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Subsequent Event
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6 Months Ended |
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Jun. 30, 2014
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| Subsequent Events [Abstract] | |
| Subsequent Event |
Subsequent events
On July 31, 2014, the Company acquired by way of merger HCHC Holdings, Inc. ("HCHC"), the parent company of Highland Capital Brokerage, Inc. ("Highland"). Highland is a leading independent insurance brokerage that delivers life insurance, annuities and long-term care solutions to investment and insurance providers. Highland provides specialized point-of-sale support along with advanced marketing and creative estate and business planning techniques, delivering customized insurance solutions to both institutional clients and independent producers. Under the terms of the merger agreement, all shares of HCHC common stock were converted into the right to receive approximately $3,600 in cash and 2,540,762 shares of Company common stock, which are subject to certain transfer restrictions. Also, the Company caused all indebtedness owed by certain HCHC subsidiaries under a credit agreement (in the aggregate amount of $22,300) to be repaid. Approximately $7,000 of Highland's 10% promissory notes due February 26, 2019 remain outstanding. Accrued interest on the promissory notes is payable quarterly on the 15th of October, January, April and July. The promissory notes may be prepaid, except that if the promissory notes are prepaid in full prior to August 26, 2016, the holders of the promissory notes are entitled to receive the total amount of interest payable through August 26, 2016, less any interest already paid. Payment of the principal and all accrued and unpaid interest under the promissory notes may be accelerated upon the occurrence of customary events of default, including the failure to make payments when due and the commencement of bankruptcy or similar proceedings.
On August 8, 2014, the Company entered into a stock purchase agreement with KMS Financial Services, Inc. ("KMS"), and the shareholders of KMS, pursuant to which the Company has agreed to acquire all of the issued and outstanding capital stock of KMS. KMS is a Seattle-based independent broker-dealer and registered investment advisor with a strong presence in the Pacific Northwest. Under the terms of the transaction, the Company agreed to pay the KMS shareholders approximately $24,000, consisting of $11,000 in cash, $8,000 principal amount of the Company’s promissory notes and 1,440,922 shares of the Company’s common stock, which will be subject to certain transfer restrictions. The notes will be unsecured and will bear interest at a rate equal to the IRS applicable federal rate as of the closing date for mid-term obligations having quarterly payments (compounded quarterly) and are payable in 16 equal quarterly installments. The notes may be prepaid in full or in part at any time without premium or penalty. The holders may accelerate the notes upon certain typical events of default. The consummation of the transaction is subject to certain conditions, including, among others, those relating to the accuracy of the parties’ representations and warranties, the receipt of all required approvals and consents, including from FINRA and the NYSE MKT, and other customary closing conditions.
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