CCUR Holdings, Inc. (Form: 8-K, Received: 05/09/2019 16:09:47)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

May 8, 2019

CCUR Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-37706	04-2735766
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4375 River Green Parkway, Suite 210, Duluth, Georgia	30096
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (770) 305-6435

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
None

ITEM 1.01. Entry into a Material Definitive Agreement.

On February 14, 2019, CCUR Holdings, Inc. (the “Company”) and CIDM LLC (the “Manager”) entered into a “Management Agreement,” a copy of which was filed as Exhibit 10.2 in the Form 8-K filed by the Company on February 14, 2019 and is incorporated herein by reference. Pursuant to the Management Agreement, the Manager (i) provides the Company with advisory services with respect to the management and allocation of the Assets (as defined therein) of the Company and its subsidiaries and (ii) exercises discretionary management authority over the Company’s trading portfolio of publicly traded securities.

On May 8, 2019, the Company entered into a “First Amendment to Management Agreement” (the “First Amendment”) amending certain terms of the Management Agreement. A copy of the First Amendment is attached hereto as Exhibit 10.1 and incorporated herein by reference in its entirety. Any capitalized terms not defined herein shall have the meaning given to them in the Management Agreement, as amended. Pursuant to the First Amendment, the Management Agreement is amended to provide:

(i)

The fees due to the Manager (which are payable via a grant of stock appreciation rights) shall be paid by the Company within three (3) calendar days of the Company’s next quarterly or annual report following the period with respect to which such fees are payable;

(ii)

The Company’s obligation to reimburse expenses of the Manager shall be satisfied through a cash payment of $50,000, paid quarterly in arrears; and

(iii)

With respect to the stock appreciation rights to be granted to the Manager, the Base Price (as defined therein) shall be $0.01.

The foregoing description of the First Amendment is qualified in its entirety by the full text of the First Amendment, a copy of which is furnished as Exhibit 10.1 hereto and incorporated herein by reference.

ITEM 2.02. Results of Operations and Financial Condition.

On May 9, 2019, the Company issued a press release containing information about its financial condition and results of operations for its third fiscal year 2019 quarter ending March 31, 2019. Included in the press release are (i) the unaudited condensed consolidated balance sheets of the Company as of March 31, 2019 and June 30, 2018, and (ii) the Company’s unaudited condensed consolidated statements of operations for (a) the three and nine months ended March 31, 2019 and March 31, 2018 and (b) the three months ended March 31, 2019 and December 31, 2018. A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

ITEM 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description

	10.1	First Amendment to Management Agreement between CCUR Holdings, Inc. and CIDM LLC, dated as of May 8, 2019.

	99.1	Press Release of CCUR Holdings, Inc., released on May 9, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 9, 2019

	CCUR Holdings, Inc.
	(Registrant)

	By:	/s/ Warren Sutherland
		Warren Sutherland
		Chief Financial Officer

Exhibit 10.1

FIRST AMENDMENT TO

MANAGEMENT AGREEMENT

FIRST AMENDMENT, dated as of May 8, 2019 (this “ Amendment ”), to that certain Management Agreement, dated as of February 14, 2019 (the “ Management Agreement ”), by and between CIDM LLC, a Delaware limited liability company (the “ Manager ”), and CCUR Holdings, Inc., a Delaware corporation (the “ Company ”).

WHEREAS, the Manager and the Company desire to amend the Management Agreement to, among other things, alter the compensation paid to the Manager and the method of payment of such compensation by the Company; and

WHEREAS, pursuant to Section 26 of the Management Agreement, the Management Agreement may be amended in writing, which writing is executed by each of the Manager and the Company.

NOW, THEREFORE, it is hereby agreed as follows:

1. Defined Terms . Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Management Agreement.

2. Amendments to Management Agreement .

2.1. Section 6(a) of the Agreement is hereby amended and restated in its entirety and replaced with the following:

“For the Manager’s services under this Agreement, the Company agrees to pay to the Manager the consideration set forth in Schedule A , which shall constitute all fees and expense reimbursement due to the Manager hereunder.”

2.2. Section 6(c) of the Agreement is hereby amended such that the words “within thirty (30) calendar days” is deleted and replaced with the following:

“on or within three calendar days of the Company’s filing of its next quarterly or annual report (i.e., 10-Q, 10-K), as applicable,”

2.3. The “Expenses.” section of Schedule A to the Management Agreement is hereby amended and restated in its entirety and replaced with the following:

“ Expenses.

The Company shall pay (or cause to be paid) to the Manager, on a quarterly basis in arrears, a cash payment of $50,000, which payment will be in full satisfaction of any obligation that the Company has under this Agreement or otherwise with respect to the payment or reimbursement of expenses of the Manager.”

2.4. The “Method of Payment.” section of Schedule A to the Management Agreement is hereby amended and restated in its entirety and replaced with the following:

“ Method of Payment.

Except with respect to payments contemplated by the “Expenses” section above, which shall be made in cash to an account designated by the Manager, the Company shall pay any amounts payable to the Manager hereunder, including without limitation the Performance Fee and the Management Fee, via a grant of stock appreciation rights in the form attached as Exhibit A hereto (“ SAR Grant ”). The Cash value of a SAR Grant for the purpose of determining the amount by which it reduces the fees payable under this Agreement shall equal the Base Price (as defined in the SAR Grant) multiplied by the number of Appreciation Rights (as defined in the SAR Grant) granted pursuant to such SAR Grant.”

2.5. The third sentence of Section 1 of Exhibit A of the Management Agreement, which formally read “The “ Base Price ” means $[●] ¹ .” (and including the text of the footnote thereto), is hereby amended and restated in its entirety and replaced with the following:

“The “ Base Price ” means $0.01.”

3. No Other Changes . Except as expressly provided herein, no term or provision of the Management Agreement shall be amended, modified or supplemented, and each term and provision of the Management Agreement is hereby ratified and shall remain in full force and effect.

4. Governing Law . The validity, performance, construction and effect of this Amendment shall be governed by and construed in accordance with the internal laws of the State of Georgia, without regard to principles of conflicts of law.

5. Counterparts . This Amendment may be executed by the parties hereto in any number of separate counterparts (including by electronic transmission), and all of said counterparts taken together shall be deemed to constitute the same instrument.

[ Remainder of page intentionally left blank ]

- 2 -

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

	CCUR HOLDINGS, INC.


	By:	/s/ Wayne Barr, Jr.
	Name:	Wayne Barr, Jr.
	Title	CEO & President

	By:	/s/ Warren Sutherland
	Name:	Warren Sutherland
	Title:	CFO


	CIDM LLC


	By:	/s/ Julian Singer
	Name:	Julian Singer
	Title:	Member

[Signature Page to First Amendment to Management Agreement]

Exhibit 99.1

CCUR HOLDINGS EARNS $0.16 PER SHARE DURING THIRD QUARTER FY 2019

Merchant Cash Advance and Real Estate Revenues Grow Sequentially; Company Generates Positive Operating Cash Flow

DULUTH, GA, MAY 9, 2019 – CCUR Holdings, Inc. (OTCQB: CCUR) today reported net income for the third fiscal quarter of 2019 of $1,411,000, or $0.16 per share, an improvement from the net loss of $1,093,000, or $0.11 a share for the year-ago comparable period. Revenue for the quarter nearly tripled on a sequential basis to $1,074,000 with Merchant Cash Advance (MCA) income growing to $825,000 and interest income on loans growing to $249,000. Other interest, dividend and investment income for the period totaled $1,557,000.

General and administrative expenses declined by 39% from the prior year quarter to $728,000. Total operating expenses for the quarter were $1,305,000 and included sales and marketing expenses of $181,000 to support the growth of the Company’s MCA operations as well as a $343,000 provision for MCA credit losses. The Company’s operating loss for the quarter declined to $231,000 as compared to an operating loss of $1,186,000 for the third quarter of fiscal 2018 and operating cash flow for the quarter was $613,000.

Net income of $1,411,000 for the third quarter reduced the net loss for the first nine months of fiscal 2019 to $122,000, or $0.01 per share. Revenue for the first nine months was $1,610,000 and the operating loss was $1,817,000. Total working capital as of March 31, 2019 was $49.6 million as compared with $50.7 million as of December 31, 2018, and $55.3 million as of June 30, 2018. Since June 30, 2018, the Company has used $1,318,000 of cash to repurchase shares under its stock repurchase program.

“By generating net income, as well as positive operating cash flow, our fiscal third quarter results begin to reflect the potential returns we believe CCUR Holdings is capable of generating for our stockholders,” said Wayne Barr, President and CEO. “Our subsidiary LM Capital Solutions completed the transaction with LuxeMark Capital mid-quarter and we have completed the integration of this investment in the MCA financing space into CCUR’s operations. We also grew revenue from our Recur Holdings real estate operations during the quarter and continue to explore additional real estate focused opportunities.”

“The acquired LuxeMark assets and personnel provide CCUR with valuable experience in evaluating MCA originators as well as working relationships with a core group of originators that have an established track record of MCA underwriting and servicing excellence. These core differentiators provide us with the foundation on which we hope to build scalable and sustainable operations to identify and place capital with additional MCA originators adhering to the same high levels of excellence. We believe this focused approach to the MCA market began to demonstrate its potential for the Company during the third quarter,” continued Mr. Barr.

“At the same time, our team is continuing to search for other attractive yield-generating opportunities to complement our MCA operations, as well as other businesses and assets at attractive valuations. Our objective is to build on the returns we generated during the third quarter as well as begin to utilize our NOLs. We aim to achieve this objective while remaining keenly focused on maintaining our low operating costs,” concluded Mr. Barr.

Stock Repurchase Program Update

On February 11, 2019, as previously announced, the Board of Directors approved a new stock repurchase program allowing the Company to repurchase up to an additional 500,000 shares of the Company’s common stock, for a total of 1,500,000 authorized shares. The Company repurchased a total of 188,510 shares during the fiscal third quarter for a total of $703,000. A total of 414,607 shares under the authorized program remain available for repurchase as of March 31, 2019.

About CCUR Holdings, Inc.

CCUR Holdings, Inc. is actively pursuing business opportunities to maximize the value of its assets through evaluation of additional operating businesses or assets for acquisition and continued development of its current real estate and MCA operations through its subsidiaries Recur Holdings, LLC and LM Capital Solutions, LLC. More information on the Company is available at www.ccurholdings.com .

Forward Looking Statements

Certain statements made or incorporated by reference herein may constitute “forward-looking statements” within the meaning of federal securities laws. When used or incorporated by reference in this report, the words “believes,” “expects,” “estimates,” “anticipates,” and similar expressions are intended to identify forward-looking statements. Statements regarding future events and developments such as future financial performance or returns, as well as expectations, beliefs, plans, estimates or projections relating to the future and current assessments of business opportunities, are forward-looking statements within the meaning of these laws. These statements are based on beliefs and assumptions of CCUR’s management, which are based on currently available information. Except for the historical information contained herein, the matters discussed in this communication may contain forward-looking statements that involve risks and uncertainties that may cause CCUR’s actual results to be materially different from such forward-looking statements and could materially adversely affect its business, financial condition, operating results and cash flows. These risks and uncertainties include, but are not limited to, CCUR’s ability to successfully negotiate, perform due diligence and consummate any additional acquisitions, expected cash and liquidity positions, expected financial performance and revenue streams, market fluctuations in or material financial or regulatory changes impacting the MCA and real estate industry and general business conditions, as well other risks listed in the Company’s Form 10-K filed on September 7, 2018 and subsequent quarterly reports filed with the Securities and Exchange Commission and risk and uncertainties not presently known to CCUR or that CCUR currently deems immaterial.

CCUR wishes to caution against placing undue reliance on any forward-looking statements, which speak only as of the date on which they were made. CCUR does not undertake any obligation to update forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.

(Tables to follow)

Contact:

Doug Sherk

doug@mdcgs.com

(415) 652-9100

CCUR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Amounts in thousands, except share and per share data)

	March 31, 2019			June 30, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	14,665		$	32,992
Equity securities, fair value		8,616			6,629
Fixed maturity securities, available-for-sale, fair value		12,533			13,381
Current maturities of mortgage and commercial loans receivable		2,212			700
Accounts receivable		163			-
Receivable from sale of Content Delivery business held in escrow		-			1,450
Advances receivable, net		10,230			-
Prepaid expenses and other current assets		1,750			1,419
Total current assets		50,169			56,571

Property and equipment, net		5			1
Deferred income taxes, net		475			975
Mortgage and commercial loans receivable, net of current maturities		5,281			2,305
Deposit on mortgage loan receivable held in escrow		-			1,400
Definite-lived intangibles, net		2,677			-
Goodwill		995			-
Other long-term assets, net		87			54
Total assets	$	59,689		$	61,306

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	564		$	1,289
Total current liabilities		564			1,289

Long-term liabilities:
Pension liability		3,647			3,766
Contingent consideration		1,860			-
Other long-term liabilities		225			185
Total liabilities		6,296			5,240

Commitments and contingencies

Stockholders' equity:
Shares of common stock, par value $0.01; 14,000,000 authorized; 8,789,644 and 9,117,077 issued and outstanding at March 31, 2019, and June 30, 2018, respectively		88			91
Capital in excess of par value		208,902			210,083
Non-controlling interest		758			-
Accumulated deficit		(151,599	)		(151,795	)
Accumulated other comprehensive loss		(4,756	)		(2,313	)
Total stockholders' equity		53,393			56,066
Total liabilities, non-controlling interest, and stockholders' equity	$	59,689		$	61,306

CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2019			2018			2019			2018
Revenues:
Merchant cash advance income	$	825		$	-		$	1,045		$	-
Interest income on loans		249			-			565			-
Total revenues		1,074			-			1,610			-
Operating expenses:
Sales and marketing		181			-			181			-
General and administrative		728			1,186			2,355			6,510
Amortization of purchased intangibles		53			-			53			-
Provision for credit losses on advances		343			-			838			-
Total operating expenses		1,305			1,186			3,427			6,510
Operating loss		(231	)		(1,186	)		(1,817	)		(6,510	)

Other interest income		1,053			225			2,788			371
Dividend income		165			-			275			-
Net realized gain on investments		525			-			726			-
Unrealized loss on equity securities, net		(181	)		-			(2,167	)		-
Other expense, net		(5	)		(109	)		(10	)		(67	)
Income (loss) from continuing operations before income taxes		1,326			(1,070	)		(205	)		(6,206	)

Benefit for income taxes		(75	)		(222	)		(73	)		(1,140	)

Income (loss) from continuing operations		1,401			(848	)		(132	)		(5,066	)

(Loss) income from discontinued operations, net of income taxes		-			(245	)		-			22,851

Net income (loss)		1,401			(1,093	)		(132	)		17,785

Less: Net loss attributable to non-controlling interest		10			-			10			-

Net income (loss) attributable to CCUR Holdings, Inc. stockholders	$	1,411		$	(1,093	)	$	(122	)	$	17,785
Basic and diluted earnings (loss) per share:
Continuing operations attributable to CCUR Holdings, Inc. stockholders	$	0.16		$	(0.09	)	$	(0.01	)	$	(0.53	)
Discontinued operations		-			(0.02	)		-			2.39
Net income (loss) attributable to CCUR Holdings, Inc. stockholders	$	0.16		$	(0.11	)	$	(0.01	)	$	1.86

Weighted average shares outstanding - basic		8,853,451			9,824,588			8,998,935			9,549,215
Weighted average shares outstanding - diluted		8,864,071			9,824,588			8,998,935			9,549,215

Cash dividends declared per common share	$	-		$	-		$	-		$	0.24

CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)

	Three Months Ended
	March 31, 2019			December 31, 2018
Revenues:
Merchant cash advance income	$	825		$	185
Interest income on loans		249			185
Total revenues		1,074			370
Operating expenses:
Sales and marketing		181			-
General and administrative		728			792
Amortization of purchased intangibles		53			-
Provision for credit losses on advances		343			495
Total operating expenses		1,305			1,287
Operating loss		(231	)		(917	)

Other interest income		1,053			890
Dividend income		165			46
Net realized gain on investments		525			-
Unrealized loss on equity securities, net		(181	)		(1,529	)
Other expense, net		(5	)		(20	)
Income (loss) before income taxes		1,326			(1,530	)

Benefit for income taxes		(75	)		-

Net income (loss)		1,401			(1,530	)


Less: Net loss attributable to non-controlling interest		10			-

Net income (loss) attributable to CCUR Holdings, Inc. stockholders	$	1,411		$	(1,530	)
Basic and diluted earnings (loss) per share:
Net income (loss) attributable to CCUR Holdings, Inc. stockholders	$	0.16		$	(0.17	)

Weighted average shares outstanding - basic		8,853,451			9,034,368
Weighted average shares outstanding - diluted		8,864,071			9,034,368