Florida
|
65-0701248
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
incorporation or organization)
|
Identification Number)
|
|
|
4400 Biscayne Boulevard, 12th Floor
|
|
Miami, Florida
|
33137
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
[ ]
|
|
|
Accelerated filer
|
[x]
|
|
|
|
|
|
|
|
|
Non-accelerated filer
|
[ ]
|
|
|
Smaller reporting company
|
[ ]
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
[ ]
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, par value $.0001 per share
|
LTS
|
NYSE American
|
8.00% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share
|
LTS PrA
|
NYSE American
|
6.50% Senior Notes due 2027
|
LTSL
|
NYSE American
|
7% Senior Notes due 2028
|
LTSF
|
NYSE American
|
7.25% Senior Notes due 2028
|
LTSK
|
NYSE American
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
|
|
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|
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||
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||
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PART II. OTHER INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019
(Unaudited) |
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
|
|
|
|
||||
Cash and cash equivalents
|
$
|
167,847
|
|
|
$
|
182,693
|
|
Securities owned, at fair value
|
7,967
|
|
|
10,923
|
|
||
Receivables from clearing brokers
|
42,059
|
|
|
24,068
|
|
||
Receivables from other broker-dealers
|
4,143
|
|
|
7,078
|
|
||
Notes receivable from financial advisors, net
|
5,343
|
|
|
5,809
|
|
||
Other receivables, net
|
136,144
|
|
|
133,242
|
|
||
Fixed assets, net
|
30,815
|
|
|
29,994
|
|
||
Right-of-use assets
|
34,715
|
|
|
—
|
|
||
Restricted cash
|
770
|
|
|
6,588
|
|
||
Intangible assets, net
|
69,442
|
|
|
73,064
|
|
||
Goodwill
|
126,079
|
|
|
126,079
|
|
||
Contract acquisition costs, net
|
83,784
|
|
|
80,726
|
|
||
Cash surrender value of life insurance
|
13,059
|
|
|
11,406
|
|
||
Income taxes receivable
|
473
|
|
|
2,156
|
|
||
Other assets
|
38,643
|
|
|
47,078
|
|
||
Total assets
|
$
|
761,283
|
|
|
$
|
740,904
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
|
|
|
|
||||
LIABILITIES:
|
|
|
|
||||
Securities sold, but not yet purchased, at fair value
|
$
|
5,097
|
|
|
$
|
2,575
|
|
Accrued compensation
|
18,743
|
|
|
39,264
|
|
||
Commissions and fees payable
|
105,121
|
|
|
105,306
|
|
||
Accounts payable and accrued liabilities
|
42,166
|
|
|
48,741
|
|
||
Deferred rent
|
—
|
|
|
2,956
|
|
||
Lease liabilities
|
37,713
|
|
|
—
|
|
||
Deferred income taxes
|
13,763
|
|
|
14,068
|
|
||
Deferred compensation liability
|
21,914
|
|
|
20,622
|
|
||
Accrued interest
|
1,507
|
|
|
123
|
|
||
Notes payable, net of unamortized discount of $6,209 and $6,372 in 2019 and 2018, respectively and net of debt issuance costs of $6,801 and $7,086 in 2019 and 2018, respectively.
|
261,237
|
|
|
254,072
|
|
||
Total liabilities
|
507,261
|
|
|
487,727
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Preferred stock, $.0001 par value; authorized 50,000,000 shares: 8% Series A cumulative redeemable preferred stock; designated 23,844,916 shares in 2019 and 2018; shares issued and outstanding 17,299,305 in 2019 and 17,012,075 in 2018 (liquidation preference $432,483 and $425,302 in 2019 and 2018, respectively)
|
2
|
|
|
2
|
|
||
Common stock, $.0001 par value; authorized 1,000,000,000 shares in 2019 and 2018; shares issued and outstanding, 148,746,413 in 2019
and 146,535,796 in 2018
|
15
|
|
|
14
|
|
||
Additional paid-in capital
|
341,768
|
|
|
344,356
|
|
||
Accumulated deficit
|
(87,815
|
)
|
|
(91,246
|
)
|
||
|
|
|
|
||||
Total shareholders’ equity of the Company
|
253,970
|
|
|
253,126
|
|
||
|
|
|
|
||||
Noncontrolling interest
|
52
|
|
|
51
|
|
||
|
|
|
|
||||
Total shareholders' equity
|
254,022
|
|
|
253,177
|
|
||
|
|
|
|
||||
Total liabilities and shareholders' equity
|
$
|
761,283
|
|
|
$
|
740,904
|
|
|
|
Three Months Ended
|
|
||||||
|
|
March 31,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Commissions
|
|
$
|
166,929
|
|
|
$
|
163,286
|
|
|
Advisory fees
|
|
113,908
|
|
|
114,383
|
|
|
||
Investment banking
|
|
9,829
|
|
|
16,490
|
|
|
||
Principal transactions
|
|
928
|
|
|
167
|
|
|
||
Interest and dividends
|
|
1,216
|
|
|
787
|
|
|
||
Service fees
|
|
32,203
|
|
|
24,902
|
|
|
||
Other income
|
|
10,442
|
|
|
9,369
|
|
|
||
Total revenues
|
|
335,455
|
|
|
329,384
|
|
|
||
Expenses:
|
|
|
|
|
|
||||
Commissions and fees
|
|
234,302
|
|
|
231,311
|
|
|
||
Compensation and benefits
|
|
48,584
|
|
|
47,249
|
|
|
||
Non-cash compensation
|
|
1,494
|
|
|
1,494
|
|
|
||
Brokerage, communication and clearance fees
|
|
4,001
|
|
|
5,319
|
|
|
||
Rent and occupancy, net of sublease revenue
|
|
2,670
|
|
|
2,493
|
|
|
||
Professional services
|
|
4,435
|
|
|
5,018
|
|
|
||
Interest
|
|
5,049
|
|
|
1,866
|
|
|
||
Depreciation and amortization
|
|
5,905
|
|
|
5,809
|
|
|
||
Acquisition-related expenses
|
|
21
|
|
|
913
|
|
|
||
Amortization of retention and forgivable loans
|
|
143
|
|
|
76
|
|
|
||
Amortization of contract acquisition costs
|
|
2,777
|
|
|
2,210
|
|
|
||
Other
|
|
21,134
|
|
|
17,929
|
|
|
||
Total expenses
|
|
330,515
|
|
|
321,687
|
|
|
||
Income before item shown below
|
|
4,940
|
|
|
7,697
|
|
|
||
Change in fair value of contingent consideration
|
|
(112
|
)
|
|
(61
|
)
|
|
||
Income before income taxes
|
|
4,828
|
|
|
7,636
|
|
|
||
Income tax expense
|
|
1,396
|
|
|
2,172
|
|
|
||
Net income
|
|
3,432
|
|
|
5,464
|
|
|
||
Net income attributable to noncontrolling interest
|
|
1
|
|
|
1
|
|
|
||
Net income attributable to the Company
|
|
$
|
3,431
|
|
|
$
|
5,463
|
|
|
Dividends declared on preferred stock
|
|
(8,590
|
)
|
|
(8,508
|
)
|
|
||
Net loss available to common shareholders
|
|
$
|
(5,159
|
)
|
|
$
|
(3,045
|
)
|
|
|
|
|
|
|
|
||||
Net loss per common share available to common shareholders (basic)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
||||
Net loss per common share available to common shareholders (diluted)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
||||
Weighted average common shares used in computation of per share data:
|
|
|
|
|
|
||||
Basic
|
|
143,311,024
|
|
|
195,898,794
|
|
|
||
Diluted
|
|
143,311,024
|
|
|
195,898,794
|
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance - December 31, 2017
|
|
17,012,075
|
|
|
$
|
2
|
|
|
198,583,941
|
|
|
$
|
20
|
|
|
$
|
520,135
|
|
|
$
|
(149,778
|
)
|
|
$
|
12
|
|
|
$
|
370,391
|
|
Cumulative effect of adoption of ASC 606 (See Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,774
|
|
|
11
|
|
|
24,785
|
|
||||||
Balance - January 1, 2018
|
|
17,012,075
|
|
|
2
|
|
|
198,583,941
|
|
|
20
|
|
|
520,135
|
|
|
(125,004
|
)
|
|
23
|
|
|
395,176
|
|
||||||
Issuance of common stock under employee stock purchase plan
|
|
—
|
|
|
—
|
|
|
59,944
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
—
|
|
|
186
|
|
||||||
Exercise of stock options (net of 131,070 shares tendered in payment of exercise price)
|
|
—
|
|
|
—
|
|
|
553,599
|
|
|
—
|
|
|
828
|
|
|
—
|
|
|
—
|
|
|
828
|
|
||||||
Stock-based compensation granted to advisory board, consultants and independent financial advisors
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||||
Stock-based compensation to employees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,487
|
|
|
—
|
|
|
—
|
|
|
1,487
|
|
||||||
Issuance of restricted stock
|
|
—
|
|
|
—
|
|
|
1,855,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Repurchase and retirement of common stock, including 239,481 shares surrendered for tax withholdings and 9,816 shares tendered in payment of exercise price
|
|
—
|
|
|
—
|
|
|
(534,697
|
)
|
|
—
|
|
|
(1,729
|
)
|
|
—
|
|
|
—
|
|
|
(1,729
|
)
|
||||||
Preferred stock issued, net of underwriting discount and expense of $37
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||||
Preferred stock dividends declared and paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,508
|
)
|
|
—
|
|
|
—
|
|
|
(8,508
|
)
|
||||||
Common stock dividends declared and paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,960
|
)
|
|
—
|
|
|
—
|
|
|
(1,960
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,463
|
|
|
1
|
|
|
5,464
|
|
||||||
Balance - March 31, 2018
|
|
17,012,075
|
|
|
$
|
2
|
|
|
200,517,787
|
|
|
$
|
20
|
|
|
$
|
510,409
|
|
|
$
|
(119,541
|
)
|
|
$
|
24
|
|
|
$
|
390,914
|
|
Balance - December 31, 2018
|
|
17,012,075
|
|
|
$
|
2
|
|
|
146,535,796
|
|
|
$
|
14
|
|
|
$
|
344,356
|
|
|
$
|
(91,246
|
)
|
|
$
|
51
|
|
|
$
|
253,177
|
|
Issuance of common stock under employee stock purchase plan
|
|
—
|
|
|
—
|
|
|
57,104
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
154
|
|
||||||
Exercise of stock options
|
|
—
|
|
|
—
|
|
|
170,217
|
|
|
—
|
|
|
285
|
|
|
—
|
|
|
—
|
|
|
285
|
|
||||||
Stock-based compensation granted to consultants and independent financial advisors
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Stock-based compensation to employees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,483
|
|
|
—
|
|
|
—
|
|
|
1,483
|
|
||||||
Issuance of restricted stock
|
|
—
|
|
|
—
|
|
|
2,325,000
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Repurchase and retirement of common stock, including 341,704 shares surrendered for tax withholdings
|
|
—
|
|
|
—
|
|
|
(341,704
|
)
|
|
—
|
|
|
(1,052
|
)
|
|
—
|
|
|
—
|
|
|
(1,052
|
)
|
||||||
Preferred stock issued, net of underwriting discount and expense of $34
|
|
287,230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,915
|
|
|
—
|
|
|
—
|
|
|
6,915
|
|
||||||
Preferred stock dividends declared and paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,590
|
)
|
|
—
|
|
|
—
|
|
|
(8,590
|
)
|
||||||
Common stock dividends declared and paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,794
|
)
|
|
—
|
|
|
—
|
|
|
(1,794
|
)
|
||||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,431
|
|
|
1
|
|
|
3,432
|
|
||||||
Balance - March 31, 2019
|
|
17,299,305
|
|
|
$
|
2
|
|
|
148,746,413
|
|
|
$
|
15
|
|
|
$
|
341,768
|
|
|
$
|
(87,815
|
)
|
|
$
|
52
|
|
|
$
|
254,022
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
3,432
|
|
|
$
|
5,464
|
|
Adjustments to reconcile net income to
|
|
|
|
||||
net cash used in operating activities:
|
|
|
|
||||
Change in fair value of contingent consideration
|
112
|
|
|
61
|
|
||
Adjustment to deferred rent
|
—
|
|
|
420
|
|
||
Amortization of right-of-use assets
|
1,993
|
|
|
—
|
|
||
Amortization of intangible assets
|
3,622
|
|
|
3,835
|
|
||
Amortization of debt discount
|
163
|
|
|
112
|
|
||
Amortization of debt issue cost
|
190
|
|
|
99
|
|
||
Amortization of retention and forgivable loans
|
143
|
|
|
76
|
|
||
Amortization of contract acquisition costs
|
2,777
|
|
|
2,210
|
|
||
Depreciation and other amortization
|
2,283
|
|
|
1,974
|
|
||
Deferred income taxes
|
(305
|
)
|
|
(71
|
)
|
||
Non-cash interest expense on forgivable loan
|
—
|
|
|
40
|
|
||
Non-cash compensation expense
|
1,494
|
|
|
1,494
|
|
||
Loss on write-off of furniture, fixtures and leasehold improvements, net
|
2
|
|
|
—
|
|
||
|
|
|
|
||||
(Increase) decrease in operating assets
|
|
|
|
||||
Securities owned, at fair value
|
2,956
|
|
|
(223
|
)
|
||
Receivables from clearing brokers
|
(17,991
|
)
|
|
(7,299
|
)
|
||
Receivables from other broker-dealers
|
2,935
|
|
|
559
|
|
||
Other receivables, net
|
(2,902
|
)
|
|
(2,798
|
)
|
||
Contract acquisition costs, net
|
(5,835
|
)
|
|
(14,104
|
)
|
||
Notes receivable from financial advisors, net
|
323
|
|
|
205
|
|
||
Cash surrender value of life insurance
|
(1,653
|
)
|
|
20
|
|
||
Income taxes receivable
|
1,683
|
|
|
—
|
|
||
Other assets
|
8,435
|
|
|
(5,229
|
)
|
||
|
|
|
|
||||
Increase (decrease) in operating liabilities
|
|
|
|
||||
Securities sold, but not yet purchased, at fair value
|
2,522
|
|
|
4
|
|
||
Accrued compensation
|
(20,521
|
)
|
|
(14,405
|
)
|
||
Accrued interest
|
1,384
|
|
|
(11
|
)
|
||
Commissions and fees payable
|
(185
|
)
|
|
(679
|
)
|
||
Deferred compensation liability
|
1,292
|
|
|
179
|
|
||
Lease liabilities
|
(1,956
|
)
|
|
—
|
|
||
Accounts payable and accrued liabilities
|
(6,539
|
)
|
|
12,903
|
|
||
Net cash used in operating activities
|
(20,146
|
)
|
|
(15,164
|
)
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of fixed assets
|
(3,249
|
)
|
|
(2,239
|
)
|
||
Net cash used in investing activities
|
(3,249
|
)
|
|
(2,239
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of Series A preferred stock
|
6,915
|
|
|
(37
|
)
|
||
Issuance of common stock
|
439
|
|
|
1,014
|
|
||
Issuance of senior notes
|
96
|
|
|
4,385
|
|
||
Series A preferred stock dividends paid
|
(8,590
|
)
|
|
(8,508
|
)
|
||
Common stock dividends paid
|
(1,794
|
)
|
|
(1,960
|
)
|
||
Repurchase and retirement of common stock
|
(1,052
|
)
|
|
(1,729
|
)
|
||
Borrowings on term loan
|
7,000
|
|
|
—
|
|
||
Bank loan and revolver repayments
|
(209
|
)
|
|
(669
|
)
|
||
Principal payments on notes payable
|
(74
|
)
|
|
(1,779
|
)
|
||
Net cash provided by (used in) financing activities
|
2,731
|
|
|
(9,283
|
)
|
||
Net decrease in cash and cash equivalents
|
(20,664
|
)
|
|
(26,686
|
)
|
||
Cash and cash equivalents including restricted cash, beginning of period
|
189,281
|
|
|
172,863
|
|
||
Cash and equivalents at end of period:
|
|
|
|
||||
Cash and cash equivalents
|
167,847
|
|
|
145,417
|
|
||
Restricted cash
|
770
|
|
|
760
|
|
||
Cash and cash equivalents including restricted cash, end of period
|
$
|
168,617
|
|
|
$
|
146,177
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Interest paid
|
$
|
3,312
|
|
|
$
|
1,626
|
|
Taxes paid
|
37
|
|
|
27
|
|
For the Three Months Ended March 31, 2019
|
|
Independent Advisory and Brokerage Services
|
|
Ladenburg
|
|
Insurance Brokerage
|
|
Corporate
|
|
Total
|
||||||||||
Commissions
|
|
$
|
128,871
|
|
|
$
|
2,490
|
|
|
$
|
35,568
|
|
|
$
|
—
|
|
|
$
|
166,929
|
|
Advisory fees
|
|
112,348
|
|
|
1,560
|
|
|
—
|
|
|
—
|
|
|
113,908
|
|
|||||
Investment banking
|
|
197
|
|
|
9,632
|
|
|
—
|
|
|
—
|
|
|
9,829
|
|
|||||
Principal transactions
|
|
(7
|
)
|
|
1,028
|
|
|
—
|
|
|
(93
|
)
|
|
928
|
|
|||||
Interest and dividends
|
|
669
|
|
|
275
|
|
|
—
|
|
|
272
|
|
|
1,216
|
|
|||||
Service fees
|
|
31,361
|
|
|
589
|
|
|
—
|
|
|
253
|
|
|
32,203
|
|
|||||
Other income
|
|
9,549
|
|
|
237
|
|
|
601
|
|
|
55
|
|
|
10,442
|
|
|||||
Total revenues
|
|
$
|
282,988
|
|
|
$
|
15,811
|
|
|
$
|
36,169
|
|
|
$
|
487
|
|
|
$
|
335,455
|
|
For the Three Months Ended March 31, 2018
|
|
Independent Advisory and Brokerage Services
|
|
Ladenburg
|
|
Insurance Brokerage
|
|
Corporate
|
|
Total
|
||||||||||
Commissions
|
|
$
|
129,745
|
|
|
$
|
3,213
|
|
|
$
|
30,328
|
|
|
$
|
—
|
|
|
$
|
163,286
|
|
Advisory fees
|
|
112,513
|
|
|
1,816
|
|
|
—
|
|
|
54
|
|
|
114,383
|
|
|||||
Investment banking
|
|
116
|
|
|
16,374
|
|
|
—
|
|
|
—
|
|
|
16,490
|
|
|||||
Principal transactions
|
|
11
|
|
|
156
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|||||
Interest and dividends
|
|
534
|
|
|
75
|
|
|
—
|
|
|
178
|
|
|
787
|
|
|||||
Service fees
|
|
24,140
|
|
|
568
|
|
|
—
|
|
|
194
|
|
|
24,902
|
|
|||||
Other income
|
|
8,470
|
|
|
112
|
|
|
732
|
|
|
55
|
|
|
9,369
|
|
|||||
Total revenues
|
|
$
|
275,529
|
|
|
$
|
22,314
|
|
|
$
|
31,060
|
|
|
$
|
481
|
|
|
$
|
329,384
|
|
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||
Contract assets - Insurance trailing commissions
|
|
$
|
63,718
|
|
|
$
|
64,300
|
|
Contract liabilities - Insurance trailing commissions
|
|
31,510
|
|
|
31,854
|
|
|
|
March 31, 2019
|
||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Total Estimated Fair Value
|
||||||||
Cash and cash equivalents
|
|
$
|
167,847
|
|
|
$
|
167,847
|
|
|
$
|
—
|
|
|
$
|
167,847
|
|
Receivables from clearing brokers
|
|
42,059
|
|
|
—
|
|
|
42,059
|
|
|
42,059
|
|
||||
Receivables from other broker-dealers
|
|
4,143
|
|
|
—
|
|
|
4,143
|
|
|
4,143
|
|
||||
Notes receivables, net
(1)
|
|
5,343
|
|
|
—
|
|
|
5,343
|
|
|
5,343
|
|
||||
Other receivables, net
|
|
136,144
|
|
|
—
|
|
|
136,144
|
|
|
136,144
|
|
||||
|
|
$
|
355,536
|
|
|
$
|
167,847
|
|
|
$
|
187,689
|
|
|
$
|
355,536
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
|
$
|
18,743
|
|
|
$
|
—
|
|
|
$
|
18,743
|
|
|
$
|
18,743
|
|
Commissions and fees payable
|
|
105,121
|
|
|
—
|
|
|
105,121
|
|
|
105,121
|
|
||||
Accounts payable and accrued liabilities
(2)
|
|
39,824
|
|
|
—
|
|
|
39,824
|
|
|
39,824
|
|
||||
Accrued interest
|
|
1,507
|
|
|
—
|
|
|
1,507
|
|
|
1,507
|
|
||||
Notes payable, net
(3)
|
|
261,237
|
|
|
—
|
|
|
276,465
|
|
|
276,465
|
|
||||
|
|
$
|
426,432
|
|
|
$
|
—
|
|
|
$
|
441,660
|
|
|
$
|
441,660
|
|
|
|
December 31, 2018
|
||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Total Estimated Fair Value
|
||||||||
Cash and cash equivalents
|
|
$
|
182,693
|
|
|
$
|
182,693
|
|
|
$
|
—
|
|
|
$
|
182,693
|
|
Receivables from clearing brokers
|
|
24,068
|
|
|
—
|
|
|
24,068
|
|
|
24,068
|
|
||||
Receivables from other broker-dealers
|
|
7,078
|
|
|
—
|
|
|
7,078
|
|
|
7,078
|
|
||||
Notes receivables, net
(1)
|
|
5,809
|
|
|
—
|
|
|
5,809
|
|
|
5,809
|
|
||||
Other receivables, net
|
|
133,242
|
|
|
—
|
|
|
133,242
|
|
|
133,242
|
|
||||
|
|
$
|
352,890
|
|
|
$
|
182,693
|
|
|
$
|
170,197
|
|
|
$
|
352,890
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Accrued compensation
|
|
$
|
39,264
|
|
|
$
|
—
|
|
|
$
|
39,264
|
|
|
$
|
39,264
|
|
Commissions and fees payable
|
|
105,306
|
|
|
—
|
|
|
105,306
|
|
|
105,306
|
|
||||
Accounts payable and accrued liabilities
(2)
|
|
46,511
|
|
|
—
|
|
|
46,511
|
|
|
46,511
|
|
||||
Accrued interest
|
|
123
|
|
|
—
|
|
|
123
|
|
|
123
|
|
||||
Notes payable, net
(3)
|
|
254,072
|
|
|
—
|
|
|
266,844
|
|
|
266,844
|
|
||||
|
|
$
|
445,276
|
|
|
$
|
—
|
|
|
$
|
458,048
|
|
|
$
|
458,048
|
|
|
|
March 31, 2019
|
||||||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated Fair Value
|
||||||||||
Certificates of deposit
|
|
$
|
191
|
|
|
$
|
191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
191
|
|
Debt securities
|
|
2,348
|
|
|
—
|
|
|
2,348
|
|
|
—
|
|
|
2,348
|
|
|||||
U.S. treasury notes
|
|
800
|
|
|
—
|
|
|
800
|
|
|
—
|
|
|
800
|
|
|||||
Common stock and warrants
|
|
4,628
|
|
|
3,127
|
|
|
1,501
|
|
|
—
|
|
|
4,628
|
|
|||||
Total
|
|
$
|
7,967
|
|
|
$
|
3,318
|
|
|
$
|
4,649
|
|
|
$
|
—
|
|
|
$
|
7,967
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration payable
|
|
$
|
2,342
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,342
|
|
|
$
|
2,342
|
|
Debt securities
|
|
345
|
|
|
—
|
|
|
345
|
|
|
—
|
|
|
345
|
|
|||||
Common stock and warrants
|
|
4,752
|
|
|
4,752
|
|
|
—
|
|
|
—
|
|
|
4,752
|
|
|||||
Total
|
|
$
|
7,439
|
|
|
$
|
4,752
|
|
|
$
|
345
|
|
|
$
|
2,342
|
|
|
$
|
7,439
|
|
|
|
December 31, 2018
|
||||||||||||||||||
Assets
|
|
Carrying Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Estimated Fair Value
|
||||||||||
Certificates of deposit
|
|
$
|
426
|
|
|
$
|
426
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
426
|
|
Debt securities
|
|
1,447
|
|
|
—
|
|
|
1,447
|
|
|
—
|
|
|
1,447
|
|
|||||
U.S. treasury notes
|
|
794
|
|
|
—
|
|
|
794
|
|
|
—
|
|
|
794
|
|
|||||
Common stock and warrants
|
|
8,256
|
|
|
7,070
|
|
|
1,186
|
|
|
—
|
|
|
8,256
|
|
|||||
Total
|
|
$
|
10,923
|
|
|
$
|
7,496
|
|
|
$
|
3,427
|
|
|
$
|
—
|
|
|
$
|
10,923
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration payable
|
|
$
|
2,230
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,230
|
|
|
$
|
2,230
|
|
Debt securities
|
|
196
|
|
|
—
|
|
|
196
|
|
|
—
|
|
|
196
|
|
|||||
Common stock and warrants
|
|
2,379
|
|
|
2,379
|
|
|
—
|
|
|
—
|
|
|
2,379
|
|
|||||
Total
|
|
$
|
4,805
|
|
|
$
|
2,379
|
|
|
$
|
196
|
|
|
$
|
2,230
|
|
|
$
|
4,805
|
|
Fair value of contingent consideration as of December 31, 2017
|
|
$
|
2,104
|
|
Payments
|
|
(1,353
|
)
|
|
Change in fair value of contingent consideration
|
|
238
|
|
|
Fair value of contingent consideration in connection with KFG and FSFG acquisitions
|
|
1,241
|
|
|
Fair value of contingent consideration as of December 31, 2018
|
|
$
|
2,230
|
|
Change in fair value of contingent consideration
|
|
112
|
|
|
Fair value of contingent consideration as of March 31, 2019
|
|
$
|
2,342
|
|
|
March 31, 2019
|
||
Operating lease cost
|
$
|
2,404
|
|
Short-term lease cost
|
33
|
|
|
Variable lease cost
|
263
|
|
|
Sublease income
|
(24
|
)
|
|
Total lease cost
|
$
|
2,676
|
|
|
Operating and Finance Leases
|
||
Remainder of 2019
|
$
|
6,796
|
|
2020
|
7,829
|
|
|
2021
|
5,815
|
|
|
2022
|
5,059
|
|
|
2023
|
3,899
|
|
|
Thereafter
|
15,750
|
|
|
Total lease payments
|
45,148
|
|
|
Less imputed interest
|
(7,435
|
)
|
|
Present value of lease payments
|
$
|
37,713
|
|
|
Three months ended March 31, 2019
|
||
Cash paid for amounts included in measurement of lease liabilities:
|
|
||
Operating cash flows from operating and finance leases
|
$
|
2,664
|
|
|
Three months ended March 31, 2019
|
||
Operating and finance leases
|
$
|
186
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Weighted-Average Estimated Useful Life (years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
||||||||
Technology
|
|
7.9
|
|
$
|
25,563
|
|
|
$
|
22,944
|
|
|
$
|
25,563
|
|
|
$
|
22,187
|
|
Relationships with financial advisors
|
|
14.3
|
|
126,122
|
|
|
62,200
|
|
|
126,122
|
|
|
59,584
|
|
||||
Covenants not-to-compete
|
|
3.8
|
|
6,964
|
|
|
6,378
|
|
|
6,964
|
|
|
6,258
|
|
||||
Trade names
|
|
7.7
|
|
16,916
|
|
|
14,601
|
|
|
16,916
|
|
|
14,472
|
|
||||
Total
|
|
|
|
$
|
175,565
|
|
|
$
|
106,123
|
|
|
$
|
175,565
|
|
|
$
|
102,501
|
|
|
|
||
Remainder of 2019
|
$
|
9,449
|
|
2020
|
11,466
|
|
|
2021
|
6,628
|
|
|
2022
|
6,554
|
|
|
2023
|
6,217
|
|
|
2024 - 2036
|
29,128
|
|
|
|
$
|
69,442
|
|
9.
|
Notes Payable
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Note payable under subsidiary's term loan with bank
|
$
|
6,823
|
|
|
$
|
—
|
|
Note payable under subsidiary's revolver with bank
|
56
|
|
|
89
|
|
||
Notes payable to Kestler Financial Group's former shareholders
|
5,347
|
|
|
5,399
|
|
||
Notes payable to Four Seasons Financial Group's former shareholders
|
342
|
|
|
364
|
|
||
6.5% Senior Notes, net of $65 and $67 of unamortized discount in 2019 and 2018, respectively
|
82,744
|
|
|
82,742
|
|
||
7% Senior Notes, net of $44 of unamortized discount in 2019 and 2018
|
42,476
|
|
|
42,475
|
|
||
7.25% Senior Notes
|
60,000
|
|
|
60,000
|
|
||
7.25% December 2018 Notes, net of $6,100 and $6,261 of unamortized discount in 2019 and 2018, respectively
|
70,250
|
|
|
70,089
|
|
||
Less: Unamortized debt issuance costs
|
(6,801
|
)
|
|
(7,086
|
)
|
||
Total
|
$
|
261,237
|
|
|
$
|
254,072
|
|
Grant Date
|
|
Final Vesting Date
|
Shares
|
Fair Value
(1)
|
|||
January 10, 2019
(2)
|
|
January 10, 2023
|
2,295,000
|
|
$
|
7,436
|
|
January 25, 2019
(3)
|
|
January 25, 2021
|
30,000
|
|
86
|
|
|
|
|
|
2,325,000
|
|
$
|
7,522
|
|
(1)
|
Fair value is calculated using the closing price on the grant date.
|
(2)
|
Vests in
four
equal annual installments beginning on the first anniversary of the grant date.
|
(3)
|
Vests in
two
equal annual installments beginning on the first anniversary of the grant date.
|
|
Three Months Ended
March 31, |
|
||||
|
2019
|
|
2018
|
|
||
Basic weighted-average shares
|
143,311,024
|
|
|
195,898,794
|
|
|
Effect of dilutive securities:
|
|
|
|
|
||
Options to purchase common stock
|
—
|
|
|
—
|
|
|
Restricted shares of common stock
|
—
|
|
|
—
|
|
|
Dilutive potential common shares
|
—
|
|
|
—
|
|
|
Weighted average common shares outstanding and dilutive potential common shares
|
143,311,024
|
|
|
195,898,794
|
|
|
Three Months Ended March 31, 2019
|
|
Independent
Advisory and Brokerage Services
|
|
Ladenburg
|
|
Insurance Brokerage
|
|
Corporate
|
|
Total
|
||||||||||
Revenues
|
|
$
|
282,988
|
|
|
$
|
15,811
|
|
|
$
|
36,169
|
|
|
$
|
487
|
|
|
$
|
335,455
|
|
Income (loss) before income taxes
|
|
14,262
|
|
|
1,221
|
|
|
(476
|
)
|
|
(10,179
|
)
|
(1)
|
4,828
|
|
|||||
EBITDA, as adjusted
(3)
|
|
22,798
|
|
|
1,603
|
|
|
169
|
|
|
(4,177
|
)
|
|
20,393
|
|
|||||
Identifiable assets
(2)
|
|
528,795
|
|
|
57,963
|
|
|
96,738
|
|
|
77,787
|
|
|
761,283
|
|
|||||
Depreciation and amortization
|
|
5,309
|
|
|
120
|
|
|
471
|
|
|
5
|
|
|
5,905
|
|
|||||
Interest
|
|
85
|
|
|
(13
|
)
|
|
62
|
|
|
4,915
|
|
|
5,049
|
|
|||||
Capital expenditures
|
|
3,009
|
|
|
—
|
|
|
27
|
|
|
213
|
|
|
3,249
|
|
|||||
Non-cash compensation
|
|
259
|
|
|
179
|
|
|
—
|
|
|
1,056
|
|
|
1,494
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
275,529
|
|
|
$
|
22,314
|
|
|
$
|
31,060
|
|
|
$
|
481
|
|
|
$
|
329,384
|
|
Income (loss) before income taxes
|
|
10,680
|
|
|
4,313
|
|
|
(131
|
)
|
|
(7,226
|
)
|
(1)
|
7,636
|
|
|||||
EBITDA, as adjusted
(3)
|
|
20,011
|
|
|
4,651
|
|
|
441
|
|
|
(4,939
|
)
|
|
20,164
|
|
|||||
Identifiable assets
(2)
|
|
468,800
|
|
|
46,960
|
|
|
87,257
|
|
|
81,138
|
|
|
684,155
|
|
|||||
Depreciation and amortization
|
|
5,452
|
|
|
112
|
|
|
242
|
|
|
3
|
|
|
5,809
|
|
|||||
Interest
|
|
287
|
|
|
35
|
|
|
168
|
|
|
1,376
|
|
|
1,866
|
|
|||||
Capital expenditures
|
|
2,095
|
|
|
90
|
|
|
54
|
|
|
—
|
|
|
2,239
|
|
|||||
Non-cash compensation
|
|
310
|
|
|
176
|
|
|
57
|
|
|
951
|
|
|
1,494
|
|
(2)
|
Identifiable assets are presented as of the end of the period.
|
(3)
|
The following table reconciles income before income taxes for the three months ended March 31, 2019 and 2018 to EBITDA, as adjusted.
|
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
Income before income taxes
|
|
$
|
4,828
|
|
|
$
|
7,636
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
||
Interest income
|
|
(542
|
)
|
|
(370
|
)
|
|
||
Change in fair value of contingent consideration
|
|
112
|
|
|
61
|
|
|
||
Interest expense
|
|
5,049
|
|
|
1,866
|
|
|
||
Depreciation and amortization
|
|
5,905
|
|
|
5,809
|
|
|
||
Non-cash compensation expense
|
|
1,494
|
|
|
1,494
|
|
|
||
Amortization of retention and forgivable loans
|
|
143
|
|
|
76
|
|
|
||
Amortization of contract acquisition costs
|
|
2,777
|
|
|
2,210
|
|
|
||
Financial advisor recruiting expense
|
|
7
|
|
|
87
|
|
|
||
Acquisition-related expense
|
|
21
|
|
|
913
|
|
|
||
Income attributable to noncontrolling interest
|
|
(1
|
)
|
|
(1
|
)
|
|
||
Other
(1) (2)
|
|
600
|
|
|
383
|
|
|
||
EBITDA, as adjusted
|
|
$
|
20,393
|
|
|
$
|
20,164
|
|
|
|
|
|
|
|
|
||||
EBITDA, as adjusted
|
|
|
|
|
|
||||
Independent Advisory and Brokerage Services
|
|
$
|
22,798
|
|
|
$
|
20,011
|
|
|
Ladenburg
|
|
1,603
|
|
|
4,651
|
|
|
||
Insurance Brokerage
|
|
169
|
|
|
441
|
|
|
||
Corporate
|
|
(4,177
|
)
|
|
(4,939
|
)
|
|
||
Total segments
|
|
$
|
20,393
|
|
|
$
|
20,164
|
|
|
(1)
|
Includes severance costs of
$10
, excise and franchise tax expense of
$148
, compensation expense that may be paid in stock of
$154
and non-recurring expenses related to a block repurchase of our common stock and other legal matters of
$288
for the three months ended March 31, 2019.
|
(2)
|
Includes severance costs of
$88
, excise and franchise tax expense of
$153
and compensation expense that may be paid in stock of
$142
for the three months ended March 31, 2018.
|
|
Three Months Ended
March 31, |
|
||||||
|
2019
|
|
2018
|
|
||||
Total revenues
|
$
|
335,455
|
|
|
$
|
329,384
|
|
|
Total expenses
|
330,515
|
|
|
321,687
|
|
|
||
Income before income taxes
|
4,828
|
|
|
7,636
|
|
|
||
Net income attributable to the Company
|
3,431
|
|
|
5,463
|
|
|
||
|
|
|
|
|
||||
Reconciliation of net income attributable to the Company to EBITDA, as adjusted:
|
|
|
|
|
||||
Net income attributable to the Company
|
$
|
3,431
|
|
|
$
|
5,463
|
|
|
Less:
|
|
|
|
|
|
|
||
Interest income
|
(542
|
)
|
|
(370
|
)
|
|
||
Change in fair value of contingent consideration
|
112
|
|
|
61
|
|
|
||
Add:
|
|
|
|
|
||||
Interest expense
|
5,049
|
|
|
1,866
|
|
|
||
Income tax expense
|
1,396
|
|
|
2,172
|
|
|
||
Depreciation and amortization
|
5,905
|
|
|
5,809
|
|
|
||
Non-cash compensation expense
|
1,494
|
|
|
1,494
|
|
|
||
Amortization of retention and forgivable loans
|
143
|
|
|
76
|
|
|
||
Amortization of contract acquisition costs
(3)
|
2,777
|
|
|
2,210
|
|
|
||
Financial advisor recruiting expense
|
7
|
|
|
87
|
|
|
||
Acquisition-related expense
|
21
|
|
|
913
|
|
|
||
Other
(1) (2)
|
600
|
|
|
383
|
|
|
||
EBITDA, as adjusted
|
$
|
20,393
|
|
|
$
|
20,164
|
|
|
(1)
|
Includes severance costs of
$10
, excise and franchise tax expense of
$148
, compensation expense that may be paid in stock of
$154
and non-recurring expenses related to a block repurchase of our common stock and other legal matters of
$288
for the three months ended March 31, 2019.
|
(2)
|
Includes severance costs of
$88
, excise and franchise tax expense of
$153
and compensation expense that may be paid in stock of
$142
for the three months ended March 31, 2018.
|
(3)
|
See Note 2, "Revenue from Contracts with Customers" to our condensed consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q.
|
|
Three Months Ended
March 31, |
|
||||||
|
2019
|
|
2018
|
|
||||
Revenues:
|
|
|
|
|
||||
Independent advisory and brokerage services
|
$
|
282,988
|
|
|
$
|
275,529
|
|
|
Ladenburg
|
15,811
|
|
|
22,314
|
|
|
||
Insurance Brokerage
|
36,169
|
|
|
31,060
|
|
|
||
Corporate
|
487
|
|
|
481
|
|
|
||
Total revenues
|
$
|
335,455
|
|
|
$
|
329,384
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes:
|
|
|
|
|
||||
Independent advisory and brokerage services
|
$
|
14,262
|
|
|
$
|
10,680
|
|
|
Ladenburg
|
1,221
|
|
|
4,313
|
|
|
||
Insurance Brokerage
|
(476
|
)
|
|
(131
|
)
|
|
||
Corporate
(1)
|
(10,179
|
)
|
|
(7,226
|
)
|
|
||
Total income (loss) before income taxes
|
$
|
4,828
|
|
|
$
|
7,636
|
|
|
|
|
|
|
|
||||
EBITDA, as adjusted:
|
|
|
|
|
||||
Independent advisory and brokerage services
|
$
|
22,798
|
|
|
$
|
20,011
|
|
|
Ladenburg
|
1,603
|
|
|
4,651
|
|
|
||
Insurance Brokerage
|
169
|
|
|
441
|
|
|
||
Corporate
|
(4,177
|
)
|
|
(4,939
|
)
|
|
||
Total EBITDA, as adjusted
(2)
|
$
|
20,393
|
|
|
$
|
20,164
|
|
|
(1)
|
Includes interest expense, compensation, professional fees and other general administrative expenses related to the Corporate segment.
|
(2)
|
See Note 15 to our condensed consolidated financial statements for a reconciliation of income before income taxes to EBITDA, as adjusted.
|
Period
|
|
Total Number of Shares Purchased |
|
Average Price
Paid
per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or Programs
|
|
Maximum
Number
of Shares that
May Yet Be
Purchased
Under the
Plans or
Programs(1)
|
|||||
January 1 to January 31, 2019
|
|
330,629
|
|
(2)
|
$
|
—
|
|
|
—
|
|
|
2,315,895
|
|
February 1 to February 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,315,895
|
|
|
March 1 to March 31, 2019
|
|
11,075
|
|
(3)
|
—
|
|
|
—
|
|
|
2,315,895
|
|
|
Total
|
|
341,704
|
|
|
$
|
—
|
|
|
—
|
|
|
|
(1)
|
In March 2007, October 2011, November 2014, November 2016 and April 2019, our board of directors authorized in the aggregate the repurchase of up to 37,500,000 shares of our common stock from time to time on the open market or in privately negotiated transactions depending on market conditions. As of March 31, 2019, 25,184,105 shares had been repurchased for $66,116 under the program and 2,315,895 shares remain available for repurchase under the program depending on market conditions. In April 2019, our board of directors authorized the repurchase of up to an additional 10,000,000 shares of our common stock from time to time on the open market or in privately negotiated transactions depending on market conditions. Beginning in the fourth quarter of 2015, we adopted a Rule 10b5-1 trading plan to permit the repurchase of common stock pursuant to the existing stock repurchase program during certain restricted trading periods. We intend to execute similar Rule 10b5-1 plans periodically in the future.
|
(2)
|
Includes 330,629 shares surrendered to the Company in satisfaction of withholding taxes in connection with the vesting of restricted stock awards issued under the Company's Amended and Restated 2009 Incentive Compensation Plan.
|
(3)
|
Includes 11,075 shares surrendered to the Company in satisfaction of withholding taxes in connection with the vesting of restricted stock awards issued under the Company's Amended and Restated 2009 Incentive Compensation Plan.
|
Exhibit No.
|
|
Description
|
|
|
31.1
|
|
|
||
31.2
|
|
|
||
32.1
|
|
|
||
32.2
|
|
|
||
101.INS
|
|
XBRL Instance Document.*
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.*
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.*
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.*
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Label Linkbase.*
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Presentation Linkbase.*
|
|
|
|
|
|
LADENBURG THALMANN FINANCIAL SERVICES INC.
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
Date:
|
|
May 9, 2019
|
|
By:
|
/s/ Brett H. Kaufman
|
|
|
|
|
|
|
Brett H. Kaufman
|
|
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
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(Principal Financial and Accounting Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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