| Discontinued Operations |
3. Discontinued Operations
As of December 31, 2018, the Company recorded its investment in National at fair value of $13.1 million or $3.25 per share. This holding is reported on the Company’s Consolidated Balance Sheets as current assets held for sale on December 31, 2018. Pursuant to the terms of the NHC agreement the Company also recorded a net gain of $2.3 million related to the transactions which is included in discontinued operations in the consolidated statement of operations for the twelve months ended December 31, 2018.
The following is a summary of revenue and expenses of National for the year ended December 31, 2018:
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For the Year Ended December 31,
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($ in thousands)
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2018
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Revenue
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$
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210,980
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|
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Operating expenses
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Commissions, compensation and fees
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182,127
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Clearing fees
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2,400
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Communications
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3,260
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Occupancy
|
|
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3,755
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Licenses and registration
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2,735
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Professional fees
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4,306
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Interest
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|
97
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Depreciation and amortization
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1,551
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Other administrative expenses
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8,165
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Total operating expenses
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208,396
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Gain from operations
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2,584
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Other income (expense)
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Change in fair value of warrants
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(13,018)
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Other income
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|
153
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Total other (expense) income
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(12,865)
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Loss from discontinued operations before income taxes
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|
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(10,281)
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Income tax expense
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3,188
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Loss from discontinued operations
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(13,469)
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Gain from disposal of National
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2,333
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Total loss from discontinued operations, net of tax
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$
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(11,136)
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In connection with this sale, the Company classified the assets and liabilities related to NHLD, included on its consolidated balance sheet as of December 31, 2018, as held for sale as presented in the table below:
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December 31,
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($ in thousands)
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2018
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ASSETS
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Current assets
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Current assets held for sale
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$
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13,089
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Total current assets held for sale
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13,089
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Total assets held for sale
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$
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13,089
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The table below depicts the cash flows from the transaction for the year ended December 31, 2018:
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For the Year Ended December 31,
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($ in thousands)
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2018
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Operating activities
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Effect of elimination entry with discontinued operations presentation
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$
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(1,785)
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Total cash used in discontinued operating activities
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$
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(1,785)
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Investing activities
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Proceeds from sale of National
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$
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9,783
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Total cash provided by discontinued investing activities
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$
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9,783
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