | |||
Carried interest | 8.00% | |||
Maximum | ||||
Variable Interest Entity [Line Items] | ||||
Timing of liquidity event | 5 years | |||
Cash fee received | 10.00% | |||
Carried interest | 15.00% |
REVENUES FROM CONTRACTS AND S_3
REVENUES FROM CONTRACTS AND SIGNIFICANT CUSTOMERS - Disaggregation of Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 54,471,000 | $ 43,822,000 | $ 102,960,000 | $ 100,686,000 |
Other revenue | 63,000 | 2,878,000 | 2,765,000 | 4,121,000 |
Total Revenues | 54,534,000 | 46,700,000 | 105,725,000 | 104,807,000 |
Commissions and transaction fees and clearing services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 33,333,000 | 24,389,000 | 58,274,000 | 47,549,000 |
Investment banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 7,557,000 | 9,797,000 | 22,785,000 | 36,868,000 |
Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 9,273,000 | 5,514,000 | 16,662,000 | 11,372,000 |
Tax preparation and accounting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 4,308,000 | 4,122,000 | 5,239,000 | 4,897,000 |
Corporate | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Other revenue | 1,000 | 0 | 2,000 | 0 |
Total Revenues | 1,000 | 0 | 2,000 | 0 |
Corporate | Commissions and transaction fees and clearing services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Corporate | Investment banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Corporate | Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Corporate | Tax preparation and accounting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Brokerage and Advisory Services | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 50,163,000 | 39,700,000 | 97,721,000 | 95,789,000 |
Other revenue | 62,000 | 2,878,000 | 2,763,000 | 4,121,000 |
Total Revenues | 50,225,000 | 42,578,000 | 100,484,000 | 99,910,000 |
Brokerage and Advisory Services | Operating Segments | Commissions and transaction fees and clearing services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 33,333,000 | 24,389,000 | 58,274,000 | 47,549,000 |
Brokerage and Advisory Services | Operating Segments | Investment banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 7,557,000 | 9,797,000 | 22,785,000 | 36,868,000 |
Brokerage and Advisory Services | Operating Segments | Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 9,273,000 | 5,514,000 | 16,662,000 | 11,372,000 |
Brokerage and Advisory Services | Operating Segments | Tax preparation and accounting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Tax and Accounting Services | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 4,308,000 | 4,122,000 | 5,239,000 | 4,897,000 |
Other revenue | 0 | 0 | 0 | 0 |
Total Revenues | 4,308,000 | 4,122,000 | 5,239,000 | 4,897,000 |
Tax and Accounting Services | Operating Segments | Commissions and transaction fees and clearing services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Tax and Accounting Services | Operating Segments | Investment banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Tax and Accounting Services | Operating Segments | Investment advisory | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | 0 | 0 | 0 | 0 |
Tax and Accounting Services | Operating Segments | Tax preparation and accounting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contracts with customers | $ 4,308,000 | $ 4,122,000 | $ 5,239,000 | $ 4,897,000 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Oct. 31, 2018 | |
Leases [Abstract] | |||
Term of contract | 24 months | ||
Amortization period | 7 years | ||
Interest rate on lease obligation | 5.60% | ||
Operating lease cost | $ 1,332 | $ 2,434 | |
Finance lease cost: | |||
Amortization of finance lease assets | 20 | 39 | |
Interest on finance lease liabilities | 3 | 7 | |
Total finance lease cost | 23 | 46 | |
Sublease income | 108 | 108 | |
Operating cash flows from finance leases | 7 | ||
Operating cash flows from operating leases | 1,767 | ||
Financing cash flows from finance leases | $ 116 | $ 116 | |
Weighted average remaining lease term | 7 years 3 months 18 days | 7 years 3 months 18 days | |
Weighted average discount rate, operating leases | 5.50% | 5.50% |
LEASES - Schedule of Future Min
LEASES - Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Operating Leases | |
Nine months ending September 30, 2020 | $ 2,181 |
2021 | 4,118 |
2022 | 2,493 |
2023 | 2,333 |
2024 | 2,138 |
Thereafter | 7,471 |
Total minimum lease payments | 20,734 |
Less: Amounts representing interest not yet incurred | 4,076 |
Operating lease liabilities | 16,658 |
Finance Lease | |
Nine months ending September 30, 2020 | 174 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total minimum lease payments | 174 |
Less: Amounts representing interest not yet incurred | 3 |
Finance lease liabilities | $ 171 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Assets | |
Operating lease assets | $ 14,515 |
Finance lease assets | 374 |
Total lease assets | 14,889 |
Liabilities | |
Operating lease liabilities | 16,658 |
Finance lease liabilities | 171 |
Total lease liabilities | $ 16,829 |
SUBSEQUENT EVENT - (Details)
SUBSEQUENT EVENT - (Details) - Subsequent Event - USD ($) | Apr. 15, 2020 | Apr. 10, 2020 |
Paycheck Protection Program | ||
Subsequent Event [Line Items] | ||
Debt instrument, face amount | $ 5,523,738 | |
WEC Note | ||
Subsequent Event [Line Items] | ||
Debt instrument, face amount | $ 973,062 |
Uncategorized Items - nhld-2020
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (135,000) |
Noncontrolling Interest [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 86,510,000 |
Common Stock [Member] | ||
Shares, Issued | us-gaap_SharesIssued | 12,541,890 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 250,000 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | (39,960,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (135,000) |