UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30~~December 31, 2020

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ______

Commission File Number: 001-37706

CCUR HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		04-2735766
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

6470 East Johns Crossing, Suite 490, Duluth, Georgia 30097

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (770) 305-6434

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer x		Smaller reporting company x
		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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

~~Yes~~Number ~~¨ No~~of shares of the Company’s common stock, par value x$0.01 per share, outstanding as of February 12, 2021 was 8,839,344.

Number of shares of the Company’s common stock, par value $0.01 per share, outstanding as of November 6, 2020 was 8,972,524.

CCUR Holdings, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended ~~September 30~~December 31, 2020

Table of Contents

		Page
	Part I – Financial Information
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Operations (Unaudited)	4
	Consolidated Statements of Comprehensive (Loss) Income (Unaudited)	5
	Consolidated Statements of Stockholders’ Equity (Unaudited)	6
	Consolidated Statements of Cash Flows (Unaudited)	78
	Notes to Consolidated Financial Statements (Unaudited)	89
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2427
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3036
Item 4.	Controls and Procedures	3036
	Part II – Other Information
Item 1.	Legal Proceedings	3037
Item 1A.	Risk Factors	3137
Item 6.	Exhibits	3541

Part I - Financial Information

Item 1.

Financial Statements

CCUR Holdings, Inc.

Consolidated Balance Sheets

(Amounts in thousands, except share and par value data)

	September 30, 2020			June 30, 2020
	December 31, 2020			June 30, 2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1816,~~285~~223		$	9,336
Equity securities, fair value		713,~~754~~269			7,372
Fixed maturity securities, available-for-sale, fair value		1412,~~784~~893			21,429
Current maturities of mortgage and commercial loans receivable		43,~~285~~634			3,878
Advances receivable, net		~~9,866~~111			11,436
Prepaid expenses and other current assets		~~1,148~~599			1,204
Total current assets		5646,~~122~~729			54,655
Land investment		3,596			3,568
Deferred income taxes, net		67,~~646~~691			6,632
Mortgage and commercial loans receivable, net of current maturities		~~101~~104			1,695
Definite-lived intangibles, net		1,~~773~~677			1,870
Goodwill		480			480
Other long-term assets, net		1,103			950
Equity method investment		3,850			-
Total assets	$	69,821		$	69,850
Other long-term assets, net		762			950
Total assets	$	64,889		$	69,850
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	~~898~~690		$	803
Management fee payable		32,~~059~~915			2,841
Total current liabilities		3,~~957~~605			3,644
Long-term liabilities:
Pension liability		4,~~192~~396			4,005
Other long-term liabilities		~~844~~628			912
Total liabilities		8,~~993~~629			8,561
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Stockholders' equity:
Shares of series preferred stock, par value $0.01; 1,250,000 authorized; none issued		-			-
Shares of class A preferred stock, par value $100; 20,000 authorized; none issued		-			-
Shares of common stock, par value $0.01; 14,000,000 authorized; 8,797,671 issued and outstanding at September 30, 2020, and June 30, 2020		88			88
Shares of common stock, par value $0.01; 14,000,000 authorized; 8,839,344 and 8,797,671 issued and outstanding at December 31, 2020, and June 30, 2020, respectively		88			88
Capital in excess of par value		209,~~283~~276			209,223
Non-controlling interest		1,~~224~~179			1,261
Accumulated deficit		(~~142~~150,~~674~~978	)		(143,077	)
Accumulated other comprehensive loss		(73,~~093~~305	)		(6,206	)
Total stockholders' equity		6056,~~828~~260			61,289
Total liabilities, non-controlling interest, and stockholders' equity	$	6964,~~821~~889		$	69,850

The accompanying notes are an integral ~~part~~ part of the consolidated financial statements.

CCUR Holdings, Inc.

Consolidated STATEMENTS OF OPERATIONS (Unaudited)

(Amounts in thousands, except share ~~and~~ and per share data)

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019
Revenues:
Merchant cash advance fees and other revenue	$	~~668~~1,046		$	1,~~448~~440		$	1,714		$	2,888
Interest on mortgage and commercial loans		~~242~~151			~~283~~347			393			630
Total revenues		~~910~~1,197			1,~~731~~787			2,107			3,518
Operating expenses:
Selling, general, and administrative		1,~~085~~202			1,~~334~~307			2,287			2,641
Amortization of purchased intangibles		9796			~~120~~119			193			239
Change in fair value of contingent consideration		-			10(410	)		-			(400	)
Provision for credit losses on advances		5213,775			~~216~~180			13,827			396
Total operating expenses		115,~~234~~073			1,~~680~~196			16,307			2,876
Operating (loss) income		(~~324~~13,876	)		51591			(14,200	)		642
Other interest income		~~1,360~~679			2,~~137~~145			2,039			4,282
Realized gain on investments, net		~~532~~876			~~1,076~~843			1,408			1,919
Unrealized (loss) gain on equity securities, net		(1,045	)		469
Unrealized gain (loss) on equity securities, net		2,285			(627	)		1,240			(158	)
Other income, net		7530			165			105			66
Income before income taxes		598			3,734
(Loss) income before income taxes and equity in net loss from equity method investment		(10,006	)		3,017			(9,408	)		6,751
Provision for income taxes		231			173
Equity in net loss from equity method investment		53			-			53			-
Net income		367			3,561
(Benefit) provision for income taxes		(1,725	)		(17	)		(1,494	)		156
Less: Net loss (income) attributable to non-controlling interest		22			(155	)
Net (loss) income		(8,334	)		3,034			(7,967	)		6,595
					.
Less: Net loss (income) attributable to non-controlling interest		1			(297	)		23			(452	)
Net income attributable to CCUR Holdings, Inc. stockholders	$	389		$	3,406
											.
Earnings per share attributable to CCUR Holdings, Inc. stockholders:
Net (loss) income attributable to CCUR Holdings, Inc. stockholders	$	(8,333	)	$	2,737		$	(7,944	)	$	6,143
Basic	$	0.04		$	0.39
(Loss) earnings per share attributable to CCUR Holdings, Inc. stockholders:
Diluted	$	0.04		$	0.39
Basic	$	(0.95	)	$	0.31		$	(0.90	)	$	0.70
Weighted average shares outstanding - basic		8,797,671			8,756,156
Diluted	$	(0.95	)	$	0.31		$	(0.90	)	$	0.70
Weighted average shares outstanding - diluted		8,856,691			8,809,572
Weighted average shares outstanding - basic		8,800,171			8,758,710			8,798,928			8,757,433
Weighted average shares outstanding - diluted		8,800,171			8,840,870			8,798,928			8,825,583

The accompanying notes are an integral part of the consolidated financial statements.

ccur holdings, inc.

Consolidated STATEMENTS OF COMPREHENSIVE (~~loss~~LOSS) INCOME (Unaudited)

(Amounts in thousands)

	Three Months Ended September 30,
	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019
Net income	$	367		$	3,561
Net (loss) income	$	(8,334	)	$	3,034		$	(7,967	)	$	6,595
Other comprehensive (loss) income:
Net unrealized loss on available for sale investments, net of tax		(728	)		(171	)
Net unrealized gain (loss) on available for sale investments, net of tax		3,964			(1,438	)		3,236			(1,609	)
Foreign currency translation adjustment		(~~114~~127	)		98(42	)		(241	)		56
Pension and post-retirement benefits		(4549	)		90(46	)		(94	)		44
Other comprehensive (loss) income:		(887	)		17
Other comprehensive income (loss):		3,788			(1,526	)		2,901			(1,509	)
Comprehensive (loss) income		(~~520~~4,546	)		31,~~578~~508			(5,066	)		5,086
Comprehensive loss (income) attributable to non-controlling interest		221			(~~155~~297	)		23			(452	)
Comprehensive (loss) income attributable to CCUR Holdings, Inc. stockholders	$	(~~498~~4,545	)	$	31,~~423~~211		$	(5,043	)	$	4,634

The accompanying notes are an integral part of the consolidated financial statements

ccur holdings, inc.

Consolidated STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(Amounts in thousands, except share data)

	Three Months Ended September 30, 2020
	Three Months Ended December 31, 2020
											Accumulated
	Common Stock				Capital In						Other			Non-
			Par		Excess Of			Accumulated			Comprehensive			Controlling
	Shares		Value		Par Value			Deficit			Income (Loss)			Interest			Total
Balance at June 30, 2020		8,797,671	$	88	$	209,223		$	(143,077	)	$	(6,206	)	$	1,261		$	61,289
Share-based compensation expense						126												126
Forfeitures of restricted stock						(66	)											(66	)
Dividends forfeited with restricted stock forfeitures									14									14
Distributions to non-controlling interest															(15	)		(15	)
Other comprehensive loss, net of taxes:
Net income (loss)									389						(22	)		367
Unrealized loss on available-for-sale investments												(728	)					(728	)
Foreign currency translation adjustment												(114	)					(114	)
Pension plan												(45	)					(45	)
Total comprehensive loss																		(520	)
Balance at September 30, 2020		8,797,671	$	88	$	209,283		$	(142,674	)	$	(7,093	)	$	1,224		$	60,828
Share-based compensation expense						166												166
Lapse of restrictions on restricted stock		41,673																-
Forfeitures of restricted stock						(161	)											(161	)
Forfeitures of stock options						(12	)											(12	)
Dividends forfeited with restricted stock forfeitures									29									29
Distributions to non-controlling interest															(44	)		(44	)
Other comprehensive (loss) income, net of taxes:
Net loss									(8,333	)					(1	)		(8,334	)
Unrealized gain on available-for-sale investments												3,964						3,964
Foreign currency translation adjustment												(127	)					(127	)
Pension plan												(49	)					(49	)
Total comprehensive loss																		(4,546	)
Balance at December 31, 2020		8,839,344	$	88	$	209,276		$	(150,978	)	$	(3,305	)	$	1,179		$	56,260

	Three Months Ended September 30, 2019
	Three Months Ended December 31, 2019
										Accumulated
	Common Stock				Capital In					Other			Non-
			Par		Excess Of		Accumulated			Comprehensive			Controlling
	Shares		Value		Par Value		Deficit			Income (Loss)			Interest		Total
Balance at June 30, 2019		8,756,156	$	87	$	208,881	$	(150,795	)	$	(6,579	)	$	762	$	52,356
Share-based compensation expense						99										99
Other comprehensive income, net of taxes:
Net income								3,406						155		3,561
Unrealized loss on available-for-sale investments											(171	)				(171	)
Foreign currency translation adjustment											98					98
Pension plan											90					90
Total comprehensive income																3,578
Balance at September 30, 2019		8,756,156	$	87	$	208,980	$	(147,389	)	$	(6,562	)	$	917	$	56,033
Share-based compensation expense						96										96
Lapse of restrictions on restricted stock		5,000														-
Other comprehensive income, net of taxes:
Net income								2,737						297		3,034
Unrealized loss on available-for-sale investments											(1,438	)				(1,438	)
Foreign currency translation adjustment											(42	)				(42	)
Pension plan											(46	)				(46	)
Total comprehensive income																1,508
Balance at December 31, 2019		8,761,156	$	87	$	209,076	$	(144,652	)	$	(8,088	)	$	1,214	$	57,637

The accompanying notes are an integral part of the consolidated financial statements.

ccur holdings, inc.

~~CONSOLIDATED~~Consolidated STATEMENTS OF ~~CASH~~STOCKHOLDERS’ ~~FLOWS~~EQUITY (Unaudited)

(Amounts in thousands, except share data)

	Three Months Ended September 30,
	Six Months Ended December 31, 2020
	2020			2019
													Accumulated
Cash flows provided by operating activities:
	Common Stock						Capital In						Other			Non-
Net income	$	367		$	3,561
				Par			Excess Of			Accumulated			Comprehensive			Controlling
Adjustments to reconcile net income to net cash provided by operating activities:
	Shares			Value			Par Value			Deficit			Income (Loss)			Interest			Total
Depreciation and amortization		102			121
Balance at June 30, 2020		8,797,671		$	88		$	209,223		$	(143,077	)	$	(6,206	)	$	1,261		$	61,289
Share-based compensation		60			99
Share-based compensation expense								292												292
Provision for credit losses on advances		52			216
Lapse of restrictions on restricted stock		41,673																		-
Deferred taxes		202			-
Forfeitures of restricted stock								(227	)											(227	)
Non-cash accretion of interest income		(604	)		(1,176	)
Forfeitures of stock options								(12	)											(12	)
Payment-in-kind interest income		(256	)		(244	)
Dividends forfeited with restricted stock forfeitures											43									43
Realized gain on investments, net		(532	)		(1,076	)
Distributions to non-controlling interest																	(59	)		(59	)
Unrealized gain (loss) on investments, net		1,045			(470	)
Other comprehensive (loss) income, net of taxes:
Change in fair value of contingent consideration		-			10
Net loss											(7,944	)					(23	)		(7,967	)
Non-cash effect of exchange rates on FMV		17			-
Unrealized gain on available-for-sale investments														3,236						3,236
(Increase) decrease in assets:
Foreign currency translation adjustment														(241	)					(241	)
Prepaid expenses and other current assets		(271	)		(564	)
Pension plan														(94	)					(94	)
Other long-term assets		43			10
Total comprehensive loss																				(5,066	)
Increase (decrease) in liabilities:
Balance at December 31, 2020		8,839,344		$	88		$	209,276		$	(150,978	)	$	(3,305	)	$	1,179		$	56,260
Accounts payable and accrued expenses		319			45
Pension and other long-term liabilities		(28	)		5
Net cash provided by operating activities		516			537
Cash flows provided by investing activities:
Origination and fundings of mortgage and commercial loans receivable		(1,420	)		(2,750	)
Collections of mortgage and commercial loans receivable		2,634			769
Fundings of cash advances receivable		(4,700	)		(6,189	)
Collections of cash advances receivable		6,533			7,756
Proceeds from sale or maturity of securities		7,016			2,202
Purchases of securities		(1,357	)		(1,385	)
Other investing cash flows		(236	)		(266	)
Net cash provided by investing activities		8,470			137
Cash flows used in financing activities:
Member distributions		(15	)		-
Net cash used in financing activities		(15	)		-
Effect of exchange rates on cash and cash equivalents		(22	)		10
Increase in cash and cash equivalents		8,949			684
Cash and cash equivalents - beginning of year		9,336			8,083
Cash and cash equivalents - end of period	$	18,285		$	8,767
Cash paid during the period for:
Interest	$	-		$	21
Income taxes, net of refunds	$	51		$	85

The accompanying notes are an integral part of the consolidated financial statements.

	Six Months Ended December 31, 2019
										Accumulated
	Common Stock				Capital In					Other			Non-
			Par		Excess Of		Accumulated			Comprehensive			Controlling
	Shares		Value		Par Value		Deficit			Income (Loss)			Interest		Total
Balance at June 30, 2019		8,756,156	$	87	$	208,881	$	(150,795	)	$	(6,579	)	$	762	$	52,356
Share-based compensation expense						195										195
Lapse of restrictions on restricted stock		5,000														-
Other comprehensive income, net of taxes:
Net income								6,143						452		6,595
Unrealized loss on available-for-sale investments											(1,609	)				(1,609	)
Foreign currency translation adjustment											56					56
Pension plan											44					44
Total comprehensive income																5,086
Balance at December 31, 2019		8,761,156	$	87	$	209,076	$	(144,652	)	$	(8,088	)	$	1,214	$	57,637

7The accompanying notes are an integral part of the consolidated financial statements.

~~CCUR HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ 7

1.ccur holdings, ~~Overview of the Business and Basis of Presentation~~inc.

~~References herein to “CCUR Holdings,”~~CONSOLIDATED ~~the~~STATEMENTS ~~“Company,”~~OF ~~“we,”~~CASH ~~“us,”~~FLOWS ~~or “our” refer to CCUR Holdings, Inc. and its subsidiaries on a consolidated basis, unless the context specifically indicates otherwise.~~(Unaudited)

We(Amounts ~~are a holding company owning and seeking to own subsidiaries engaged~~ in a variety of business operations. Following the disposition of our legacy operating businesses in calendar year 2017, we began identifying business alternatives to redeploy the proceeds of such divestitures. As of September 30, 2020, we had two existing operating segments: (ithousands) merchant cash advances (“MCA”) and other financial services operations, conducted primarily through our subsidiary LM Capital Solutions, LLC (d/b/a “LuxeMark Capital”) (“LMCS”), and (ii) real estate operations, conducted through our subsidiary Recur Holdings LLC (“Recur”) and its subsidiaries.

As of September 30, 2020, we hold a 51% interest in LMCS, with the remaining 49% held by AZOKKB, LLC (formerly named LuxeMark Capital, LLC and herein referenced as “Old LuxeMark”). Through LMCS, we manage a network of MCA funders (“Funders”) and syndicate participants who provide those Funders with capital by purchasing participation interests in or co-funding MCA transactions. In addition, we provide loans to Funders, the proceeds of which are used by the Funders to fund MCAs. LMCS’ daily operations are led by the three principals of Old LuxeMark. CCUR provides operational, accounting, and legal support to LMCS. On July 17, 2020, LMCS entered into a series of transactions resulting in its recapitalization. The transactions included an amendment to LMCS’ operating agreement that reduced our ownership from 80% to 51% of LMCS and the grant by us to LMCS’ non-controlling member of a right to purchase our remaining equity interests in LMCS upon the occurrence of certain conditions, including, without limitation, the repayment of an intercompany note from us to LMCS. The transactions also included (i) the waiver of LMCS’ obligations to pay contingent consideration to the non-controlling member, (ii) the termination of certain warrants to purchase our capital stock held by certain affiliates of the non-controlling member, (iii) the assignment of certain contractual rights of LMCS to the non-controlling member, and (iv) the amendment of an intercompany note from us to LMCS. All conditions required for the non-controlling member to have the right to repurchase LMCS have been met as of the filing date of this report, with the exception of the repayment of the intercompany note. We are reviewing our strategic options with respect to continued participation in the MCA industry.

	Six Months Ended December 31,
	2020			2019

Cash flows (used in) provided by operating activities:
Net (loss) income	$	(7,967	)	$	6,595
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		204			242
Share-based compensation expense, net of forfeitures		53			195
Provision for credit losses on advances		13,827			396
Deferred taxes		(1,999	)		238
Non-cash accretion of interest income		(915	)		(2,366	)
Payment-in-kind interest income		(265	)		(483	)
Realized gain on investments, net		(1,408	)		(1,919	)
Unrealized (gain) loss on investments, net		(1,240	)		158
Change in fair value of contingent consideration		-			(400	)
Equity in net loss from unconsolidated investment		53			-
Foreign exchange transaction losses		17			-
(Increase) decrease in assets:
Prepaid expenses and other current assets		(636	)		(829	)
Other long-term assets		390			43
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		(24	)		226
Pension and other long-term liabilities		(186	)		(16	)
Net cash (used in) provided by operating activities		(96	)		2,080

Cash flows provided by investing activities:
Origination and fundings of mortgage and commercial loans receivable		(2,432	)		(2,750	)
Collections of mortgage and commercial loans receivable		4,282			2,554
Fundings of cash advances receivable		(7,860	)		(14,829	)
Collections of cash advances receivable		6,583			14,823
Investment in operating business		(195	)		-
Investment in equity affiliate		(3,903	)		-
Proceeds from sale or maturity of securities		18,234			3,893
Purchases of securities		(7,609	)		(1,509	)
Other investing cash flows		(28	)		(289	)
Net cash provided by investing activities		7,072			1,893

Cash flows used in financing activities:
Dividends paid		(2	)		(1	)
Member distributions		(59	)		-
Net cash used in financing activities		(61	)		(1	)

Effect of exchange rates on cash and cash equivalents		(28	)		(12	)

Increase in cash and cash equivalents		6,887			3,960
Cash and cash equivalents - beginning of year		9,336			8,083
Cash and cash equivalents - end of period	$	16,223		$	12,043

Cash paid during the period for:
Interest	$	-		$	40
Income taxes, net of refunds	$	51		$	205

~~Recur~~The ~~provides~~accompanying ~~commercial~~notes ~~loans~~are toan ~~local, regional,~~integral ~~and national builders, developers, and commercial landowners and also acquires, owns, and manages a portfolio~~ part of ~~real property~~the ~~for~~consolidated ~~development.~~financial ~~Recur does not provide consumer mortgages~~statements.

The global outbreak of the novel coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization and a national emergency by the U.S. government in March 2020 and has negatively impacted the U.S. and global economy, disrupted global supply chains, resulted in significant travel and transport restrictions, including mandated closures and orders to “shelter-in-place,” and created significant disruption of the financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic and related actions taken by the U.S. government, state and local government officials, and international governments to prevent disease spread, all of which are uncertain and cannot be predicted.8

~~The~~CCUR unaudited consolidated financial statements included herein have been prepared by the Company in conformity with the instructions to Form 10-Q and Article 8 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to applicable rules and regulations. In the opinion of managementHOLDINGS, ~~all adjustments of a normal recurring nature which were considered necessary for a fair presentation have been included~~ INC. ~~The year-end consolidated balance sheet data as of June 30, 2020 was derived from our~~ ~~audited~~NOTES ~~consolidated~~TO ~~financial~~CONSOLIDATED ~~statements.~~FINANCIAL The results of operations for the three months ended September 30, 2020 are not necessarily indicative of the results to be expected for the entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the SEC on September 15, 2020.STATEMENTS

We1. ~~meet~~Overview ~~the SEC’s definition~~ of a the ~~“Smaller~~Business ~~Reporting Company,”~~ and ~~therefore~~Basis ~~qualify~~of for the SEC’s reduced disclosure requirements for smaller reporting companies. The significant accounting policies used in preparing these consolidated financial statements are consistent with the accounting policies described in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, except for those as described below.Presentation

8References herein to “CCUR Holdings,” the “Company,” “we,” “us,” or “our” refer to CCUR Holdings, Inc. and its subsidiaries on a consolidated basis, unless the context specifically indicates otherwise.

~~CCUR~~We are a holding company owning and seeking ~~HOLDINGS~~to own subsidiaries engaged in a variety of business operations. Following the disposition of our legacy operating businesses in calendar year 2017, ~~INC~~we began identifying business alternatives to redeploy the proceeds of such divestitures. As of December 31, ~~NOTES~~2020, TOwe ~~CONSOLIDATED~~had ~~FINANCIAL~~two ~~STATEMENTS~~existing operating segments: (i) merchant cash advances (“MCA”) and other financial services operations, conducted primarily through our subsidiary LM Capital Solutions, LLC (d/b/a “LuxeMark Capital”) (“LMCS”), and (ii) real estate operations, conducted through our subsidiary Recur Holdings LLC (“Recur”) and its subsidiaries.

~~Commercial~~As of December 31, 2020, we hold a 51% interest in LMCS, with the remaining 49% held by AZOKKB, LLC (formerly named LuxeMark Capital, LLC and ~~Mortgage~~herein ~~Loans~~referenced as “Old LuxeMark”). Through LMCS, we manage a network of MCA funders (“Funders”) and ~~Loan~~syndicate ~~Losses~~participants who provide those Funders with capital by purchasing participation interests in or co-funding MCA transactions. In addition, we provide loans to Funders, the proceeds of which are used by the Funders to fund MCAs. LMCS’ daily operations are led by the three principals of Old LuxeMark. CCUR provides operational, accounting, and legal support to LMCS. On July 17, 2020, LMCS entered into a series of transactions resulting in its recapitalization. The transactions included an amendment to LMCS’ operating agreement that reduced our ownership from 80% to 51% of LMCS and the grant by us to LMCS’ non-controlling member of a right to purchase our remaining equity interests in LMCS upon the occurrence of certain conditions, including, without limitation, the repayment of an intercompany note from us to LMCS. The transactions also included (i) the waiver of LMCS’ obligations to pay contingent consideration to the non-controlling member, (ii) the termination of certain warrants to purchase our capital stock held by certain affiliates of the non-controlling member, (iii) the assignment of certain contractual rights of LMCS to the non-controlling member, and (iv) the amendment of an intercompany note from us to LMCS. All conditions required for the non-controlling member to have the right to repurchase LMCS have been met as of the filing date of this report, with the exception of the repayment of the intercompany note. We are reviewing our strategic options with respect to continued participation in the MCA industry.

WeRecur ~~have~~provides ~~potential exposure~~commercial loans to ~~transaction~~local, regional, ~~losses~~and asnational abuilders, ~~result~~developers, ofand ~~uncollectibility of~~ commercial ~~mortgage~~landowners and ~~other~~also ~~loans.~~acquires, Weowns, ~~base our reserve estimates on prior charge-off history~~ and ~~currently~~manages ~~available~~a ~~information~~portfolio ~~that is indicative~~ of ~~a transaction loss. We reflect additions~~real toproperty ~~the~~for ~~reserve in current operating results, while we make charges to the reserve when we incur losses~~development. WeRecur ~~reflect~~does ~~recoveries in~~not ~~the~~provide ~~reserve~~consumer ~~for transaction losses as collected~~mortgages.

WeThe ~~have~~global outbreak of the novel coronavirus ~~intent~~(“COVID-19”) was declared a pandemic by the World Health Organization and ~~ability~~a tonational ~~hold~~emergency ~~these~~by ~~loans~~the toU.S. ~~maturity~~government in orMarch 2020 ~~payoff~~and has negatively impacted the U.S. and global economy, disrupted global supply chains, resulted in significant travel and astransport ~~such~~restrictions, ~~have~~including ~~classified~~mandated ~~these~~closures ~~loans~~and asorders ~~held~~to “shelter-~~for~~in-~~investment. These~~place,” ~~loans~~and ~~are~~created ~~reported~~significant disruption onof the ~~balance~~financial ~~sheet~~markets. atThe extent of the ~~outstanding~~impact ~~principal~~of ~~balance~~the ~~adjusted~~COVID-19 ~~for~~pandemic ~~any~~on ~~charge-offs,~~our ~~allowance~~operational ~~for~~and financial performance ~~loan~~will ~~losses~~depend on future developments, including the duration and ~~deferred~~spread ~~fees~~of orthe ~~costs.~~pandemic Asand ofrelated ~~September~~actions ~~30,~~taken ~~2020,~~by wethe ~~have~~U.S. ~~not~~government, state ~~recorded~~and ~~any~~local ~~charge-offs~~government officials, and ~~believe~~international ~~that~~governments anto ~~allowance for~~prevent ~~loan~~disease ~~losses~~spread, isall ~~not~~of ~~required~~which are uncertain and cannot be predicted.

~~Land~~The ~~Investment~~unaudited consolidated financial statements included herein have been prepared by the Company in conformity with the instructions to Form 10-Q and Article 8 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to applicable rules and regulations. In the opinion of management, all adjustments of a normal recurring nature which were considered necessary for a fair presentation have been included. The year-end consolidated balance sheet data as of June 30, 2020 was derived from our audited consolidated financial statements. The results of operations for the three and six months ended December 31, 2020 are not necessarily indicative of the results to be expected for the entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 filed with the SEC on September 15, 2020.

Land investment assets are stated at acquired cost. Pre-acquisition and development costs are capitalized. Gains and losses resulting from the disposition of real estate are included in operations. As of September 30, 2020, all land held by the Company is considered to be held for use and development.9

~~Basic~~CCUR HOLDINGS, INC. ~~and~~NOTES ~~Diluted~~TO ~~Earnings~~CONSOLIDATED ~~per~~FINANCIAL ~~Share~~STATEMENTS

~~Basic~~We ~~earnings per~~meet ~~share is computed by dividing net income by~~ the ~~weighted-average~~SEC’s ~~number~~definition of ~~common shares outstanding during each fiscal period.~~a ~~Diluted~~ ~~earnings~~“Smaller ~~per~~Reporting ~~share~~Company,” isand ~~computed~~therefore byqualify ~~dividing~~for ~~net income by~~ the ~~weighted-average~~SEC’s ~~number~~reduced ofdisclosure ~~common~~requirements ~~shares~~for ~~outstanding during~~smaller ~~each~~reporting ~~fiscal~~companies. ~~period~~The ~~including~~significant ~~dilutive~~accounting ~~common~~policies ~~share~~used ~~equivalents.~~in ~~Under~~preparing ~~the~~these ~~treasury~~consolidated ~~stock~~financial ~~method,~~statements ~~incremental~~are ~~shares representing~~consistent ~~the~~with ~~number of additional common shares that would have been outstanding if~~ the ~~dilutive~~accounting ~~potential~~policies ~~common~~described ~~shares~~in ~~had~~our ~~been~~Annual ~~issued are~~Report ~~included~~on ~~in the computation. Weighted~~Form 10-~~average~~K ~~common share equivalents of 11,680 and 9,757~~ for the ~~three~~fiscal ~~months~~year ended ~~September~~ June 30, 2020 ~~and 2019~~, ~~respectively,~~except for ~~were~~those ~~excluded from the calculation,~~ as ~~their~~described ~~effect would have been anti-dilutive~~below.

~~The~~Principles ~~following table presents a reconciliation~~ of ~~the~~Consolidation ~~numerators~~ and ~~denominators of basic and diluted net income per share for the periods indicated:~~Reclassifications

	Three Months Ended September 30,
	2020		2019
Basic weighted-average number of shares outstanding		8,797,671		8,756,156
Effect of dilutive securities:
Restricted stock		59,020		53,416
Diluted weighted-average number of shares outstanding		8,856,691		8,809,572

The consolidated financial statements include the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain prior period amounts were reclassified to conform to the current period presentation. These reclassifications did not affect total revenues, costs and expenses, net income, assets, liabilities, stockholders’ deficit, or net operating, investing, or financing cash flows.

~~Fair~~Commercial ~~Value~~and Mortgage Loans and Loan ~~Measurements~~Losses

~~Fair~~We ~~value is~~have ~~defined~~potential asexposure ~~the~~to ~~price~~transaction losses ~~that~~as ~~would~~a beresult ~~received~~of ~~from~~uncollectibility ~~selling~~of ancommercial ~~asset~~mortgage orand ~~paid~~other toloans. ~~transfer~~We abase ~~liability~~our inreserve anestimates ~~orderly~~on ~~fashion~~prior ~~between~~charge-off ~~market~~history ~~participants~~and atcurrently ~~the~~available ~~measurement~~information ~~date.~~that ~~When~~is ~~determining~~indicative ~~the~~of ~~fair~~a ~~value~~transaction ~~measurements~~loss. ~~for~~We ~~assets~~reflect ~~and~~additions ~~liabilities required or permitted~~ to bethe ~~either~~reserve ~~recorded~~in orcurrent operating ~~disclosed~~results, atwhile ~~fair~~we ~~value,~~make wecharges ~~consider~~to the ~~most~~reserve ~~advantageous~~when ~~market in which transactions would occur and~~ we ~~consider~~incur ~~assumptions~~losses. ~~that~~We ~~market~~reflect ~~participants~~recoveries ~~would~~in ~~use~~the ~~when~~reserve ~~pricing~~for ~~the~~transaction losses ~~asset~~as ~~or liability~~collected.

9We have the intent and ability to hold these loans to maturity or payoff, and as such, have classified these loans as held-for-investment. These loans are reported on the balance sheet at the outstanding principal balance adjusted for any charge-offs, allowance for loan losses, and deferred fees or costs. As of December 31, 2020, we have not recorded any charge-offs, and believe that an allowance for loan losses is not required.

~~CCUR~~Land ~~HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ Investment

~~Accounting Standards~~Land ~~Update~~investment ~~(“ASU”)~~assets ~~2018-13,~~are ~~Fair~~stated ~~Value~~at ~~Measurement (Accounting Standards Codification (“ASC”) 820):~~acquired ~~Disclosure~~cost. ~~Framework~~Pre-acquisition ~~Changes to the Disclosure Requirements for Fair Value Measurement, requires certain disclosures regarding fair value~~ and ~~establishes~~development acosts ~~fair~~are ~~value hierarchy for valuation inputs~~capitalized. ~~The~~Gains ~~hierarchy~~and ~~prioritizes~~losses ~~the~~resulting ~~inputs~~from ~~into three levels based on~~ the ~~extent~~disposition toof ~~which~~real ~~inputs~~estate ~~used in measuring fair value~~ are included ~~observable~~ in ~~the market~~operations. ~~Each~~As ~~fair value measurement is reported in one~~ of ~~the~~December 31, ~~three levels~~2020, ~~which~~all ~~are~~land ~~determined~~held by the ~~lowest~~Company ~~level input that~~ is ~~significant~~considered to ~~the~~be ~~fair~~held ~~value~~for ~~measurement in~~use ~~its~~and ~~entirety~~development. ~~The levels are:~~

·Equity Method ~~Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities;~~Investments

·Investments ~~Level~~in 2unconsolidated ~~Inputs~~entities over ~~other~~which ~~than~~we ~~quoted~~have ~~prices~~significant ~~included~~influence are accounted for under the equity method of accounting. Under the equity method of accounting, the Company does not consolidate the investment’s financial statements within ~~Level~~its 1consolidated ~~that~~financial statements. Equity method investments are ~~either~~initially ~~directly~~recorded at cost, then our proportional share of the underlying net income or ~~indirectly~~loss ~~observable;~~is recorded as equity in net loss from equity method investments in our statement of operations, with a corresponding increase or decrease to the carrying value of the investment. Distributions received from the investee reduce our carrying value of the investment and are recorded in the consolidated statements of cash flows using the cumulative earnings approach. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. There were no indicators of impairment related to our equity method investments for the three and six months ended December 31, 2020.

·Basic ~~Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs~~ and ~~which~~Diluted ~~include~~Earnings ~~the~~per ~~use of management estimates.~~Share

~~Our~~Basic ~~investment portfolio~~earnings ~~consists~~per ofshare ~~money~~is ~~market~~computed ~~funds,~~by dividing ~~equity~~net ~~securities,~~income ~~commercial~~by ~~mortgage~~the ~~loans,~~weighted-average ~~and~~number ~~corporate debt. All highly liquid investments with original maturities~~ of ~~three~~common ~~months~~shares oroutstanding ~~less~~during ~~when~~each ~~purchased~~fiscal ~~are considered to be cash equivalents~~period. ~~All~~Diluted ~~cash~~earnings ~~equivalents~~per ~~are~~share ~~carried~~is atcomputed ~~cost~~by ~~less~~dividing ~~any~~net ~~unamortized~~income ~~premium~~by orthe ~~discount,~~weighted-average ~~which~~number ~~approximates~~of ~~fair~~common ~~value.~~shares ~~All~~outstanding ~~investments~~during ~~with~~each ~~original~~fiscal ~~maturities~~period ofincluding ~~more~~dilutive ~~than~~common ~~three~~share ~~months~~equivalents. ~~when~~Under ~~purchased~~the ~~are~~treasury ~~classified~~stock ~~as available-for-sale~~method, ~~trading,~~incremental orshares ~~held-to-maturity~~representing ~~investments.~~the ~~Our~~number ~~marketable~~of additional ~~securities,~~common ~~other~~shares ~~than~~that ~~equity~~would ~~securities,~~have ~~are~~been ~~classified~~outstanding asif ~~available-for-sale,~~the ~~and~~dilutive ~~are~~potential ~~reported~~common atshares ~~fair~~had ~~value,~~been ~~with~~issued ~~unrealized gains~~are ~~and~~included ~~losses, net of tax, reported~~ in the ~~accompanying~~computation. Weighted-average ~~consolidated~~common ~~balance~~share ~~sheets~~equivalents ~~in stockholders’ equity as a component~~ of ~~accumulated~~8,179 ~~other~~and ~~comprehensive~~7,598 ~~income~~for orthe ~~loss.~~three ~~Interest~~months onended ~~securities~~December 31, is2020 ~~reported~~and in2019, ~~the accompanying consolidated statements~~respectively, ofand ~~operations~~10,021 inand ~~interest~~8,644 ~~income.~~for ~~Dividends paid by securities are reported in~~ the ~~accompanying~~six ~~consolidated~~months ~~statements~~ended ofDecember 31, ~~operations in~~2020 ~~other~~and ~~income.~~2019, ~~Realized~~respectively, ~~gains~~were orexcluded ~~losses~~from ~~are reported in~~ the ~~accompanying~~calculation, as ~~consolidated~~their ~~statements~~effect ofwould ~~operations~~have inbeen ~~net realized gain on investments~~anti-dilutive.

We used Level 3 inputs to determine the fair value of our preferred stock investments. The Company has elected the measurement alternative and will record the investments at cost adjusted for observable price changes for an identical or similar investment of the same issuer. Observable price changes and impairment indicators will be assessed each reporting period.10

WeCCUR provide fair value measurement disclosures of our available-for-sale securities in accordance with one of the three levels of fair value measurement. Our financial assets and liabilities that were measured at fair value on a recurring basis as of September 30HOLDINGS, ~~2020 and June 30, 2020 are as follows:~~ INC.

	As of September 30, 2020 Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(Amounts in thousands)
Cash	$	14,234	$	14,234	$	-	$	-
Money market funds		4,051		4,051		-		-
Cash and cash equivalents	$	18,285	$	18,285	$	-	$	-
Common stock and common stock options	$	4,871	$	4,871	$	-	$	-
Preferred stock		2,883		-		-		2,883
Equity investments	$	7,754	$	4,871	$	-	$	2,883
Corporate debt	$	14,784	$	-	$	14,784	$	-
Available-for-sale investments	$	14,784	$	-	$	14,784	$	-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10The following table presents a reconciliation of the numerators and denominators of basic and diluted net income per share for the periods indicated:

CCUR HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2020		2019		2020		2019
Basic weighted-average number of shares outstanding		8,800,171		8,758,710		8,798,928		8,757,433
Effect of dilutive securities:
Restricted stock		-		82,160		-		68,150
Diluted weighted-average number of shares outstanding		8,800,171		8,840,870		8,798,928		8,825,583

	As of June 30, 2020 Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
	(Amounts in thousands)
Cash	$	4,473	$	4,473	$	-	$	-
Money market funds		4,863		4,863		-		-
Cash and cash equivalents	$	9,336	$	9,336	$	-	$	-
Common stock and common stock options	$	4,489	$	4,489	$	-	$	-
Preferred stock		2,883		-		-		2,883
Equity investments	$	7,372	$	4,489	$	-	$	2,883
Corporate debt	$	21,429	$	-	$	21,429	$	-
Available-for-sale investments	$	21,429	$	-	$	21,429	$	-

Fair Value Measurements

~~The~~Fair ~~carrying amounts~~value ofis ~~certain~~defined ~~financial~~as ~~instruments,~~the ~~including~~price ~~cash~~that would ~~equivalents,~~be ~~MCAs,~~received ~~and~~from ~~other~~selling ~~advances,~~an ~~approximate~~asset ~~their~~or ~~fair~~paid ~~values due~~ to ~~their~~transfer ~~short-term~~a ~~nature.~~liability ~~Included~~ in ~~available-for-sale~~an ~~securities~~orderly isfashion abetween ~~loan~~market ~~which~~participants weat ~~purchased from~~ the ~~syndicated loan~~ ~~market~~measurement date. ~~Quotations~~When ~~are~~determining ~~available for this security on~~ the ~~syndicated loan market. The~~ fair value ofmeasurements ~~our~~for ~~syndicated~~assets ~~portion~~and ~~of this~~liabilities ~~loan~~required isor ~~$3,780,000~~permitted ~~and~~to ~~$3,240,000~~be aseither ofrecorded or ~~September~~disclosed ~~30,~~at ~~2020~~fair ~~and June 30~~value, ~~2020,~~we ~~respectively.~~consider ~~The~~the ~~Company’s~~most ~~assets~~advantageous ~~and obligations~~market ~~measured~~in atwhich ~~fair~~transactions ~~value~~would ~~using~~occur ~~Level~~and 3we ~~inputs~~consider ~~were~~assumptions that ~~valued~~market atparticipants ~~$2,883,000~~would asuse ofwhen ~~September~~pricing ~~30,~~the ~~2020~~asset ~~and~~or ~~June 30, 2020~~liability.

~~The~~Accounting ~~following~~Standards ~~table~~Update ~~shows~~(“ASU”) 2018-13, ~~the~~Fair ~~valuation~~Value Measurement (Accounting Standards Codification (“ASC”) 820): Disclosure Framework Changes to ~~methodology~~the Disclosure Requirements for Fair Value Measurement, requires certain disclosures regarding fair value and ~~unobservable~~establishes ~~inputs~~a fair value hierarchy for ~~Level~~valuation 3inputs. ~~assets~~The ~~and~~hierarchy ~~liabilities~~prioritizes ~~measured~~the atinputs into three levels based on the extent to which inputs used in measuring fair value onare aobservable ~~recurring~~in ~~basis~~the asmarket. Each fair value measurement is reported in one of ~~both~~the ~~September 30~~three levels, which ~~2020~~are ~~and~~determined ~~June~~by ~~30,~~the ~~2020~~lowest ($level ~~amounts~~input that is significant to the fair value measurement in ~~thousands)~~its entirety. The levels are:

	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
Equity securities, fair value
Preferred stock	$	2,883	cost, or observable price changes	not applicable	not applicable

Level 1

Quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2. ~~Recent~~Inputs ~~Accounting~~other ~~Guidance~~than quoted prices included within Level 1 that are either directly or indirectly observable; and

~~Recently Issued~~· Level 3 Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and ~~Adopted~~which ~~Accounting~~include ~~Guidance~~the use of management estimates.

~~In February~~Our ~~2018,~~investment ~~the~~portfolio ~~Financial~~consists ~~Accounting~~of ~~Standards~~money market ~~Board~~funds, ~~(the~~equity ~~“FASB”)~~securities, ~~issued~~commercial ~~ASU~~mortgage ~~No. 2018-02~~loans, ~~Reclassification~~and ~~of Certain~~corporate ~~Tax~~debt. ~~Effects~~All ~~from~~highly ~~Accumulated~~liquid ~~Other~~investments ~~Comprehensive~~with ~~Income~~original ~~(Topic~~maturities of ~~220)~~three ~~(“ASU~~months ~~2018-02”),~~or ~~which~~less ~~permits~~when ~~entities to~~purchased ~~reclassify~~are ~~the~~considered ~~tax~~to ~~effects~~be ~~stranded~~cash inequivalents. ~~accumulated~~All ~~other~~cash ~~comprehensive~~equivalents ~~income~~are ascarried aat ~~result~~cost ofless ~~recent~~any unamortized ~~United~~premium ~~States~~or ~~federal~~discount, ~~tax reforms~~which toapproximates ~~retained~~fair ~~earnings~~value. ~~The~~All ~~guidance~~investments ~~also requires entities to disclose their accounting policies~~ with ~~regards~~original tomaturities ~~the treatment~~ of ~~stranded~~more ~~tax~~than ~~effects~~three ~~not~~months when ~~related~~purchased toare ~~the~~classified ~~Tax~~as ~~Cuts and Jobs Act. It allows entities to elect either a “security~~available-byfor-~~security” approach~~sale, trading, or ~~a “portfolio approach”~~ held-to-maturity ~~recognize~~investments. ~~the~~Our ~~stranded~~marketable ~~tax~~securities, ~~effects~~other than ~~from~~equity asecurities, ~~valuation~~are ~~allowance~~classified ~~release.~~as ~~Under the security~~available-byfor-~~security approach~~sale, anand ~~entity~~are ~~will~~reported ~~recognize~~at ~~the~~fair ~~stranded~~value, ~~tax effects associated~~ with ~~individual~~unrealized ~~securities~~gains asand losses, itnet ~~disposes~~ of ~~each~~tax, ~~security.~~reported ~~Under~~in the ~~portfolio~~accompanying ~~approach,~~consolidated anbalance ~~entity~~sheets ~~will~~in ~~recognize~~stockholders’ ~~the~~equity ~~stranded~~as ~~tax effects associated with~~ a ~~portfolio~~component of ~~securities~~accumulated other ~~when~~comprehensive itincome ~~has~~or ~~disposed~~loss. ofInterest ~~all~~on securities ~~within~~is ~~that~~reported ~~portfolio.~~in ~~Entities~~the ~~can~~accompanying ~~elect~~consolidated tostatements ~~apply~~of ~~the guidance~~operations ~~retrospectively or~~ in ~~the~~interest ~~period~~income. ofDividends ~~adoption.~~paid ~~This~~by ~~guidance~~securities ~~was~~are ~~effective~~reported ~~for~~in ~~fiscal~~the ~~years~~accompanying ~~beginning~~consolidated ~~after~~statements ~~December~~of ~~15,~~operations ~~2018~~in ~~and~~other ~~interim~~income. ~~periods~~Realized ~~therein,~~gains ~~with~~or ~~early~~losses ~~adoption~~are ~~permitted.~~reported Wein ~~adopted~~ the ~~new~~accompanying ~~guidance effective July 1, 2019 with no material impact on our~~ consolidated ~~financial~~ statements orof ~~disclosures.~~operations Wein ~~elected~~net ~~the~~realized ~~portfolio~~gain ~~approach to recognize the stranded tax effects~~on ~~from our valuation allowance release~~investments.

11We used Level 3 inputs to determine the fair value of our preferred stock investments. The Company has elected the measurement alternative and will record the investments at cost adjusted for observable price changes for an identical or similar investment of the same issuer. Observable price changes and impairment indicators will be assessed each reporting period.

~~CCUR HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~ 11

~~In August~~We ~~2018,~~provide ~~the~~fair ~~FASB~~value ~~issued~~measurement ~~ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the~~disclosures ~~Disclosure~~of ~~Requirements~~our available-for ~~Fair Value Measurement (“ASU No. 2018~~-~~13”).~~sale ~~ASU~~securities ~~No.~~in ~~2018-13~~accordance iswith ~~part~~one of the ~~disclosure framework~~three ~~project~~levels ~~and~~of ~~eliminates certain disclosure requirements for~~ fair value ~~measurements,~~measurement. ~~requires~~Our ~~entities~~financial ~~to disclose new~~assets ~~information,~~ and ~~modifies~~liabilities ~~existing~~that ~~disclosure~~were ~~requirements.~~measured ~~The~~at ~~new~~fair ~~guidance~~value ~~was~~on ~~effective~~a ~~for~~recurring ~~fiscal~~basis ~~years~~as ~~beginning~~of ~~after~~ December 15 31, ~~2019,~~2020 ~~including~~and ~~interim periods within those fiscal years. Early adoption was permitted. We adopted the new guidance effective July 1~~June 30, 2020, ~~with~~are ~~no impact on our consolidated financial statements or disclosures.~~as follows:

In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments (“ASU 2020-03”). ASU 2020-03 provides changes to clarify or improve existing guidance. This guidance is effective upon issuance. We adopted the new guidance effective March 31, 2020 with no impact on our consolidated financial statements or disclosures.

	As of December 31, 2020 Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)

	(Amounts in thousands)
Cash	$	14,886	$	14,886	$	-	$	-
Money market funds		1,337		1,337		-		-
Cash and cash equivalents	$	16,223	$	16,223	$	-	$	-

Common stock and common stock options	$	8,396	$	8,396	$	-	$	-
Preferred stock		4,873		2,187		-		2,686
Equity investments	$	13,269	$	10,583	$	-	$	2,686

Corporate debt	$	12,893	$	-	$	12,893	$	-
Available-for-sale investments	$	12,893	$	-	$	12,893	$	-

Recent Accounting Guidance Not Yet Adopted

	As of June 30, 2020 Fair Value		Quoted Prices in Active Markets (Level 1)		Observable Inputs (Level 2)		Unobservable Inputs (Level 3)

	(Amounts in thousands)
Cash	$	4,473	$	4,473	$	-	$	-
Money market funds		4,863		4,863		-		-
Cash and cash equivalents	$	9,336	$	9,336	$	-	$	-

Common stock and common stock options	$	4,489	$	4,489	$	-	$	-
Preferred stock		2,883		-		-		2,883
Equity investments	$	7,372	$	4,489	$	-	$	2,883

Corporate debt	$	21,429	$	-	$	21,429	$	-
Available-for-sale investments	$	21,429	$	-	$	21,429	$	-

~~In November~~The ~~2019,~~carrying ~~the~~amounts ~~FASB~~of ~~issued~~certain ~~ASU No. 2019-10~~financial instruments, ~~Financial~~including ~~Instruments~~cash –equivalents, ~~Credit Losses (Topic 326)~~MCAs, ~~Derivatives~~ and ~~Hedging (Topic~~other ~~815)~~advances, ~~and~~approximate ~~Leases~~their ~~(Topic~~fair ~~842):~~values ~~Effective~~due ~~Dates~~to ~~(“ASU~~their ~~2019~~short-~~10”).~~term ~~Among other things, ASU 2019-10 provides~~nature. ~~that~~Included ~~ASU~~in ~~No. 2016~~available-~~13,~~for-sale ~~Financial~~securities ~~Instruments—Credit~~is ~~Losses~~a ~~(Topic~~loan ~~326):~~which ~~Measurement~~we ofpurchased ~~Credit~~from ~~Losses~~the onsyndicated ~~Financial~~loan ~~Instruments (“ASU~~market. ~~2016-13”)~~Quotations ~~will~~are ~~be effective~~ available for ~~public~~this ~~business~~security ~~entities~~on ~~that~~the ~~are~~syndicated ~~SEC~~loan ~~filers,~~market. ~~excluding~~During ~~smaller reporting companies such as~~ the ~~Company,~~three ~~for~~months ~~fiscal~~ended ~~years beginning after~~ December 31, 152020, ~~2019~~this ~~and~~loan ~~interim~~was ~~periods~~exchanged for ~~within~~a ~~those~~preferred ~~fiscal~~stock ~~years~~investment. ~~For~~ ~~all~~The ~~other~~fair ~~entities,~~value ~~including~~of ~~smaller~~our ~~reporting~~syndicated ~~companies~~portion ~~like~~of ~~the~~this ~~Company,~~loan ~~ASU~~was ~~2016-13~~$0 ~~will~~and be$3,240,000 ~~effective~~as ~~for~~of ~~fiscal years~~December 31, ~~beginning~~2020 ~~after~~and ~~December 15~~June 30, ~~2022~~2020, ~~including interim periods within those fiscal years~~respectively. ~~For~~The ~~all~~Company’s ~~entities,~~assets ~~early~~and ~~adoption~~obligations ~~will continue~~measured toat befair ~~permitted.~~value Weusing ~~are~~Level ~~currently~~3 ~~evaluating~~inputs were ~~the~~valued ~~impact~~at ~~that~~$2,686,000 ~~ASU~~as ~~2016-13~~of ~~will~~December 31, ~~have~~2020 onand ~~our~~$2,883,000 ~~consolidated~~as ~~financial~~of ~~statements and~~June 30, ~~disclosures~~2020.

~~In December~~The ~~2019,~~following ~~the~~table ~~FASB~~shows ~~issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying~~ the ~~Accounting for Income Taxes (“ASU~~valuation ~~2019-12”).~~methodology ~~ASU~~and ~~2019-12~~unobservable ~~simplifies~~inputs ~~the accounting~~ for ~~income~~Level ~~taxes~~3 byassets ~~removing certain exceptions to the general principles in Topic 740~~ and ~~clarifying~~liabilities ~~and~~measured ~~amending~~at ~~existing~~fair ~~guidance.~~value ~~This~~on ~~guidance~~a isrecurring ~~effective~~basis ~~for~~as ~~fiscal~~of ~~years, and interim periods within those fiscal years, beginning after~~ December 15 31, 2020, ~~with~~($ ~~early~~amounts ~~adoption~~in ~~permitted. We are currently evaluating the impact that ASU 2019-12 will have on our consolidated financial statements and disclosures.~~thousands):

	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
Equity securities, fair value
Preferred stock	$	2,686	cost, or observable price changes	not applicable	not applicable

~~CCUR~~The ~~HOLDINGS,~~following table shows the valuation ~~INC.~~methodology and unobservable inputs for Level 3 assets and liabilities measured at fair value on a recurring basis as of June 30, ~~NOTES~~2020 TO($ ~~CONSOLIDATED~~amounts ~~FINANCIAL~~in ~~STATEMENTS~~thousands):

3. Investments

	Fair Value		Valuation Methodology	Unobservable Inputs	Range of Inputs
Equity securities, fair value
Preferred stock	$	2,883	cost, or observable price changes	not applicable	not applicable

~~Fixed-Maturity and Equity Securities Investments~~12

~~The~~2. ~~following~~Recent ~~tables provide~~Accounting ~~information relating to investments in fixed-maturity and equity securities:~~Guidance

September 30, 2020	Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Amounts in thousands)
Equity securities
Common stock and common stock options	$	8,173	$	294	$	(3,596	)	$	4,871
Preferred stock		2,883		-		-			2,883
Total equity securities	$	11,056	$	294	$	(3,596	)	$	7,754

Recently Issued and Adopted Accounting Guidance

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Fixed-maturity securities
Corporate debt	$	20,892	$	-	$	(6,108	)	$	14,784
Total fixed-maturity securities	$	20,892	$	-	$	(6,108	)	$	14,784

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). ASU 2018-13 is part of the disclosure framework project and eliminates certain disclosure requirements for fair value measurements, requires entities to disclose new information, and modifies existing disclosure requirements. The new guidance was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption was permitted. We adopted the new guidance effective July 1, 2020, with no impact on our consolidated financial statements or disclosures.

June 30, 2020	Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Amounts in thousands)
Equity securities
Common stock and common stock options	$	6,746	$	203	$	(2,460	)	$	4,489
Preferred stock		2,883		-		-			2,883
Total equity securities	$	9,629	$	203	$	(2,460	)	$	7,372

Recent Accounting Guidance Not Yet Adopted

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Fixed-maturity securities
Corporate debt	$	26,594	$	455	$	(5,620	)	$	21,429
Total fixed-maturity securities	$	26,594	$	455	$	(5,620	)	$	21,429

In October 2020, the FASB issued ASU No. 2020-08, Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs (“ASU 2020-08”), and ASU No. 2020-10, Codification Improvements (“ASU 2020-10”). ASU 2020-08 and ASU 2020-10 provide changes to clarify or improve existing guidance. This guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is not permitted. We are currently evaluating the impact that ASU 2020-08 and ASU 2020-10 will have on our consolidated financial statements and disclosures.

During the three months ended September 30, 2020 and 2019, we reported unrealized losses on equity securities, net, of $1,045,000 and unrealized gains on equity securities, net, of $469,000 within our consolidated statements of operations, respectively. During the three months ended September 30, 2020 and 2019, we reported $532,000 and $1,076,000 realized gains on the sale of debt and equity securities within our consolidated statements of operations, respectively.13

133. Investments

~~CCUR~~Fixed-Maturity ~~HOLDINGS,~~and ~~INC.~~Equity Securities ~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~Investments

~~Maturities~~The offollowing ~~Fixed-Maturity Securities~~tables ~~Available~~provide information relating to investments in fixed-~~for-Sale~~maturity and equity securities:

The amortized cost and fair values of fixed-maturity securities available for sale as of September 30, 2020 are shown by contractual maturity in the table below. Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2020	Cost		Unrealized Gains		Unrealized Losses			Fair Value

	(Amounts in thousands)
Equity securities
Common stock and common stock options	$	9,577	$	1,119	$	(2,300	)	$	8,396
Preferred stock		4,709		1,757		(1,593	)		4,873
Total equity securities	$	14,286	$	2,876	$	(3,893	)	$	13,269

Fixed-Maturity Securities
		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	Amortized Cost		Fair Value
Fixed-maturity securities
	(Amounts in thousands)
Corporate debt	$	13,880	$	443	$	(1,430	)	$	12,893
Due after one year through three years	$	12,759	$	8,041
Total fixed-maturity securities	$	13,880	$	443	$	(1,430	)	$	12,893
Due after three years through five years		-		-
Due after five years through ten years		8,133		6,743
Total fixed-maturity securities	$	20,892	$	14,784

4. Mortgage and Commercial Loans Receivable

June 30, 2020	Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(Amounts in thousands)
Equity securities
Common stock and common stock options	$	6,746	$	203	$	(2,460	)	$	4,489
Preferred stock		2,883		-		-			2,883
Total equity securities	$	9,629	$	203	$	(2,460	)	$	7,372

We had $4,386,000 of loan assets as of September 30, 2020, of which $1,504,000 were mortgage loans secured by real property in certain markets throughout the United States, and the remaining balance was comprised of loans to Funders. Summaries of mortgage loan activity for the three months ended September 30, 2020 and 2019 are as follows:

	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
Fixed-maturity securities
Corporate debt	$	26,594	$	455	$	(5,620	)	$	21,429
Total fixed-maturity securities	$	26,594	$	455	$	(5,620	)	$	21,429

Mortgage Loans Receivable
	Principal Balance			Deferred Fees/ Prepaid Interest			Accrued Interest		Carrying Value
	(Amounts in thousands)
Balance at July 1, 2020	$	1,738		$	(86	)	$	43	$	1,695
Additions during the period:
New mortgage loans		1,420			-			-		1,420
Additions to deferred fees		-			(20	)		-		(20	)
Amortization of deferred fees		-			37			-		37
Interest due at maturity		-			-			10		10
Deductions during the period:
Collections of principal		(1,638	)		-			-		(1,638	)
Balance at September 30, 2020	$	1,520		$	(69	)	$	53	$	1,504
Balance at July 1, 2019	$	4,195		$	(84	)	$	3	$	4,114
Additions during the period:
Amortization of deferred fees		-			33			-		33
Deductions during the period:
Collections of principal		(769	)		-			-		(769	)
Balance at September 30, 2019	$	3,426		$	(51	)	$	3	$	3,378

During the three months ended December 31, 2020, we reported unrealized gains on equity securities, net, of $2,285,000 within our consolidated statements of operations. During the three months ended December 31, 2019, we reported unrealized losses on equity securities, net, of $627,000 within our consolidated statements of operations. During the three months ended December 31, 2020 and 2019, we reported $876,000 and $843,000 realized gains on the sale of debt and equity securities within our consolidated statements of operations, respectively.

14During the six months ended December 31, 2020, we reported unrealized gains on equity securities, net, of $1,240,000 within our consolidated statements of operations. During the six months ended December 31, 2019, we reported unrealized losses on equity securities, net, of $158,000 within our consolidated statements of operations. During the six months ended December 31, 2020 and 2019, we reported $1,408,000 and $1,919,000 realized gains on the sale of debt and equity securities within our consolidated statements of operations, respectively.

~~CCUR~~Maturities ~~HOLDINGS,~~of ~~INC.~~Fixed-Maturity Securities Available-for-Sale

~~NOTES~~The TOamortized ~~CONSOLIDATED~~cost and ~~FINANCIAL~~fair ~~STATEMENTS~~values of fixed-maturity securities available for sale as of December 31, 2020 are shown by contractual maturity in the table below. Actual maturities can differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

~~Summaries of loan activity to Funders for the three months ended September 30, 2020 and 2019 are as follows (amounts in thousands):~~14

Other Loans Receivable
Balance at July 1, 2020	$	3,878
Deductions during the period:
Collections of principal		(996	)
Balance at September 30, 2020	$	2,882
Balance at July 1, 2019	$	2,750
Additions during the period:
Borrowings		2,750
Balance at September 30, 2019	$	5,500

Fixed-Maturity Securities

Loans reported under “Other Loans Receivable” have two-year, interest-only terms, bearing interest at 17.0% per annum, and are to a single Funder. The borrower may pay down principal without incurring a prepayment penalty and paid down $996,000 of principal during the three months ended September 30, 2020.

	Amortized Cost		Fair Value

	(Amounts in thousands)
Due after one year through three years	$	5,698	$	4,268
Due after three years through five years		-		-
Due after five years through ten years		8,182		8,625
Total fixed-maturity securities	$	13,880	$	12,893

54. ~~Advances~~Mortgage ~~Receivable,~~and ~~net~~Commercial Loans Receivable

~~Total~~We ~~advances~~had ~~receivable~~$3, ~~net~~738,000 of loan assets as of ~~September~~December 31, 302020, ~~2020~~of which $1,958,000 ~~consisted~~were mortgage loans secured by real property in certain markets throughout the United States, and the remaining balance was comprised of loans to Funders. Summaries of mortgage loan activity for the ~~following~~six months ended December 31, 2020 and 2019 are as follows:

						Provision
	Advance		Deferred			for Credit			Carrying
	Principal		Fees			Losses			Value
	(Amounts in thousands)
Merchant cash advances	$	189	$	-		$	(14	)	$	175
Aviation advances		10,000		(309	)		-			9,691
Advances receivable, net	$	10,189	$	(309	)	$	(14	)	$	9,866

Mortgage Loans Receivable

Total advances receivable, net, as of June 30, 2020, consisted of the following:

	Principal Balance			Deferred Fees/ Prepaid Interest			Accrued Interest		Carrying Value

	(Amounts in thousands)
Balance at July 1, 2020	$	1,738		$	(86	)	$	43	$	1,695
Additions during the period:
New mortgage loans		2,432			-			-		2,432
Additions to deferred fees		-			(40	)		-		(40	)
Amortization of deferred fees		-			43			-		43
Interest due at maturity		-			-			12		12
Deductions during the period:
Collections of principal		(2,184	)		-			-		(2,184	)
Balance at December 31, 2020	$	1,986		$	(83	)	$	55	$	1,958

Balance at July 1, 2019	$	4,195		$	(84	)	$	3	$	4,114
Additions during the period:
Amortization of deferred fees		-			67			-		67
Interest due at maturity		-			-			-		-
Deductions during the period:
Collections of principal		(2,554	)		-			-		(2,554	)
Balance at December 31, 2019	$	1,641		$	(17	)	$	3	$	1,627

						Provision
	Advance		Deferred			for Credit			Carrying
	Principal		Fees			Losses			Value
	(Amounts in thousands)
Merchant cash advances	$	1,919	$	-		$	(124	)	$	1,795
Aviation advances		10,000		(359	)		-			9,641
Advances receivable, net	$	11,919	$	(359	)	$	(124	)	$	11,436

AsSummaries of ~~September~~loan ~~30,~~activity ~~2020,~~to ~~100%~~Funders ~~of MCAs in~~for ~~which~~the wesix ~~hold~~months aended ~~participation interest were funded through a single Funder. As of June 30~~December 31, 2020, ~~100%~~and of2019 ~~MCAs~~are inas ~~which~~follows we(amounts ~~held a~~in ~~participation interest were funded through three Funders.~~thousands):

15Other Loans Receivable

CCUR HOLDINGS, INC.

Balance at July 1, 2020	$	3,878
Deductions during the period:
Collections of principal		(2,098	)
Balance at December 31, 2020	$	1,780

Balance at July 1, 2019	$	2,750
Additions during the period:
Borrowings		2,750
Balance at December 31, 2019	$	5,500

~~NOTES~~Loans TOreported ~~CONSOLIDATED~~under ~~FINANCIAL~~“Other ~~STATEMENTS~~Loans Receivable” have two-year, interest-only terms, bearing interest at 17.0% per annum, and are to a single Funder. The borrower may pay down principal without incurring a prepayment penalty and paid down $2,098,000 of principal during the six months ended December 31, 2020. See Note 16 for further discussion.

~~Changes~~5. inAdvances ~~the~~Receivable, ~~allowance for MCA credit losses are as follows (amounts in thousands):~~net

Allowance for credit losses, July 1, 2020	$	124
Provision for credit losses		52
Receivables charged off		(81	)
Recoveries of receivables previously charged off		2
Sale of portfolios		(84	)
Effects of exchange rate differences		1
Allowance for credit losses, September 30, 2020	$	14
Allowance for credit losses, July 1, 2019	$	736
Provision for credit losses		216
Receivables charged off		(520	)
Recoveries of receivables previously charged off		128
Allowance for credit losses, September 30, 2019	$	560

Total advances receivable, net, as of December 31, 2020, consisted of the following:

During the three months ended September 30, 2020 and 2019, we provided $5,000,000 and $3,000,000 of gross advances, respectively, to fund aircraft purchasers’ deposits to purchase aircraft in exchange for paying us a fee and a guaranty of the full repayment obligation from the principal of a third-party business. These deposits are typically outstanding for less than six months. The prepaid fees are netted against the principal balance, earned over the advance period, and reported as part of MCA and other financial services income within the accompanying consolidated statements of operations. During the three months ended September 30, 2020 and 2019, we collected $5,000,000 and $2,750,000, respectively, of these advances. Each quarter, we review the carrying value of these cash advances and determine if an impairment reserve is necessary.

					Provision
	Advance		Deferred		for Credit			Carrying
	Principal		Fees		Losses			Value

	(Amounts in thousands)
Merchant cash advances	$	120	$	-	$	(9	)	$	111
Aviation advances		13,760		-		(13,760	)		-
Advances receivable, net	$	13,880	$	-	$	(13,769	)	$	111

6.Total ~~Accounts~~advances ~~Payable~~receivable, ~~and~~net, ~~Accrued~~as ~~Expenses~~of June 30, 2020, consisted of the following:

Accounts payable and accrued expenses as of September 30, 2020 and June 30, 2020 consisted of the following:

						Provision
	Advance		Deferred			for Credit			Carrying
	Principal		Fees			Losses			Value

	(Amounts in thousands)
Merchant cash advances	$	1,919	$	-		$	(124	)	$	1,795
Aviation advances		10,000		(359	)		-			9,641
Advances receivable, net	$	11,919	$	(359	)	$	(124	)	$	11,436

	September 30, 2020		June 30, 2020
	(Amounts in thousands)
Accounts payable, trade	$	454	$	294
Lease liability, short-term portion		235		225
Dividends payable, short-term portion		46		53
Unrecognized income from research and development tax credits		26		35
Accrued compensation		43		29
Other accrued expenses		94		167
Total accounts payable and accrued expenses	$	898	$	803

As of December 31, 2020, 100% of MCAs in which we hold a participation interest were funded through a single Funder. As of June 30, 2020, 100% of MCAs in which we held a participation interest were funded through three Funders.

~~7. Pensions~~16

~~Defined-Benefit~~CCUR ~~Plans~~HOLDINGS, INC.

~~The~~NOTES ~~following~~TO ~~table~~CONSOLIDATED ~~provides~~FINANCIAL ~~the components of net periodic benefit cost of our German defined-benefit pension plans recognized in earnings for the three months ended September 30, 2020 and 2019 (amounts in thousands):~~STATEMENTS

16Changes in the allowance for MCA credit losses are as follows (amounts in thousands):

CCUR HOLDINGS, INC.

Allowance for credit losses, July 1, 2020	$	124
Provision for credit losses		13,827
Receivables charged off		(99	)
Recoveries of receivables previously charged off		1
Sale of portfolios		(84	)
Effects of exchange rate differences		1
Allowance for credit losses, December 31, 2020	$	13,770

Allowance for credit losses, July 1, 2019	$	736
Provision for credit losses		396
Receivables charged off		(911	)
Recoveries of receivables previously charged off		138
Allowance for credit losses, December 31, 2019	$	359

~~NOTES~~During TOthe ~~CONSOLIDATED~~six ~~FINANCIAL~~months ~~STATEMENTS~~ended December 31, 2020 and 2019, we provided $9,000,000 and $8,000,000 of gross advances, respectively, to fund aircraft purchasers’ deposits to purchase aircraft in exchange for paying us a fee and a guaranty of the full repayment obligation from the principal of a third-party business. These deposits are typically outstanding for less than six months. The prepaid fees are netted against the principal balance, earned over the advance period, and reported as part of MCA and other financial services income within the accompanying consolidated statements of operations. During the six months ended December 31, 2020 and 2019, we collected $5,000,000 and $3,000,000, respectively, of these advances. See Note 16 for further discussion.

	Three Months Ended September 30,
	2020		2019
Interest cost	$	9	$	7
Expected return on plan assets		1		(1	)
Recognized actuarial loss		22		22
Net periodic benefit cost	$	32	$	28

Equity Method Investments

8Our investment in Spartacus Sponsor LLC (the “Sponsor”) of $3,850,000 is accounted for under the equity method and is included within equity method investment in our consolidated balance sheet as of December 31, 2020. ~~Income~~Our ~~Taxes~~ownership percentage in the Sponsor, which is recorded under the equity method investment, is 38.5%. The Company could potentially increase its investment through grants of additional units up to 44.5% subject to certain return hurdles for the Sponsor. As of December 31, 2020, the Sponsor controls all of the founders’ shares of Spartacus Acquisition Corporation (“Spartacus”). During the three and six months ended December 31, 2020, we recorded $53,000 of losses from this investment as equity in net loss from equity method investment within our consolidated statements of operations.

~~The~~On ~~Company~~October ~~and~~19, 2020, Spartacus completed its ~~subsidiaries~~initial ~~file~~public ~~income tax~~offering ~~returns~~(“IPO”). inIn connection with the ~~U.S.~~IPO, ~~federal~~the ~~jurisdiction~~Sponsor, ~~and~~of inwhich ~~various~~the ~~states~~Company is a Managing Member and ~~foreign~~holds ~~jurisdictions.~~50% ~~With~~voting acontrol, ~~few~~purchased ~~exceptions~~8,104,244 wewarrants ~~are~~at noa price of $1.00 per warrant. Each warrant is ~~longer~~exercisable ~~subject~~into toone Ushare of Spartacus’ Class A common stock at a price of $11.S50 per share. ~~federal~~Spartacus is a newly organized special-purpose acquisition company formed for the purpose of effecting a merger, ~~state~~capital ~~and~~stock ~~local~~exchange, asset acquisition, stock purchase, reorganization, or ~~non-U.S.~~similar ~~income~~business ~~tax~~combination ~~examinations~~with byone ~~tax~~or ~~authorities~~more ~~for~~businesses, ~~fiscal~~which ~~years~~is ~~before~~referred to as an initial business ~~2000~~combination.

~~The~~Summarized ~~domestic~~financial ~~and~~information ~~foreign~~relating ~~components~~to ofour ~~income~~equity ~~from~~method ~~continuing~~investment ~~operations~~is ~~before income taxes are~~ as follows (amounts in thousands):

	Three Months Ended September 30,
	Three Months Ended December 31,			Six Months Ended December 31,
	2020			~~2019~~2020
United States	$	616		$	3,774
Statements of Operations:
Foreign		(18	)		(40	)
Operating loss	$	138		$	138
Income from operations	$	598		$	3,734
Net loss	$	138		$	138

~~The components of the provision for income taxes are as follows (amounts in thousands):~~17

	Three Months Ended September 30,
	2020		2019
Domestic	$	231	$	173
Foreign		-		-
Total	$	231	$	173

CCUR HOLDINGS, INC.

~~Net~~NOTES ~~Operating~~TO ~~Losses~~CONSOLIDATED ~~(“NOLs”)~~FINANCIAL STATEMENTS

As of June 30, 2020, we had U.S. federal NOL carryforwards of approximately $51,438,000 for income tax purposes, of which none expired in our fiscal year 2020, and the remainder expire at various dates through our fiscal year 2037; however, with the enactment of the Tax Cuts and Jobs Act on December 22, 2017, federal NOLs generated in taxable years beginning after December 31, 2017 now have no expiration date. We recently completed an evaluation of the potential effect of Section 382 of the Internal Revenue Code (the “IRC”) on our ability to utilize these NOLs. The study concluded that we have not had an ownership change for the period from July 22, 1993 to June 30, 2020; therefore, the NOLs will not be subject to limitation under Section 382. If we experience an ownership change as defined in Section 382 of the IRC, our ability to use these NOLs will be substantially limited, which could therefore significantly impair the value of that asset.

	December 31, 2020
	(Amounts in thousands)
Balance Sheets:

Current assets	$	204,162
Current liabilities		10
Long-term liabilitiies		199,286

~~As of June 30, 2020, we had state NOLs of $22,856,000 and foreign NOLs of $8,258,000~~7. ~~The~~Accounts ~~state~~Payable ~~NOLs expire according to the rules of each state~~ and ~~expiration~~Accrued will occur at various dates through our fiscal year 2037. The foreign NOLs expire according to the rules of each country. As of June 30, 2020, the foreign NOLs can be carried forward indefinitely in each country, although some countries do restrict the amount of NOL that can be used in a given tax year.Expenses

17Accounts payable and accrued expenses as of December 31, 2020 and June 30, 2020 consisted of the following:

CCUR HOLDINGS, INC.

	December 31, 2020		June 30, 2020
	(Amounts in thousands)

Accounts payable, trade	$	228	$	294
Lease liability, short-term portion		75		225
Dividends payable, short-term portion		37		53
Unrecognized income from research and development tax credits		20		35
Accrued compensation		287		29
Other accrued expenses		43		167
Total accounts payable and accrued expenses	$	690	$	803

~~NOTES~~8. ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~Pensions

~~Deferred~~Defined-Benefit ~~Tax Assets and Related Valuation Allowances~~Plans

InThe ~~assessing~~following ~~the~~table ~~realizability~~provides ~~of deferred tax assets, we consider whether it is more likely than not that some portion or all of~~ the ~~deferred tax assets will not be realized.~~components In determining whether or not a valuation allowance for tax assets is needed, we evaluate all available evidence, both positive and negative, including: trends in operating income or losses; currently available information about future years; future reversals of ~~existing~~net ~~taxable~~periodic ~~temporary~~benefit ~~differences;~~cost ~~future taxable income exclusive~~ of ~~reversing~~our ~~temporary~~German ~~differences~~defined-benefit ~~and~~pension ~~carryforwards; taxable~~plans ~~income~~recognized in ~~prior~~earnings ~~carryback~~for ~~years if carryback is permitted under~~ the ~~tax~~three ~~law;~~ and ~~tax~~six ~~planning~~months ~~strategies that would accelerate~~ended ~~taxable amounts to utilize expiring carryforwards~~December 31, ~~change~~2020 ~~the character of taxable~~ and ~~deductible~~2019 (amounts from ordinary income or loss to capital gain or loss, or switch from tax-exempt to taxable investments. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. As of June 30, 2020, we have released the valuation allowance on our U. S. deferred tax assets, with the exception of certain federal and state NOLs and credits expected to expire before usage. We continue to maintain a full valuation allowance on our German deferred tax asset.thousands):

Unrecognized Tax Benefits

	Three Months Ended December 31,					Six Months Ended December 31,
	2020		2019			2020		2019
Interest cost	$	10	$	8		$	19	$	15
Expected return on plan assets		1		(1	)		2		(2	)
Recognized actuarial loss		22		22			44		44
Net periodic benefit cost	$	33	$	29		$	65	$	57

We9. ~~have~~Income ~~evaluated our unrecognized tax benefits and determined that there has not been a material change in the amount of such benefits for the three months ended September 30, 2020.~~Taxes

9The Company and its subsidiaries file income tax returns in the U.S. ~~Stock~~federal jurisdiction and in various states and foreign jurisdictions. With a few exceptions, we are no longer subject to U.S. federal, state and local, or non-~~Based~~U.S. ~~Compensation~~income tax examinations by tax authorities for fiscal years before 2000.

We have a stock incentive plan providing for the grant of stock-based awards to employees and directors. The Compensation Committee of the Board of Directors (“Compensation Committee”) administers the Amended and Restated 2011 Stock Incentive Plan (the “Stock Plan”). Under the Stock Plan, the Compensation Committee may award stock options and shares of common stock on a restricted basis. The Stock Plan also specifically provides for stock appreciation rights (“SARs”) and authorizes the Compensation Committee to provide, either at the time of the grant of an award under the Stock Plan or otherwise, that such award may be cashed out upon terms and conditions to be determined by the Compensation Committee or the Board of Directors.18

~~Option~~CCUR ~~awards are granted with an exercise price equal to the market price of our stock at the date of grant. We recognize stock compensation expense in accordance with ASU 2018-07~~HOLDINGS, Compensation – Stock Compensation (ASC 718): Improvements to Nonemployee Share-Based Payment Accounting, over the requisite service period of the individual grantees, which generally equals the vesting period INC. ~~All of our stock compensation is accounted for as equity instruments. As of September 30, 2020, there were 721,531 shares available for future grant under the Stock Plan.~~

~~During~~NOTES ~~the~~TO ~~three~~CONSOLIDATED ~~months~~FINANCIAL ended September 30, 2020 and 2019, we recorded $60,000 and $99,000, respectively, of stock-based compensation expense to selling, general, and administrative expense. Our stock-based compensation expense results from the issuance of stock options and restricted stock to employees and board members during the current and prior years, for which expense is recognized over the respective vesting periods of the granted stock and options.STATEMENTS

~~Restricted~~The ~~Stock~~domestic ~~Awards~~and foreign components of (loss) income before income taxes and equity in net loss from equity method investment are as follows (amounts in thousands):

A summary of our restricted stock activity for the three months ended September 30, 2020 is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019

United States	$	(9,965	)	$	3,058		$	(9,349	)	$	6,832
Foreign		(41	)		(41	)		(59	)		(81	)
(Loss) income before income taxes and equity in net loss from equity method investment	$	(10,006	)	$	3,017		$	(9,408	)	$	6,751

Restricted Stock Awards	Shares			Weighted- Average Grant Date Fair Value
Non-vested at July 1, 2020		204,190		$	4.41
Forfeited		(29,338	)		4.35
Non-vested at September 30, 2020		174,852		$	4.42

The components of the provision for income taxes are as follows (amounts in thousands):

	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019

Domestic	$	(1,725	)	$	(17	)	$	(1,494	)	$	156
Foreign		-			-			-			-
Total	$	(1,725	)	$	(17	)	$	(1,494	)	$	156

~~CCUR~~Net ~~HOLDINGS, INC.~~Operating Losses (“NOLs”)

~~NOTES~~As TOof ~~CONSOLIDATED~~June 30, 2020, we had U.S. federal ~~FINANCIAL~~NOL ~~STATEMENTS~~carryforwards of approximately $51,438,000 for income tax purposes, of which none expired in our fiscal year 2020, and the remainder expire at various dates through our fiscal year 2037; however, with the enactment of the Tax Cuts and Jobs Act on December 22, 2017, federal NOLs generated in taxable years beginning after December 31, 2017 now have no expiration date. We recently completed an evaluation of the potential effect of Section 382 of the Internal Revenue Code (the “IRC”) on our ability to utilize these NOLs. The study concluded that we have not had an ownership change for the period from July 22, 1993 to June 30, 2020; therefore, the NOLs will not be subject to limitation under Section 382. If we experience an ownership change as defined in Section 382 of the IRC, our ability to use these NOLs will be substantially limited, which could therefore significantly impair the value of that asset.

~~During~~As ~~the~~of ~~three months ended September~~ June 30, 2020, ~~there~~we ~~were~~had nostate ~~grants~~NOL carryforwards of ~~restricted~~$22,856,000 ~~stock~~and ~~awards~~foreign NOL carryforwards of $8,258,000. ~~Total~~The ~~remaining~~state ~~compensation~~NOL ~~cost~~carryforwards ofexpire ~~restricted~~according ~~stock~~to ~~awards~~the ~~issued~~rules of ~~but~~each ~~not~~state, ~~yet~~and ~~vested~~expiration aswill occur at various dates through our fiscal year 2037. The foreign NOL carryforwards expire according to the rules of ~~September~~each country. As of June 30, 2020 ~~was $340~~,~~000,~~ ~~which~~the isforeign ~~expected~~NOLs tocan be ~~recognized~~carried ~~over~~forward ~~the~~indefinitely ~~weighted-average~~in ~~recognition~~each country, ~~period~~although some countries do restrict the amount of ~~2.07~~NOL ~~years~~that can be used in a given tax year.

~~Stock~~Deferred ~~Options~~Tax Assets and Related Valuation Allowances

AsIn assessing the realizability of ~~September~~deferred tax 30assets, ~~2020~~we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In determining whether or not a valuation allowance for tax assets is needed, we ~~had~~evaluate 15all available evidence,~~000 stock~~ ~~options~~both ~~outstanding~~positive and negative, including: trends in operating income or losses; currently available information about future years; future reversals of ~~which~~existing 10taxable temporary differences; future taxable income exclusive of reversing temporary differences and carryforwards; taxable income in prior carryback years if carryback is permitted under the tax law; and tax planning strategies that would accelerate taxable amounts to utilize expiring carryforwards,~~000~~ ~~options~~change ~~had~~the ~~vested~~character of taxable and ~~were~~deductible ~~exercisable~~amounts from ordinary income or loss to capital gain or loss, ator aswitch ~~weighted~~from tax-~~average~~exempt ~~exercise~~to ~~price~~taxable investments. The ultimate realization of $5deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.~~42,~~ ~~with~~As aof ~~weighted-average~~June 30, ~~remaining~~2020, ~~contractual~~we ~~term~~have released the valuation allowance on our U. S. deferred tax assets, with the exception of 7certain federal and state NOLs and credits expected to expire before usage.38 ~~years~~We continue to maintain a full valuation allowance on our German deferred tax asset.

Options outstanding and exercisable had no intrinsic value at September 30, 2020 and 2019. Total remaining compensation cost of stock options granted, but not yet vested, at September 30, 2020 is $2,000, which is expected to be recognized over the weighted-average remaining period of 0.38 years. We generally issue new shares to satisfy option exercises. During the three months ended September 30, 2020 and 2019, there were no grants, forfeitures, or exercises of stock options.19

~~10.~~CCUR ~~Stock Repurchase Plan~~HOLDINGS, INC.

OnNOTES ~~March~~TO 5,CONSOLIDATED ~~2018,~~FINANCIAL the Company announced its Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock. In February 2019 we completed the purchase of the authorized 1,000,000 shares, and the Board of Directors authorized the repurchase of an additional 500,000 shares of the Company’s common stock under a new repurchase program that replaces and supersedes the prior repurchase program. Repurchases may be made at the discretion of management through open market or privately negotiated transactions or any combination of the same. Open market purchases may be made pursuant to trading plans subject to the restrictions and protections of Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The repurchase program does not have an expiration date. No purchases were made under this program during the three months ended September 30, 2020. At September 30, 2020, there were 364,298 shares available for repurchase under the program.STATEMENTS

~~11.~~Unrecognized ~~Accumulated~~Tax ~~Other Comprehensive Loss~~Benefits

~~The~~We ~~following~~have ~~table~~evaluated ~~summarizes~~our ~~the~~unrecognized ~~changes~~tax benefits inand ~~accumulated~~determined ~~other~~that ~~comprehensive~~there ~~loss~~has bynot ~~component,~~been ~~net~~a material change in the amount of ~~taxes,~~such benefits for the three months ended ~~September 30~~December 31, 2020:.

	Pension and Postretirement Benefit Plans			Currency Translation Adjustments			Unrealized Loss on Investments			Total
	(Amounts in thousands)
Balance at June 30, 2020	$	(1,517	)	$	523		$	(5,212	)	$	(6,206	)
Other comprehensive income (loss)		22			(181	)		(943	)		(1,102	)
Effect of deferred taxes on unrealized losses		-			-			215			215
Effect of exchange rates on the pension plans		(67	)		67			-			-
Net current period other comprehensive loss		(45	)		(114	)		(728	)		(887	)
Balance at September 30, 2020	$	(1,562	)	$	409		$	(5,940	)	$	(7,093	)

10.

Stock-Based Compensation

12We have a stock incentive plan providing for the grant of stock-based awards to employees and directors. ~~Segments~~The Compensation Committee of the Board of Directors (“Compensation Committee”) administers the Amended and Restated 2011 Stock Incentive Plan (the “Stock Plan”). Under the Stock Plan, the Compensation Committee may award stock options and shares of common stock on a restricted basis. The Stock Plan also specifically provides for stock appreciation rights (“SARs”) and authorizes the Compensation Committee to provide, either at the time of the grant of an award under the Stock Plan or otherwise, that such award may be cashed out upon terms and conditions to be determined by the Compensation Committee or the Board of Directors.

Option awards are granted with an exercise price equal to the market price of our stock at the date of grant. We ~~operate~~recognize stock compensation expense in ~~two~~accordance ~~segments:~~with ASU 2018-07, Compensation – Stock Compensation (iASC 718): ~~“MCA and~~Improvements ~~Other~~to ~~Financial~~Nonemployee ~~Services~~Share-Based ~~Operations~~Payment Accounting,” over ~~conducted~~the ~~primarily~~requisite ~~through~~service ~~LMCS~~period of the individual grantees, ~~and~~which ~~(ii)~~generally ~~“Real~~equals ~~Estate~~the ~~Operations,”~~vesting period. All of our stock compensation ~~conducted~~is ~~primarily~~accounted ~~through~~for ~~Recur~~as equity instruments. As of December 31, 2020, there were 733,706 shares available for future grant under the Stock Plan.

~~Our~~During ~~President~~the ~~and~~three ~~Chief~~months ~~Operating~~ended ~~Officer~~December 31, ~~(“COO”)~~2020, iswe ~~our~~recorded ~~chief~~a ~~operating~~reduction ~~decision~~of ~~maker~~$6,000 ~~(the~~of ~~“CODM”).~~stock-based ~~Our~~compensation ~~CODM~~expense ~~uses~~to ~~revenue~~selling, general, and ~~operating~~administrative ~~income~~expense due to ~~evaluate~~forfeitures exceeding expenses. During the ~~profitability~~three ofmonths ~~our~~ended ~~operating~~December 31, ~~segments;~~2019, ~~all~~we ~~other~~recorded ~~financial~~$96,000 ~~information~~of isstock-based ~~reviewed~~compensation expense byto ~~the~~selling, ~~CODM~~general, onand aadministrative ~~consolidated basis~~expense. ~~Segment~~During ~~operating~~the ~~contribution~~six ~~reflects~~months ~~segment~~ended ~~revenue~~December 31, ~~less~~2020 ~~operating~~and ~~expenses~~2019, ~~that~~we ~~are~~recorded $53,000 ~~directly~~and ~~attributable~~$195,000, torespectively, ~~the~~of ~~operating~~stock-based compensation expense. Our stock-based compensation expense results from the ~~segment,~~issuance ~~not~~of ~~including~~stock ~~corporate~~options and ~~unallocated~~restricted ~~expenses.~~stock ~~All~~to ofemployees ~~our~~and ~~principal~~board ~~operations~~members during the current and ~~assets~~prior ~~are~~years, ~~located~~for inwhich expense is recognized over the ~~United States~~respective vesting periods of the granted stock and options.

19Restricted Stock Awards

~~CCUR~~A ~~HOLDINGS,~~summary of our restricted stock activity ~~INC.~~for the six months ended December 31, 2020 is as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Awards	Shares			Weighted- Average Grant Date Fair Value
Non-vested at July 1, 2020		204,190		$	4.41
Granted		45,000			2.95
Vested		(41,673	)		4.57
Forfeited		(86,513	)		4.36
Non-vested at December 31, 2020		121,004		$	3.85

~~Segment~~Total ~~operating~~remaining ~~results~~compensation ~~are~~cost of restricted stock awards issued but not yet vested as ~~follows~~of December 31, 2020 was $219,000, which is expected to be recognized over the weighted-average ~~(amounts~~recognition inperiod ~~thousands):~~of 2.31 years.

	Three Months Ended September 30,
	2020			2019
Segment revenue:
Advance income	$	539		$	805
Syndication fees		129			550
Interest on loans to Funders		148			204
Other MCA revenue		-			93
MCA and other financial services operations revenues		816			1,652
Real estate operations revenues		94			79
Consolidated revenues		910			1,731
Segment operating expenses:
Selling, general, and administrative		192			354
Change in fair value of contingent consideration		-			100
Amortization of purchased intangibles		97			120
Provision for credit losses on advances		52			215
MCA and other financial services operations		341			789
Real estate operations		-			-
Add:
Corporate expenses		893			891
Consolidated operating expenses		1,234			1,680
Segment operating income (loss):
MCA and other financial services operations		475			863
Real estate operations		94			79
Add:
Corporate		(893	)		(891	)
Consolidated operating income (loss)	$	(324	)	$	51

Stock Options

~~Segment~~During ~~assets~~the ~~are~~three asand ~~follows:~~six months ended December 31, 2020, 5,000 unvested stock options were forfeited, and 10,000 vested stock options expired. During the three and six months ended December 31, 2020 and 2019, there were no grants or exercises of stock options. During the three and six months ended December 31, 2019, there were no forfeitures of stock options. As of December 31, 2020, there were no stock options outstanding.

	September 30, 2020			June 30, 2020
		(Amounts in thousands)
Segment assets:
MCA and other financial services	$	25,521		$	19,287
Real estate		9,815			9,275
Add:
Corporate assets		37,526			48,065
Corporate intercompany loan to LMCS		(3,041	)		(6,777	)
Total consolidated assets	$	69,821		$	69,850

20CCUR HOLDINGS, INC.

~~CCUR~~NOTES ~~HOLDINGS, INC.~~TO CONSOLIDATED FINANCIAL STATEMENTS

~~NOTES~~11. TOStock ~~CONSOLIDATED FINANCIAL~~Repurchase ~~STATEMENTS~~Plan

13On March 5, 2018, the Company announced its Board of Directors authorized the repurchase of up to 1,000,000 shares of the Company’s common stock. ~~Leases~~In February 2019 we completed the purchase of the authorized 1,000,000 shares, and the Board of Directors authorized the repurchase of an additional 500,000 shares of the Company’s common stock under a new repurchase program that replaces and supersedes the prior repurchase program. Repurchases may be made at the discretion of management through open market or privately negotiated transactions or any combination of the same. Open market purchases may be made pursuant to trading plans subject to the restrictions and protections of Rule 10b5-1 and/or Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The repurchase program does not have an expiration date. No purchases were made under this program during the three or six months ended December 31, 2020. As of December 31, 2020, there were 364,298 shares available for repurchase under the program.

The Company leases office space in two locations: (i) Duluth, Georgia, and (ii) New York, New York. The Duluth, Georgia lease expires in 2025, and the New York, New York lease expires in 2023. For leases with a term of 12 ~~months or less, we made an accounting policy election not to recognize lease assets and lease liabilities~~. ~~The~~Accumulated ~~following~~Other ~~information~~Comprehensive ~~represents the amounts included in the financial statements related to leases (amounts in thousands):~~Loss

	Three Months Ended September 30,
		2020			2019
Operating lease cost	$	60		$	54
Gross sublease income		4			52
Operating cash flows from operating leases		(56	)		(2	)

The following table summarizes the changes in accumulated other comprehensive loss by component, net of taxes, for the six months ended December 31, 2020:

Operating lease cost is reported as part of selling, general, and administrative expenses on the consolidated statements of operations. Sublease income is reported as a reduction of selling, general, and administrative expenses on the consolidated statements of operations. Operating cash flows from leases are reported as part of net income (loss) on the consolidated statements of cash flows. Right-of-use assets obtained in exchange for new operating lease liabilities are reported as part of other long-term assets on the consolidated balance sheets. The short-term portions of the operating lease liabilities are reported as part of accounts payable and accrued expenses on the consolidated balance sheets. The long-term portions of the operating lease liabilities are reported as part of other long-term liabilities on the consolidated balance sheets. The weighted-average remaining lease term for operating leases as of September 30, 2020 is 42 months. The weighted-average annual discount rate used for operating leases as of September 30, 2020 is 7.4%.

	Pension and Postretirement Benefit Plans			Currency Translation Adjustments			Unrealized Loss on Investments			Total

	(Amounts in thousands)
Balance at June 30, 2020	$	(1,517	)	$	523		$	(5,212	)	$	(6,206	)
Other comprehensive income (loss)		44			(379	)		4,178			3,843
Effect of deferred taxes on unrealized losses		-			-			(942	)		(942	)
Effect of exchange rates on the pension plans		(138	)		138			-			-
Net current period other comprehensive (loss) income		(94	)		(241	)		3,236			2,901
Balance at December 31, 2020	$	(1,611	)	$	282		$	(1,976	)	$	(3,305	)

At13. ~~September 30, 2020, lease payments for operating leases for the next five years are as follows (amounts in thousands):~~Segments

Fiscal Year Ending June 30	Amount
2021	$	192
2022		257
2023		123
2024		79
2025		81

We operate in two segments: (i) “MCA and Other Financial Services Operations,” conducted primarily through LMCS, and (ii) “Real Estate Operations,” conducted primarily through Recur.

~~The~~Our ~~total~~President ~~lease~~and ~~liability~~Chief onOperating Officer (“COO”) is our chief operating decision maker (the ~~consolidated~~“CODM”). Our CODM uses revenue and operating income ~~balance~~to ~~sheets~~evaluate asthe profitability of ~~September~~our ~~30,~~operating ~~2020~~segments; all other financial information is ~~$727,000~~reviewed by the CODM on a consolidated basis. ~~Total~~Segment ~~unrecognized~~operating ~~expected~~contribution ~~interest~~reflects ~~expense~~segment ~~related~~revenue, toless ~~leases~~operating isexpenses ~~$73~~that are directly attributable to the operating segment,~~000~~ not including corporate and unallocated expenses. All of our principal operations and assets are located in the United States.

~~14.~~Segment ~~Commitments~~operating ~~and~~results ~~Contingencies~~are ~~and~~as ~~Related~~follows (amounts ~~Party~~in ~~Transactions~~thousands):

~~Commitments and Contingencies~~21

~~Severance~~CCUR ~~Arrangements~~HOLDINGS, INC.

OnNOTES ~~October~~TO 1,CONSOLIDATED ~~2020~~FINANCIAL (the “Separation Date”), the Company and Warren Sutherland, the Company’s Chief Financial Officer, mutually agreed to terminate Mr. Sutherland’s employment with the Company. In connection with the termination, on October 1, 2020, the Company and Mr. Sutherland entered into a severance and general release agreement (the “Separation Agreement”). Mr. Sutherland will provide transition services as a consultant to the Company from the Separation Date until December 31, 2020 (the “Transition Period”). Mr. Sutherland will receive severance payments totaling $290,625, paid in bi-weekly equal installments for a period of fifteen months, and the Company’s contribution towards his health and welfare benefits. In addition, the Company will accelerate vesting of Mr. Sutherland’s outstanding restricted stock awards such that a total of 36,673 shares of restricted stock will become vested upon completion of the Transition Period. The Separation Agreement contains customary confidentiality provisions and a mutual release of claims between the Company and Mr. Sutherland. Mr. Sutherland will be subject to customary non-solicitation and non-competition covenants for a period of fifteen months.STATEMENTS

	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019
Segment revenue:
Advance income	$	927		$	990		$	1,466		$	1,795
Syndication fees		85			388			214			938
Interest on loans to Funders		105			235			253			439
Other MCA revenue		34			62			34			155
MCA and other financial services operations revenues		1,151			1,675			1,967			3,327
Real estate operations revenues		46			112			140			191
Consolidated revenues		1,197			1,787			2,107			3,518

Segment operating expenses:
Selling, general, and administrative		41			369			233			723
Change in fair value of contingent consideration		-			(470	)		-			(370	)
Amortization of purchased intangibles		96			119			193			239
Provision for credit losses on advances		13,775			181			13,827			396
MCA and other financial services operations		13,912			199			14,253			988
Real estate operations		-			-			-			-
Add:
Corporate expenses		1,161			997			2,054			1,888
Consolidated operating expenses		15,073			1,196			16,307			2,876

Segment operating (loss) income:
MCA and other financial services operations		(12,761	)		1,476			(12,286	)		2,339
Real estate operations		46			112			140			191
Add:
Corporate		(1,161	)		(997	)		(2,054	)		(1,888	)
Consolidated operating (loss) income	$	(13,876	)	$	591		$	(14,200	)	$	642

~~CCUR~~Segment ~~HOLDINGS, INC.~~assets are as follows:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	December 31, 2020			June 30, 2020

	(Amounts in thousands)
Segment assets:
MCA and other financial services	$	5,353		$	19,287
Real estate		17,497			9,275
Add:
Corporate assets		44,175			48,065
Corporate intercompany loan to LMCS		(2,136	)		(6,777	)
Total consolidated assets	$	64,889		$	69,850

~~Pursuant to the terms of the employment agreement with our President and COO, employment may be terminated either by the employee or by the Company at any time~~14. In the event the agreement is terminated by us without cause, or in certain circumstances terminates constructively or expires, our President and COO will receive severance compensation for a period of six months. Additionally, if terminated, our President and COO will continue to receive the employer portion of health coverage during the severance period. At September 30, 2020, the maximum contingent liability under this agreement was $98,830.Leases

~~Inadvertent~~The ~~Investment~~Company leases office space in Duluth, Georgia. The Duluth, Georgia lease expires in 2025. For leases with a term of 12 months or less, we made an accounting policy election not to recognize lease assets and lease liabilities. During the three months ended December 31, 2020, the Company terminated its lease in New York New York, and forfeited its $46,000 security deposit related to that lease. The following information represents the amounts included in the financial statements related to leases (amounts in thousands):

We do not believe that we are engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in the business of investing, reinvesting, or trading in securities. However, with the assistance of the Asset Manager, as defined below, we hold excess liquid resources in marketable securities to preserve resources needed to acquire operating businesses or assets and fund our finance and real estate activities. The Board of Directors and management monitor the Company’s status relative to the inadvertent investment company test under the Investment Company Act of 1940 (the “ICA”) and believe that the Company is not, and as of September 30, 2020 was not, an inadvertent investment company based on the assets test under Section 3(a)(1)(C) of the ICA.22

IfCCUR ~~we were deemed to be an inadvertent investment company and determined to or were required to become a registered investment company~~HOLDINGS, we would be subject to burdensome and costly compliance requirements and restrictions that would limit our activities, including limitations on our capital structure, additional corporate governance requirements, and other limitations on our ability to transact business as currently conducted INC. We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company. To avoid being deemed an inadvertent investment company or becoming a registered investment company, we may decide or be required to sell certain of our investments on disadvantageous terms, hold a greater proportion of our investments in marketable securities in U.S. government securities or cash equivalents that have a lower rate of return than other investment securities, or make other material modifications to our business operations and strategy, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and future prospects.

~~Related~~NOTES ~~Party~~TO ~~Transactions~~CONSOLIDATED FINANCIAL STATEMENTS

Management Agreement

	Three Months Ended December 31,						Six Months Ended December 31,
	2020			2019			2020			2019
Operating lease cost	$	(25	)	$	54		$	34		$	109

Gross sublease income		-			48			4			100
Operating cash flows from operating leases		(19	)		(6	)		(74	)		(9	)

InOperating ~~February~~lease ~~2019,~~cost ~~the~~is ~~Company~~reported ~~entered~~as ~~into~~part aof ~~management~~selling, ~~agreement~~general, ~~with~~and ~~CIDM~~administrative ~~LLC~~expenses (on the ~~“Prior~~consolidated ~~Asset~~statements ~~Manager”)~~of ~~under~~operations. ~~which~~Sublease ~~CIDM~~income ~~LLC~~is ~~provides~~reported ~~consulting~~as ~~services~~a reduction of selling, general, and ~~advice~~administrative toexpenses on the ~~Board~~consolidated statements of ~~Directors~~operations. ~~and~~Operating ~~the~~cash ~~Company’s~~flows ~~management~~from leases ~~regarding~~are ~~asset~~reported ~~allocation~~as ~~and~~part ~~acquisition~~of ~~strategy~~net income (loss) on the consolidated statements of cash flows. ~~During our~~Right-of-use ~~fiscal~~assets ~~year~~obtained ~~2020,~~in exchange ~~the~~for ~~management~~new ~~agreement~~operating ~~was~~lease ~~assigned~~liabilities toare ~~CIDM~~reported ~~II,~~as ~~LLC~~part ~~(“CIDM~~of ~~II,”~~other orlong-term assets on the ~~“Asset~~consolidated ~~Manager”)~~balance sheets. ~~CIDM~~The IIshort-term ~~exclusively~~portions ~~manages~~of the ~~Company’s~~operating ~~portfolio~~lease ofliabilities ~~publicly~~are ~~traded~~reported ~~investments~~as part of accounts payable and, ~~subject~~accrued toexpenses on the consolidated ~~terms~~balance sheets. The long-term portions of the ~~management agreement~~operating ~~and~~lease ~~the~~liabilities ~~guidelines~~are ~~set~~reported ~~forth~~as ~~therein,~~part ~~maintains~~of ~~investment~~other ~~authority~~long-term liabilities ~~over~~on ~~such~~the ~~portfolio,~~consolidated inbalance ~~order~~sheets. toThe ~~better~~weighted-average ~~position the~~remaining ~~Company~~lease toterm ~~increase~~for ~~its~~operating ~~return~~leases onas ~~assets~~of December 31, 2020 is 54 months. ~~CIDM~~The IIweighted-average isannual andiscount ~~affiliate~~rate ofused ~~the~~for ~~Company’s~~operating ~~largest~~leases ~~stockholder,~~as ~~JDS1~~of December 31, ~~LLC~~2020 is 6.5%.

~~Under~~As ~~the terms~~ of ~~the management agreement~~December 31, ~~the~~ ~~Company pays the Asset Manager both (i) an asset management fee on a quarterly basis~~2020, ~~based~~lease ~~upon the total assets of the Company,~~payments ~~and~~for ~~(ii)~~operating anleases ~~annual~~for ~~performance fee, based upon calendar year asset growth. Both~~ the ~~management~~next ~~fee~~five ~~and~~years ~~performance~~are ~~fee~~as ~~were~~follows ~~settled through~~(amounts ~~the~~in ~~issuance of cash-settled SARs with a base price of $0.01 per share.~~thousands):

On June 4, 2020, the Company entered into an “Omnibus Amendment Regarding the Management Agreement and SARs Agreements” (the “Omnibus Amendment”) by and among the Company, the Asset Manager and the Prior Asset Manager amending certain terms of the original management agreement, dated as of February 14, 2019 (the “Management Agreement”), by and between the Company and the Prior Asset Manager, including the form of SARs agreement (the “Form of SARs Agreement”), and the SARs agreements entered into pursuant to the Management Agreement between the Company and the Prior Manager (the “Prior SARs Agreements”). Pursuant to the Management Agreement, the Asset Manager, among other things, (i) provides the Company with advisory services with respect to the management and allocation of the assets of the Company and its subsidiaries, and (ii) exercises discretionary management authority over the Company’s trading portfolio of publicly traded securities.

Fiscal Year Ending June 30	Amount
2021	$	37
2022		75
2023		77
2024		79
2025		81

22The total lease liability on the consolidated balance sheets as of December 31, 2020 is $367,000. Total unrecognized expected interest expense related to leases is $46,000.

~~CCUR HOLDINGS, INC~~15. Commitments and Contingencies and Related Party Transactions

~~NOTES~~Commitments TOand ~~CONSOLIDATED FINANCIAL STATEMENTS~~Contingencies

~~The~~Severance ~~Omnibus Amendment amended the terms of the Management Agreement to provide that:~~Arrangements

~~(i)~~Pursuant to the ~~Management~~terms ~~Fee~~of ~~(as~~the ~~defined~~employment agreement inwith ~~the~~our ~~Management~~President ~~Agreement)~~and ~~due~~COO, toemployment may be terminated either by the ~~Asset~~employee ~~Manager~~or ~~shall~~by ~~continue~~the toCompany beat ~~payable~~any ~~via~~time. aIn ~~grant~~the event ofthe ~~SARs~~agreement ~~for~~is ~~services~~terminated ~~rendered~~by ~~through~~us ~~the~~without ~~quarter~~cause, ~~ending~~or ~~June~~in 30certain circumstances terminates constructively or expires, ~~2020~~our President and COO will receive severance compensation for a period of six months. ~~Thereafter~~Additionally, ~~the~~if ~~Management~~terminated, ~~Fee~~our ~~shall~~President beand ~~payable~~COO inwill continue ~~cash.~~to ~~The~~receive ~~Performance~~the ~~Fee~~employer ~~(as~~portion ~~defined~~of inhealth coverage during the ~~Management~~severance ~~Agreement)~~period. ~~shall~~As ~~continue~~of toDecember 31, be2020, ~~payable~~the inmaximum contingent ~~SARs;~~liability under this agreement was $99,000.

~~(ii) the cash value of a SAR grant for the purpose of determining the amount by which it reduces the fees payable under the Management Agreement shall equal $3.50 per SAR; and~~23

~~(iii)~~CCUR ~~the value of the assets on which the Management Fee and Performance Fee are based shall be adjusted to exclude any deferred tax assets of the Company~~HOLDINGS, INC.

~~The~~NOTES ~~Omnibus~~TO ~~Amendment~~CONSOLIDATED ~~also~~FINANCIAL affects the assignment of the Prior SARs Agreements from the Prior Manager to the Asset Manager and amends the Prior SARs Agreements and the Form of SARs Agreement, pursuant to which SARs will be granted to the Asset Manager in the future, in each case, to provide that SARs granted thereunder are exercisable as of the date of grant, subject to any restrictions in the applicable agreement.STATEMENTS

~~Prior~~Inadvertent toInvestment ~~this Omnibus Amendment, the~~ Company granted 797,446 SARs, to be settled in cash, to the Prior Manager, as compensation for the Management Fee and the calendar year 2019 Performance Fee, with a base price of $0.01 per share, that were earnable upon completion of both service and performance conditions. The service condition was completed each quarter as the asset management services were provided, and annually upon calculation of the Performance Fee. The vesting performance condition required the Company to undergo a qualifying change of control before the SARs are exercisable by the Prior Asset Manager. As such, because a qualifying change of control had neither occurred nor become probable before the Omnibus Amendment, the Company did not record expense attributable to the granted SARs.

~~The~~We ~~Omnibus~~do ~~Amendment~~not ~~modified~~believe ~~the~~that ~~granted SARs’~~we ~~and~~are ~~future~~engaged ~~SAR grants’ vesting criteria by removing~~ in the ~~performance~~business ~~condition~~ of ainvesting, ~~qualifying~~reinvesting, ~~change~~or oftrading ~~control so~~in ~~that~~securities, ~~SARs~~and ~~are~~we ~~exercisable~~do ~~upon~~not ~~grant.~~hold ~~With~~ourselves ~~this~~out ~~modification,~~as ~~the~~being ~~Company~~engaged ~~recorded~~in ~~$2,552,000 of compensation expense during~~ the ~~fourth quarter~~ business of ~~our~~investing, ~~fiscal~~reinvesting, ~~year~~or ~~2020~~trading ~~attributable~~in ~~to SARs for which vesting was previously subject to a qualifying change of control~~securities. ~~Additionally~~However, with the ~~Company~~assistance ~~recorded $289,000~~ of ~~expense during~~ the ~~three~~Asset ~~months~~Manager, ~~ended~~as ~~June~~defined 30below, ~~2020~~we ~~for~~hold excess ~~the~~liquid ~~90,310~~resources ~~cash-settled SARs~~in ~~that~~marketable itsecurities ~~granted~~ to ~~the~~preserve ~~Asset~~resources ~~Manager~~needed ~~during~~to ~~the~~acquire ~~three~~operating ~~months~~businesses ~~ended~~or ~~September~~assets ~~30,~~and ~~2020 as compensation for the Management Fee~~fund ~~during~~our ~~the~~finance ~~three~~and ~~months~~real ~~ended~~estate ~~June 30, 2020~~activities. ~~During~~The ~~the~~Board ~~three~~of ~~months~~Directors ~~ended~~and ~~September~~management ~~30,~~monitor ~~2020,~~ the Company’s ~~also~~status ~~recorded~~relative ~~$316,000~~to the ofinadvertent ~~expense~~investment ascompany ~~compensation~~test ~~for~~under the ~~Management~~Investment ~~Fee~~Company ~~during~~Act of 1940 (the ~~three~~“ICA”) ~~months~~and ~~ended~~believe ~~September~~that ~~30,~~the ~~2020.~~Company is $3not,~~059,000~~ and ~~$2,841,000 are accrued~~ as ~~management~~of ~~fee~~December 31, ~~payable~~2020 onwas ~~our~~not, ~~consolidated~~an ~~balance~~inadvertent ~~sheets~~investment ascompany ofbased ~~September~~on ~~30,~~the ~~2020~~assets ~~and~~test ~~June~~under ~~30,~~Section 3(a)(1)(C) of the ~~2020, respectively~~ICA.

~~Other~~If ~~Fees~~we ~~Paid~~were deemed to ~~the~~be ~~Asset~~an ~~Manager~~inadvertent investment company and determined to or were required to become a registered investment company, we would be subject to burdensome and costly compliance requirements and restrictions that would limit our activities, including limitations on our capital structure, additional corporate governance requirements, and other limitations on our ability to transact business as currently conducted. We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company. To avoid being deemed an inadvertent investment company or becoming a registered investment company, we may decide or be required to sell certain of our investments on disadvantageous terms, hold a greater proportion of our investments in marketable securities in U.S. government securities or cash equivalents that have a lower rate of return than other investment securities, or make other material modifications to our business operations and strategy, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and future prospects.

InRelated ~~addition~~Party ~~to the SARs-settled Management and Performance Fees and the cash Management Fees, the Company provides the Asset Manager with $50,000 per quarter for the purpose of expense reimbursements.~~Transactions

~~15.~~Management ~~Subsequent Events~~Agreement

~~Spartacus~~In ~~initial~~February 2019, ~~public~~the ~~offering~~Company entered into a management agreement with CIDM LLC (the “~~IPO~~Prior Asset Manager”) under which CIDM LLC provides consulting services and advice to the Board of Directors and the Company’s management regarding asset allocation and acquisition strategy. During our fiscal year 2020, the management agreement was assigned to CIDM II, LLC (“CIDM II,” or the “Asset Manager”). CIDM II exclusively manages the Company’s portfolio of publicly traded investments and, subject to the terms of the management agreement and the guidelines set forth therein, maintains investment authority over such portfolio, in order to better position the Company to increase its return on assets. CIDM II is an affiliate of the Company’s largest stockholder, JDS1, LLC.

OnUnder ~~October~~the ~~19,~~terms ~~2020,~~of the ~~Company’s affiliate~~management agreement, the ~~Spartacus~~Company ~~Acquisition~~pays ~~Corporation~~the ~~(“Spartacus”),~~Asset ~~completed~~Manager ~~its~~both ~~IPO.~~(i) an Inasset ~~connection~~management ~~with~~fee ~~the~~on ~~IPO,~~a ~~Spartacus Sponsor~~quarterly ~~LLC~~basis, ofbased ~~which~~upon the ~~Company~~total isassets aof ~~Managing~~the Company, ~~Member~~ and ~~holds~~(ii) an ~~50%~~annual ~~voting~~performance ~~control~~fee, ~~purchased~~based ~~8,104,244~~upon ~~warrants~~calendar atyear aasset ~~price of $1~~growth.00 ~~per~~Both ~~warrant.~~the ~~Each~~management ~~warrant~~fee isand ~~exercisable~~performance fee ~~into~~were ~~one~~settled ~~share~~through ofthe ~~Spartacus’~~issuance ~~Class~~of Acash-settled ~~common~~SARs ~~stock~~with at a base price of $110.5001 per share. Spartacus is a newly organized blank-check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which is referred to as an initial business combination.

On June 4, 2020, the Company entered into an “Omnibus Amendment Regarding the Management Agreement and SARs Agreements” (the “Omnibus Amendment”) by and among the Company, the Asset Manager and the Prior Asset Manager amending certain terms of the original management agreement, dated as of February 14, 2019 (the “Management Agreement”), by and between the Company and the Prior Asset Manager, including the form of SARs agreement (the “Form of SARs Agreement”), and the SARs agreements entered into pursuant to ~~Amended~~the Management Agreement between the Company and the Prior Manager (the “Prior SARs Agreements”). Pursuant to the Management Agreement, the Asset Manager, among other things, (i) provides the Company with advisory services with respect to the management and allocation of the assets of the Company and its subsidiaries, and (ii) exercises discretionary management authority over the Company’s trading portfolio of publicly traded securities.

OnThe ~~October~~Omnibus ~~15,~~Amendment ~~2020, the Company~~ amended ~~the~~ ~~Management Agreement to align~~ the ~~Performance~~terms ~~Fee,~~of ~~as that term is defined in~~ the Management Agreement, ~~with the Company’s fiscal year, as opposed~~ to ~~the~~provide ~~calendar year.~~that:

~~Termination~~(i) the Management Fee (as defined in the Management Agreement) due to the Asset Manager shall continue to be payable via a grant of ~~New~~SARs ~~York~~for ~~office~~services ~~lease agreement~~rendered through the quarter ending June 30, 2020. Thereafter, the Management Fee shall be payable in cash. The Performance Fee (as defined in the Management Agreement) shall continue to be payable in SARs;

On(ii) ~~October~~the ~~30,~~cash ~~2020,~~value ~~the~~of ~~Company~~a ~~terminated its~~SAR ~~New~~grant ~~York~~for ~~office~~the ~~lease~~purpose ~~agreement~~of ~~(See~~determining ~~Note~~the ~~13).~~amount Inby ~~connection~~which ~~with~~it reduces the ~~termination~~fees ~~agreement,~~payable under the ~~Company~~Management ~~agreed~~Agreement toshall ~~forfeit its~~equal ~~security~~$3.50 ~~deposit~~per ofSAR; ~~$46,000.~~and

2324

~~Item~~CCUR 2HOLDINGS, INC. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~The~~NOTES ~~following~~TO ~~Management’s~~CONSOLIDATED ~~Discussion and~~FINANCIAL Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and the related notes thereto, which appear elsewhere herein. Except for statements of historical facts, many of the matters discussed in this Item 2 are considered “forward-looking” statements that reflect our plans, estimates and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section below entitled “Cautionary Statement Regarding Forward-Looking Statements,” in the section below entitled “Item 1A. Risk Factors,” and in other filings made with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended June 30, 2020.STATEMENTS

~~References~~(iii) ~~herein~~the tovalue ~~“CCUR~~of ~~Holdings,”~~ the ~~“Company,”~~assets ~~“we,”~~on ~~“us,”~~which orthe ~~“our”~~Management ~~refer~~Fee toand ~~CCUR~~Performance ~~Holdings,~~Fee ~~Inc.~~are ~~and~~based ~~its~~shall ~~subsidiaries, unless~~be ~~the~~adjusted ~~context~~to ~~specifically~~exclude ~~indicates~~any ~~otherwise~~deferred tax assets of the Company.

~~Overview~~The Omnibus Amendment also affects the assignment of the Prior SARs Agreements from the Prior Manager to the Asset Manager and amends the Prior SARs Agreements and the Form of SARs Agreement, pursuant to which SARs will be granted to the Asset Manager in the future, in each case, to provide that SARs granted thereunder are exercisable as of the date of grant, subject to any restrictions in the applicable agreement.

AsPrior ofto ~~September~~this 30Omnibus Amendment, ~~2020~~the Company granted 797,446 weSARs, ~~operate~~to ~~with~~be settled in cash, to the Prior Manager, as compensation for the Management Fee and the calendar year ~~two~~2019 ~~business~~Performance ~~segments:~~Fee, ~~(i)~~with ~~merchant~~a ~~cash~~base ~~advances~~price ~~(“MCA”)~~of $0.01 per share, that were earnable upon completion of both service and ~~other~~performance conditions. ~~financial~~The service condition was completed each quarter as the asset management services were provided, ~~conducted~~and ~~primarily~~annually ~~through~~upon ~~our~~calculation ~~subsidiary~~of LMthe ~~Capital~~Performance ~~Solutions,~~Fee. ~~LLC~~The ~~(d/b/~~vesting performance condition required the Company to undergo a ~~“LuxeMark~~qualifying ~~Capital”)~~change ~~(“LMCS”),~~of ~~and~~control before ~~(ii)~~the ~~real~~SARs ~~estate~~are exercisable by the Prior Asset Manager. As such, ~~conducted~~because a qualifying change of control had neither occurred ~~through~~nor ~~our~~become ~~subsidiary~~probable ~~Recur~~before ~~Holdings~~the ~~LLC~~Omnibus ~~(“Recur”)~~Amendment, ~~and~~the ~~its~~Company ~~subsidiaries~~did not record expense attributable to the granted SARs.

AsThe ofOmnibus ~~September~~Amendment ~~30,~~modified ~~2020,~~the wegranted SARs’ ~~hold~~and afuture ~~51% interest~~SAR ingrants’ ~~LMCS,~~vesting ~~with~~criteria ~~the~~by ~~remaining~~removing ~~49%~~the ~~held~~performance bycondition ~~AZOKKB,~~of ~~LLC~~a ~~(formerly~~qualifying ~~named~~change ~~LuxeMark~~of ~~Capital,~~control so ~~LLC~~that ~~and~~SARs ~~herein~~are ~~referenced~~exercisable asupon ~~“Old LuxeMark”)~~grant. ~~Through~~With ~~LMCS~~this modification, wethe ~~manage~~Company arecorded ~~network~~$2,552,000 of ~~MCA~~compensation ~~funders~~expense (during the ~~“Funders”)~~fourth ~~and~~quarter ~~syndicate~~of ~~participants~~our ~~who~~fiscal ~~provide those~~year ~~Funders~~2020 ~~with~~attributable ~~capital~~to bySARs ~~purchasing~~for ~~participation~~which ~~interests~~vesting inwas orpreviously ~~co-funding~~subject ~~MCA~~to ~~transactions.~~a Inqualifying ~~addition~~change of control. Additionally, wethe ~~provide~~Company ~~loans to~~recorded ~~Funders~~$289,000 of expense during the ~~proceeds~~three ofmonths ~~which~~ended ~~are~~June ~~used~~30, by2020 for the ~~Funders~~90,310 tocash-settled SARs ~~fund~~that ~~MCAs.~~it ~~LMCS’~~granted ~~daily~~to ~~operations~~the ~~are~~Asset ~~led~~Manager byduring the three ~~principals of~~months ~~Old~~ended ~~LuxeMark.~~September ~~CCUR~~30, ~~provides~~2020 ~~operational,~~as ~~accounting,~~compensation ~~and~~for ~~legal~~the ~~support~~Management toFee during ~~LMCS.~~the Onthree ~~July~~months 17ended June 30, 2020,. weDuring ~~entered~~the ~~into~~three aand ~~series~~six ~~of agreements~~months ~~with~~ended ~~Old~~December ~~LuxeMark~~31, ~~pursuant~~2020, tothe ~~which~~Company ~~our~~also ~~interest~~recorded $287,000 inand ~~LMCS~~$603,000, ~~was~~respectively, ~~reduced~~of ~~from~~expense ~~80%~~as tocompensation ~~51%.~~for ~~After~~ the ~~repayment~~Management ofFee, ~~the~~and ~~outstanding~~$116,000 and $214,000, respectively, ~~balance~~of reductions of aexpense ~~master~~related ~~promissory~~to ~~note~~revaluation of previously issued bySARs. ~~LMCS~~These toexpenses ~~us,~~are ~~Old~~included ~~LuxeMark~~in ~~has~~selling, ~~the~~general, ~~right~~and administrative toexpenses ~~purchase~~on the ~~remaining~~consolidated ~~51%~~statements ~~equity~~of ~~interest in~~operations. ~~LMCS~~$2,915,000 ~~for~~and ~~nominal~~$2,841,000 ~~consideration.~~are Weaccrued ~~are~~as ~~reviewing~~management fee payable on our ~~strategic~~consolidated ~~options~~balance ~~with~~sheets ~~respect~~as toof ~~continued~~December ~~participation~~31, in2020 ~~the~~and ~~MCA~~June ~~industry~~30, 2020, respectively.

~~Recur~~On ~~provides~~October 15, ~~commercial~~2020, ~~loans~~the toCompany ~~local,~~amended ~~regional,~~the ~~and~~Management ~~national~~Agreement ~~builders,~~to ~~developers,~~align ~~and~~the ~~commercial~~Performance ~~landowners~~Fee, ~~and~~as ~~also~~that ~~acquires,~~term ~~owns,~~is ~~and~~defined ~~manages~~in athe ~~portfolio~~Management ofAgreement, ~~real property~~with ~~for~~the ~~development.~~Company’s fiscal ~~Recur~~year, ~~does~~as ~~not~~opposed ~~provide~~to ~~consumer~~the ~~mortgages~~calendar year.

InOther ~~addition~~Fees toPaid our real estate and MCA and other financial services operating segments, we actively evaluate acquisitions of additional businesses or operating assets, either as part of an expansion of our current operating segments or establishment of a new operating segment, in an effort to ~~reinvest~~ the ~~proceeds~~Asset of our calendar year 2017 business dispositions and maximize use of other assets such as our net operating loss (“NOL”) carryforwards. We may also seek additional capital and financing to support the purchase of additional businesses and/or to provide additional working capital to further develop our operating segments. We believe that these activities will enable us to identify, acquire, and grow businesses and assets that will maximize value for all our stockholders.Manager

~~Recent~~In ~~Events~~addition to the SARs-settled Management and Performance Fees and the cash Management Fees, the Company provides the Asset Manager with $50,000 per quarter for the purpose of expense reimbursements.

24CCUR HOLDINGS, INC.

~~Our~~NOTES ~~MCA~~TO ~~and~~CONSOLIDATED ~~other~~FINANCIAL financial services segment experienced a decline in revenues during the three months ended September 30, 2020, which management believes is predominantly due to the economic uncertainties caused by the pandemic, and we anticipate our MCA revenues will continue to be adversely affected while major parts of the U.S. economy are restricted by mandatory business shut-downs and/or stay-at-home orders, as well as other effects of the pandemic. We and our finance partners decreased our volume of new funding arrangements while evaluating the effect of the current economic uncertainties on the MCA business and its customers during the three months ended September 30, 2020. During the fourth quarter of our fiscal year 2020, management concluded that it would not resume funding MCAs with Funders and would focus our MCA efforts exclusively on MCA syndication fee income generated by our LMCS business unit. Our reduced participation in MCA funding through Funders reduces our syndication fee income and revenue from direct funding of MCAs. We anticipate continued lower funding of new MCAs and reduced collection volume on outstanding MCAs until the economic situation caused by the pandemic stabilizes and a greater level of economic activity returns. Additionally, while Funders modified their underwriting criteria during the fourth quarter of our fiscal year ended June 30, 2020 and focused new funding on businesses that have been deemed “essential services” during the pandemic, it remains to be seen whether essential businesses will pursue MCAs at levels sufficient to offset the declines in MCA collections for the foregoing reasons.STATEMENTS

~~On July 17, 2020, LMCS entered into a series of transactions resulting in its recapitalization~~16. ~~The~~Subsequent transactions included an amendment to the operating agreement of LMCS that reduced our ownership from 80% to 51% of LMCS and the grant by us to LMCS’ non-controlling member of a right to purchase our remaining equity interests in LMCS upon the occurrence of certain conditions, including, without limitation, the repayment of an intercompany note from us to LMCS. The transaction also included (i) the waiver of LMCS’ obligations to pay contingent consideration to the non-controlling member, (ii) the termination of certain warrants to purchase our capital stock held by certain affiliates of the non-controlling member, (iii) the assignment of certain contractual rights of LMCS to the non-controlling member, and (iv) the amendment of an intercompany note from us to LMCS. All conditions required for the non-controlling member to have the right to repurchase LMCS have been met as of the filing date of this report, with the exception of the repayment of the intercompany note.Events

~~Our~~Wright ~~real~~Brothers ~~estate-related~~Aircraft ~~revenues have continued to remain stable during the three months ended September 30~~Title, ~~2020 and we believe that our real estate borrowers will continue to be able to service their real estate loans~~Inc. ~~We continue to develop real estate for future sale. While we do not believe that any~~ of(“Wright ~~these projects warrant impairment charges or other reserves at this point, we do expect that the economic impact of the pandemic will result in a delay in the eventual sale of this real estate.~~Brothers”)

InSince August ~~2020~~2018, the weCompany ~~established~~has ~~CCUR Aviation~~been ~~Finance,~~providing ~~LLC,~~fully arefundable ~~wholly~~deposits ~~owned~~into ~~subsidiary~~the ~~through~~aircraft finance market, which weare ~~operate~~used ~~our~~during ~~aviation~~the ~~funding~~initial ~~business~~due diligence period for aircraft (“aviation deposits”). ~~Since~~The ~~August 2018~~Company has financed 12 transactions, we ~~have~~each ~~periodically~~of ~~funded~~which ~~aviation~~has ~~deposit~~utilized the ~~purchases~~services ~~for~~of aWright ~~fee~~Brothers, ~~and~~based wein ~~expect~~Oklahoma ~~this~~City, ~~business~~Oklahoma, toas ~~continue~~the ~~and~~escrow ~~grow~~agent. WePrior ~~have~~to ~~reported~~January 12, 2021, each aviation ~~income~~deposit ~~from~~funded ~~this~~by ~~business~~the ~~within~~Company ~~our~~had ~~MCA~~been ~~and~~collected ~~other~~under ~~financial~~the ~~services~~contractually ~~segment~~agreed upon terms.

~~Through~~On ~~most of the three months ended September~~January 12, 302021, ~~2020,~~the weCompany ~~have~~was ~~continued~~due to ~~actively~~collect ~~evaluate and engage with potential acquisition target candidates; however~~$8,500,000 ~~the~~in ~~pandemic has~~aviation ~~delayed~~deposits ~~our~~from ~~due~~Wright ~~diligence~~Brothers. ~~process~~Upon byinquiry ~~impeding our ability~~ to ~~participate~~Wright inBrothers ~~in-person visits~~ and following ~~physical~~repeated ~~tours~~unsuccessful ~~and~~attempts ~~complicating our ability~~ to ~~place~~contact ~~valuations~~it onor ~~targets~~its ~~given~~principal, ~~the~~Debbie ~~uncertainty~~Mercer-Erwin, in the ~~global~~Company ~~markets.~~learned Wethat ~~expect~~on ~~this~~or ~~uncertainty to continue~~about ~~over~~December 17, ~~the~~2020, ~~next few months~~Ms. Mercer-Erwin ~~Thus,~~had ~~while~~been wearrested ~~have~~by ~~not~~law ~~experienced~~enforcement ~~a significant slowing of merger~~ and ~~acquisition activity, any acquisitions~~ that weall ~~decide~~assets toof ~~pursue~~Wright ~~may~~Brothers ~~take~~had ~~longer to consummate~~been frozen.

~~Critical~~In ~~Accounting~~addition ~~Policies~~to ~~and~~the deposit ~~Estimates~~funds mentioned above, the Company was also due to collect a further $5,500,000 in aviation deposits from Wright Brothers on January 25, 2021.

~~The~~As ~~SEC~~reported ~~defines~~in ~~“critical~~an ~~accounting~~8-K ~~estimates”~~filed ason ~~those~~January ~~that require application of management’s most difficult~~26, ~~subjective~~2021, orthe ~~complex~~Company ~~judgments,~~has ~~often as~~been aunable ~~result of the need~~ to ~~make~~recover ~~estimates~~$13,761,000 ~~about the effect~~ of ~~matters~~aviation ~~that are inherently uncertain and may change in subsequent periods~~deposits. Our critical accounting policies and estimates are disclosed under the section “Application of Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

~~Results~~Based on an examination of ~~Operations~~all information currently available to the Company, the Company has determined that it is probable a loss has occurred related to its aviation deposits. Due to the limited information available and uncertainty related to the specific sources of recovery and their timing, the Company is unable to make the determination that any amount of recovery is probable. As a result, the Company’s Board of Directors and management determined on February 6, 2021 that the appropriate action is a full write-down of its aviation deposits during the three and six months ended December 31, 2020. The write-down is reported as part of provision for credit losses on advances on the consolidated statements of operations.

~~MCA~~The ~~and~~Company ~~other financial services~~expects ~~revenue~~to ~~includes~~aggressively ~~income~~pursue ~~from~~all ~~the~~remedies ~~discount~~for ~~at which we provide advances on future merchant receivables~~recovery, asincluding ~~well~~those asrelated ~~fees~~to ~~earned for~~insurance ~~sourcing both syndication capital~~ and ~~merchant~~actions ~~leads~~against ~~for~~all ~~Funders.~~parties Wethat ~~generate revenue from interest on loans by entering~~may ~~into~~have ~~commercial~~contributed ~~loan agreements~~ to ~~Funders~~the ~~and~~loss ~~third-party~~of ~~originators in~~ the ~~real~~aviation ~~estate industry~~deposits.

25Amendment to Management Agreement

~~Selling~~On January 6, ~~general~~2021, ~~and~~the ~~administrative~~Company ~~expenses~~amended ~~consist~~the ~~primarily~~Management ofAgreement ~~salaries,~~to ~~benefits,~~allow ~~rent,~~the ~~administrative~~Asset ~~personnel,~~Manager ~~information~~to ~~systems,~~choose ~~insurance,~~the ~~accounting,~~method ~~legal~~of ~~services, board~~payment of ~~director~~the ~~fees~~Management ~~and~~Fee ~~expenses,~~as ~~and~~either ~~other~~cash ~~professional~~or ~~services~~a grant of SARs.

~~Other~~Legal interest income is earned on cash overnight sweep accounts and money market deposits as well as investments in debt securities. Interest income also includes accretion of discounts related to transactions in which we purchased debt securities on the secondary markets at a discount. Such discounts are amortized over the terms of each debt security to the commitment values that will be due on each maturity date, as well as early repayment. Additionally, we earn payment-in-kind (“PIK”) interest from one of our debt securities whereby interest is paid in the form of an increase in the commitment value due from the debt security issuer on the maturity date.action

~~Three~~On ~~Months~~February ~~Ended~~9, ~~September 30~~2021, ~~2020~~LMCS was served with an action in ~~Comparison~~New toYork ~~the~~County, New York, alleging that LMCS was jointly liable for approximately $456,000, plus other costs and ~~Three~~interests, ~~Months~~under ~~Ended~~a ~~September~~contract 30entered into by LuxeMark, ~~2019~~LLC., from whom LMCS purchased certain assets.

Consolidated Revenues and Income. During the three months ended September 30, 2020, we generated $910,000 of total revenue, compared to $1,731,000 in the three months ended September 30, 2019, driven largely by our decreasing participation in the MCA industry. Our net income for the three months ended September 30, 2020 decreased to $389,000, compared to net income of $3,406,000 for the three months ended September 30, 2019. This decrease was primarily attributable to a reduction of our revenue, other interest income, realized gain on investments, and unrealized income on investments. This was offset by a decrease in operating expenses and an increase in other income, net.26

~~MCA~~Item ~~and Other Financial Services Segment Revenues~~2. WeManagement’s ~~generated~~Discussion ~~$816,000 of revenue from MCA~~ and ~~other~~Analysis financial services operations during the three months ended September 30, 2020, compared to $1,652,000 during the three months ended September 30, 2019. During the year ended June 30, 2020, management concluded that it would not resume funding MCAs with Funders . This resulted in a decrease of ~~MCA~~Financial ~~revenue~~Condition ~~during the current period. Our MCA~~ and ~~other~~Results ~~financial~~of ~~services operations revenues for the three months ended September 30, 2020 and 2019 are as follows:~~Operations

	Three Months Ended September 30,
	2020		2019
	(Amounts in thousands)
MCA and other financial services revenue	$	539	$	805
Syndication fee revenue		129		550
Fee income on MCA leads generation		-		93
MCA fees and other revenue		668		1,448
Interest on loans to MCA originators		148		204
Total MCA and other financial services operations segment revenue	$	816	$	1,652

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the consolidated financial statements and the related notes thereto, which appear elsewhere herein. Except for statements of historical facts, many of the matters discussed in this Item 2 are considered “forward-looking” statements that reflect our plans, estimates and beliefs. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section below entitled “Cautionary Statement Regarding Forward-Looking Statements,” in the section below entitled “Item 1A. Risk Factors,” and in other filings made with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K for the year ended June 30, 2020.

~~MCA~~References ~~revenue~~herein ~~from interest on loans~~ to ~~Funders~~“CCUR Holdings,” isthe ~~categorized~~“Company,” as“we,” ~~MCA~~“us,” ~~and~~or ~~other~~“our” ~~financial~~refer ~~services~~to ~~operations~~CCUR ~~revenue~~Holdings, Inc. ~~for~~and ~~segment~~its ~~reporting~~subsidiaries, unless ~~purposes but reported within~~ the ~~line item~~context ~~interest~~specifically onindicates ~~mortgage and commercial loans within our consolidated statements of operations~~otherwise.

Revenues from each of the revenue sources within our MCA segment decreased with the onset of the COVID-19 pandemic. We experienced declines of MCA revenues during the three months ended September 30, 2020. This occurred as (i) fewer merchants are meeting MCA underwriting criteria, which reduces our syndication fee income and ability to generate revenue by funding MCAs, (ii) underwriters are less interested in purchasing leads, and (iii) a portion of our merchants, in coordination with the Funders, have reduced or paused payments to better weather the current economic downturn, which reduces our MCA revenues. Furthermore, we reduced our volume of MCA funding during the three months ended September 30, 2020, primarily as a result of our efforts to better evaluate the impact of the pandemic on MCA assets before funding additional assets. We anticipate continued lower funding and collection volume over the next few months and are uncertain as to the long-term impact of the pandemic at this point. On July 17, 2020, we entered into a series of agreements with Old LuxeMark pursuant to which our interest in LMCS was reduced from 80% to 51%. After the repayment of the outstanding balance of the Master Promissory Note issued by LMCS to us, Old LuxeMark has the right to purchase the remaining 51% equity interest in LMCS for nominal consideration. We are reviewing our strategic options with respect to our continued participation in the MCA industry.Overview

26As of December 31, 2020, we operate with two business segments: (i) merchant cash advances (“MCA”) and other financial services, conducted primarily through our subsidiary LM Capital Solutions, LLC (d/b/a “LuxeMark Capital”) (“LMCS”), and (ii) real estate, conducted through our subsidiary Recur Holdings LLC (“Recur”) and its subsidiaries.

~~Real~~As ~~Estate~~of ~~Operations~~December 31, ~~Segment~~2020, ~~Revenues.~~we hold a We51% ~~generated~~interest ~~$94~~in LMCS,~~000~~ with the remaining 49% held by AZOKKB, LLC (formerly named LuxeMark Capital, LLC and herein referenced as “Old LuxeMark”). Through LMCS, we manage a network of ~~revenue~~MCA ~~from~~funders ~~interest~~(the on“Funders”) ~~commercial~~and ~~mortgage~~syndicate participants who provide those Funders with capital by purchasing participation interests in or co-funding MCA transactions. In addition, we provide loans ~~during~~to Funders, the proceeds of which are used by the Funders to fund MCAs. LMCS’ daily operations are led by the three ~~months~~principals ~~ended~~of ~~September~~Old 30LuxeMark. CCUR provides operational, accounting, and legal support to LMCS. On July 17, 2020, ~~compared~~we entered into a series of agreements with Old LuxeMark pursuant to ~~$79,000~~which ~~during~~our interest in LMCS was reduced from 80% to 51%. After the ~~three~~repayment of ~~months~~the ~~ended~~outstanding ~~September~~balance 30of a master promissory note issued by LMCS to us, ~~2019.~~Old ~~The~~LuxeMark ~~increase~~has the right to purchase the remaining 51% equity interest in ~~revenue~~LMCS ~~resulted~~for ~~from~~nominal ~~originations~~consideration. ~~outpacing~~We ~~borrower~~are reviewing our strategic options with respect to continued participation ~~repayments~~in the MCA industry.

~~Selling,~~Recur ~~General,~~provides ~~and~~commercial ~~Administrative Expenses.~~loans ~~Selling,~~to ~~general~~local, regional, and ~~administrative~~national ~~expenses~~builders, ~~were $1~~developers,~~085,000~~ ~~for~~and ~~the~~commercial ~~three~~landowners ~~months~~and ~~ended~~also ~~September 30~~acquires, ~~2020~~owns, aand ~~$249,000, or~~manages ~~18.7%,~~a ~~decrease~~portfolio ~~from~~of ~~the~~real property ~~$1,334,000~~ for ~~the three months ended September 30, 2019~~development. ~~Decreases~~Recur indoes ~~salaries~~not ~~and~~provide ~~benefits,~~consumer ~~offset by increases in stock appreciation rights (“SARs”) expense, accounting fees, and legal fees compared to the prior period caused the period-over-period decrease~~mortgages.

~~Selling,~~In ~~general,~~addition ~~and~~to ~~administrative~~our ~~expenses for~~real ~~our~~estate and MCA and other financial services ~~segment~~operating ~~were $192~~segments,~~000~~ ~~for~~we ~~the~~actively ~~three~~evaluate ~~months~~acquisitions ~~ended~~of ~~September~~additional ~~30,~~businesses ~~2020,~~or aoperating ~~$162~~assets,~~000,~~ ~~or 45.8%,~~either ~~decrease~~as ~~from~~part ~~the~~of ~~$354,000~~an ~~for~~expansion ~~the~~of ~~three~~our ~~months~~current ~~ended~~operating ~~September~~segments ~~30,~~or ~~2019.~~establishment ~~This~~of ~~decrease~~a ~~was~~new ~~caused~~operating bysegment, ~~decreases~~ in ~~commissions~~an effort to reinvest the proceeds of our calendar year 2017 business dispositions and ~~fees~~maximize ~~related~~use toof ~~the~~other ~~decrease~~assets insuch ~~MCA~~as ~~revenue~~our ~~during~~net ~~the~~operating ~~period~~loss (“NOL”) carryforwards. ~~There~~We ~~were~~may noalso ~~selling,~~seek ~~general,~~additional capital and ~~administrative~~financing ~~expenses~~to support the purchase of additional businesses and/or to provide ~~for~~additional working capital to further develop our ~~real~~operating ~~estate~~segments. ~~segment~~We inbelieve ~~either~~that ~~the~~these ~~three~~activities ~~months~~will ~~ended~~enable ~~September~~us 30to identify, acquire, ~~2020~~and orgrow ~~the~~businesses ~~three~~and ~~months~~assets ~~ended~~that ~~September~~will ~~30,~~maximize ~~2019~~value for all our stockholders.

~~Amortization~~Recent of Purchased Intangibles. Our amortization of purchased intangibles includes amortization over the respective useful lives of the trade name, non-competition agreements, and investor/originator relationships attributable to our acquisition of the assets of Old LuxeMark (the “LuxeMark Acquisition”). Our intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be fully recoverable. We acquired these intangibles as part of the LuxeMark Acquisition on February 13, 2019 and no impairments or circumstances requiring a testing of impairment of these intangible assets were identified as of or during the three months ended September 30, 2020.Events

~~Provision~~The ~~for~~global ~~Credit~~outbreak ~~Losses~~of onthe ~~Advances.~~novel coronavirus ~~During~~(“COVID-19”) ~~the~~was ~~three~~declared ~~months~~a ~~ended~~pandemic ~~September~~by ~~30,~~the ~~2020,~~World weHealth ~~recorded~~Organization and a ~~$52,000~~national ~~provision~~emergency ~~for~~by ~~credit~~the ~~losses~~U.S. ongovernment in ~~MCAs,~~March 2020 aand ~~$164,000,~~has ornegatively 75impacted the U.9%S. and global economy, disrupted global supply chains, resulted in significant ~~decrease~~travel ~~from~~and ~~the~~transport ~~$216~~restrictions,~~000~~ ~~for~~including ~~the~~mandated ~~three~~closures ~~months~~and ~~ended~~orders ~~September~~to 30“shelter-in-place,” ~~2019~~and created significant disruption of the financial markets. The ~~period~~extent of the impact of the COVID-~~over-period~~19 ~~decrease~~pandemic inon ~~provision~~our ~~expense resulted~~operational ~~from~~and ~~decreases~~financial inperformance will ~~the~~depend ~~MCAs~~on ~~funded~~future indevelopments, including the ~~current~~duration ~~period~~and ~~versus~~spread of the ~~prior~~pandemic ~~period.~~and ~~MCA~~related ~~funding~~actions ~~activity~~taken ~~decreased~~by ~~during~~ the ~~period~~U.S. ~~primarily~~government, state asand alocal ~~result~~government ofofficials, ~~our~~and ~~efforts~~international governments to ~~better~~prevent ~~evaluate~~disease ~~the~~spread, ~~impact~~all of ~~the~~which ~~pandemic~~are onuncertain ~~MCA~~and ~~assets before funding additional~~cannot ~~assets~~be predicted.

Other Interest Income. Other interest income includes interest earned on investments in debt securities and cash and money market balances. The components of our interest income for the three months ended September 30, 2020 and 2019 are as follows:27

	Three Months Ended September 30,
	2020		2019
	(Amounts in thousands)
Interest from cash deposits and debt securities	$	500	$	717
Accretion of discounts on purchased debt securities		604		1,176
Payment-in-kind interest		256		244
Other interest income	$	1,360	$	2,137

Our MCA and other financial services segment experienced a decline in revenues during the three and six months ended December 31, 2020, which management believes is predominantly due to the economic uncertainties caused by the pandemic, and we anticipate our MCA revenues will continue to be adversely affected while major parts of the U.S. economy are restricted by mandatory business shutdowns and/or stay-at-home orders, as well as other effects of the pandemic. We and our finance partners decreased our volume of new funding arrangements while evaluating the effect of the current economic uncertainties on the MCA business and its customers during the three and six months ended December 31, 2020. During the fourth quarter of our fiscal year 2020, management concluded that it would not resume funding MCAs with Funders and would focus our MCA efforts exclusively on MCA syndication fee income generated by our LMCS business unit. Our reduced participation in MCA funding through Funders reduces our syndication fee income and revenue from direct funding of MCAs. We anticipate continued lower funding of new MCAs and reduced collection volume on outstanding MCAs until the economic situation caused by the pandemic stabilizes and a greater level of economic activity returns. Additionally, while Funders modified their underwriting criteria during the fourth quarter of our fiscal year ended June 30, 2020 and focused new funding on businesses that have been deemed “essential services” during the pandemic, it remains to be seen whether essential businesses will pursue MCAs at levels sufficient to offset the declines in MCA collections for the foregoing reasons.

~~Other~~On ~~interest~~July 17, ~~income~~2020, ~~for~~LMCS entered into a series of transactions resulting in its recapitalization. The transactions included an amendment to the ~~three~~operating ~~months~~agreement of ~~ended~~LMCS ~~September~~that ~~30,~~reduced ~~2020~~our ~~decreased~~ownership from 80% to 51% of LMCS and the grant by ~~$777~~us to LMCS’ non-controlling member of a right to purchase our remaining equity interests in LMCS upon the occurrence of certain conditions,~~000~~ including, orwithout ~~36.4%~~limitation, ~~compared~~the repayment of an intercompany note from us to LMCS. The transaction also included (i) the ~~three~~waiver ~~months~~of ~~ended~~LMCS’ ~~September~~obligations ~~30,~~to ~~2019~~pay contingent consideration to the non-controlling member, ~~primarily~~(ii) the ~~due~~ termination of certain warrants to ~~lower~~purchase ~~yields~~our oncapital ~~incremental~~stock ~~investments~~held inby certain ~~debt~~affiliates ~~securities~~of ~~since~~the ~~September~~non-controlling 30member, ~~2019~~(iii) the assignment of certain contractual rights of LMCS to the non-controlling member, and ~~accretion~~(iv) the amendment of an intercompany note from us to LMCS. All conditions required for the ~~discounts~~non-controlling onmember to ~~these~~have the right to repurchase LMCS have been met as of the filing date of this report, with the exception of the repayment of ~~securities~~the intercompany note.

~~Realized~~Our ~~Gain~~real onestate-related ~~Investments,~~revenues ~~Net.~~have ~~During~~continued to remain stable during the three and six months ended ~~September 30~~December 31, 2020, and we ~~sold~~believe ~~investments~~that inour ~~certain~~real ~~debt~~estate ~~and~~borrowers ~~equity~~will continue ~~securities~~to be able to service their real estate loans. We continue to develop real estate for ~~which~~future sale. While we ~~recognized~~do ~~$532,000~~not believe that any of ~~net~~these ~~realized~~projects ~~gains,~~warrant asimpairment ~~compared~~charges toor $1other reserves at this point,~~076,000~~ ofwe ~~realized~~do ~~gains~~expect onthat the ~~sale~~economic impact of the ~~certain~~pandemic ~~equity~~will ~~and~~result ~~debt~~in ~~securities~~a ~~during~~delay in the ~~same~~ ~~period~~eventual insale ~~the~~of ~~prior~~this ~~year~~real estate.

~~Unrealized~~In ~~(Loss)~~August ~~Gain~~2020, onwe ~~Equity~~established ~~Securities,~~CCUR Aviation ~~Net.~~Finance, ~~During~~LLC, ~~the~~a ~~three~~wholly ~~months~~owned ~~ended~~subsidiary ~~September~~through ~~30,~~which ~~2020,~~ we ~~reported~~operate ~~unrealized~~our ~~loss~~aviation onfunding ~~equity~~business. ~~securities,~~Since ~~net,~~August ~~of $1~~2018,~~045,000, compared~~ towe ~~unrealized~~have ~~gain~~been providing offully ~~$469,000~~refundable ~~during~~deposits into the ~~three~~aircraft ~~months~~finance ~~ended September 30~~market, ~~2019.~~which ~~Our~~are ~~unrealized~~used ~~losses~~during onthe ~~equity~~initial ~~securities each~~due diligence period ~~are~~for aircraft a(“aviation ~~function~~deposits”). ofWe ~~changes~~have infinanced ~~the~~12 ~~fair~~transactions, ~~value~~each of ~~the~~which ~~equity~~has ~~securities~~utilized ~~that~~the weservices ~~hold as~~ of ~~the~~Wright Brothers, ~~current~~based ~~reporting~~in ~~period balance~~Oklahoma ~~sheet~~City, ~~date~~Oklahoma, ~~relative~~as to the ~~preceding~~escrow ~~balance~~agent. ~~sheet~~Prior ~~date.~~to ~~Our~~January ~~unrealized~~12, ~~losses~~2021, ~~during~~each ~~the~~aviation ~~current~~deposit ~~period~~we ~~were~~provided ~~attributable~~had tobeen areturned ~~decline~~on intime ~~the~~and ~~fair~~without ~~value of equity securities during the period~~incident.

27On January 12, 2021, we were due the return of $8,500,000 in aviation deposits. Upon inquiry to Wright Brothers and following repeated unsuccessful attempts to contact it or its principal, Debbie Mercer-Erwin, we learned that on or about December 17, 2020, Ms. Mercer-Erwin had been arrested by law enforcement and that all assets of Wright Brothers had been frozen.

~~Income~~In ~~Tax~~addition ~~(Benefit)~~to ~~Provision. We reported $231,000 of income tax provision for~~ the ~~three~~deposit ~~months~~funds ~~ended September 30, 2020. The effective tax rate ("ETR")~~mentioned ~~each period is impacted by a number of factors~~above, ~~including~~we ~~the~~were ~~relative~~also ~~mix of domestic and international earnings, adjustments to the valuation allowances, and other items. The currently forecasted ETR may vary from the actual year-end ETR~~ due to the ~~changes in~~return these factors. The Company’s global ETR for the three months ended September 30, 2020 and 2019 was 39% and 5%, respectively. The difference between the ETR’s for the three months ended September 30, 2020 and 2019 was primarily driven by the release of a ~~substantial~~further ~~portion of our valuation allowance during our fiscal year 2020. We maintained a full valuation allowance as of September 30~~$5, ~~2019~~500,000 ~~resulting~~ in ~~the~~aviation ~~comparably~~deposits ~~lower~~on ~~ETR.~~January ~~Other factors include differences in the magnitude of taxable gains in the periods and lower levels of forecasted pre-tax book income for fiscal year 2021 as compared to fiscal year 2020~~25, ~~which can yield large fluctuations in the ETR on a period-over-period basis~~2021.

~~Liquidity~~We are currently fully cooperating with authorities to expedite the return of all aviation deposits that were due. We have been told by authorities that we are not the subject of any investigations related to Ms. Mercer-Erwin or Wright Brothers. Based on an examination of all information currently available to us, we have determined that it is probable a loss has occurred related to our aviation deposits. Due to the limited information available and ~~Capital~~uncertainty ~~Resources~~related to the specific sources of recovery and their timing, we are unable to make the determination that any amount of recovery is probable. As a result, our Board of Directors and management determined on February 6, 2021 that the appropriate action is a full write-down of our aviation deposits during the three and six months ended December 31, 2020. The write-down is reported as part of provision for credit losses on advances on the consolidated statements of operations.

We ~~do not currently~~ expect ~~the COVID-19 pandemic~~ to ~~significantly~~aggressively ~~affect~~pursue ~~our~~all ~~liquidity~~remedies for ~~and~~recovery, ~~currently~~including ~~have~~those ~~access~~related to ~~sufficient~~insurance ~~liquidity~~ and ~~capital~~actions ~~resources~~against toall ~~continue funding~~parties ~~our~~that ~~operations~~may ~~and~~have ~~sustain~~contributed ~~currently~~to ~~expected~~the ~~levels~~loss of ~~capital expenditures over~~ the aviation ~~next twelve months~~deposits. ~~While~~Since wethe ~~maintain significant~~loss ~~amounts~~ of ~~cash and cash equivalents and marketable securities which we may use to fund~~ our ~~operations~~aviation ~~and~~deposits ~~make~~held ~~investments, the~~by ~~COVID-19~~Wright ~~pandemic has had a significant impact on credit markets~~Brothers, ~~which~~we ~~may~~are ~~adversely affect our ability to access third~~re-~~party financing.~~evaluating ~~Given~~ our ~~substantial~~aviation ~~cash balances, we do not anticipate that our future liquidity will be materially impacted by any~~ funding ~~obligations related to our affiliates~~business. ~~Our future liquidity will be affected by, among other things:~~

·Through ~~our~~most ~~future~~of ~~access~~the three and six months ended December 31, 2020, we have continued to ~~capital~~actively evaluate and engage with potential acquisition target candidates; however, the pandemic has delayed our due diligence process by impeding our ability to participate in in-person visits and physical tours and complicating our ability to place valuations on targets given the uncertainty in the global markets. We expect this uncertainty to continue over the next few months. Thus, while we have not experienced a significant slowing of merger and acquisition activity, any acquisitions that we decide to pursue may take longer to consummate.

·Critical ~~our~~Accounting ~~exploration~~Policies and ~~evaluation of strategic alternatives and development of new operating assets;~~Estimates

·The ~~our~~SEC ~~ability~~defines “critical accounting estimates” as those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to ~~collect~~make onestimates ~~our~~about ~~commercial~~the ~~loans~~effect of matters that are inherently uncertain and ~~advances~~may ~~receivable;~~change in subsequent periods. Our critical accounting policies and estimates are disclosed under the section “Application of Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, except for those as described below.

·Equity ~~the~~Method ~~liquidity and fair value of our debt and equity securities; and~~Investments

·Investments in unconsolidated entities over which we have significant influence are accounted for under the equity method of accounting. Under the equity method of accounting, the Company does not consolidate the investment’s financial statements within its consolidated financial statements. Equity method investments are initially recorded at cost, then our ~~ongoing~~proportional ~~operating~~share ~~expenses~~of the underlying net income or loss is recorded as equity in net income or loss from equity method investments in our statement of operations, with a corresponding increase or decrease to the carrying value of the investment. Distributions received from the investee reduce our carrying value of the investment and are recorded in the consolidated statements of cash flows using the cumulative earnings approach. These investments are evaluated for impairment if events or circumstances arise that indicate that the carrying amount of such assets may not be recoverable. There were no indicators of impairment related to our equity method investments for the three and six months ended December 31, 2020.

~~Uses and Sources of Cash~~28

~~Cash~~Results ~~Flows~~of ~~from Operating Activities~~Operations

WeMCA ~~generated $516,000~~ and ~~$537,000~~other offinancial ~~cash~~services revenue ~~from~~includes ~~operating~~income ~~activities~~from ~~during~~ the ~~three~~discount ~~months~~at ~~ended~~which ~~September~~we ~~30,~~provide ~~2020~~advances ~~and~~on ~~2019,~~future ~~respectively.~~merchant ~~Operating cash generated during the three months ended September 30~~receivables, ~~2020~~as ~~was~~well ~~primarily~~as ~~attributable~~fees toearned ~~income from operations, adjusted~~ for ~~non-cash items, partially~~sourcing ~~offset~~both bysyndication ~~realized~~capital ~~gains~~and onmerchant ~~investments~~leads ~~and~~for byFunders. ~~the~~We ~~timing~~generate ofrevenue ~~collection~~from of interest ~~income.~~on ~~Operating~~loans ~~cash~~by ~~generated~~entering ~~during~~into ~~the~~commercial ~~three~~loan ~~months~~agreements ~~ended September 30, 2019 was primarily attributable~~ to ~~cash~~Funders ~~income~~and ~~generated~~third-party byoriginators ~~our~~in ~~operations~~the ~~and~~real ~~investments~~estate ~~exceeding our operating costs~~industry.

~~Cash~~Selling, ~~Flows~~general, ~~from~~and ~~Investing~~administrative ~~Activities~~expenses consist primarily of salaries, benefits, rent, administrative personnel, information systems, insurance, accounting, legal services, board of director fees and expenses, and other professional services.

~~During~~Other ~~the~~interest ~~three~~income ~~months~~is ~~ended~~earned ~~September~~on cash ~~30,~~overnight ~~2020,~~sweep weaccounts ~~generated~~and ~~$8,470,000~~money ofmarket ~~cash,~~deposits ~~net,~~as ~~from~~well ~~investing~~as ~~activities.~~investments ~~Our~~in ~~net~~debt ~~cash~~securities. ~~inflows~~Interest ~~were~~income ~~primarily~~also ~~driven~~includes ~~by liquidations~~accretion of ~~$5,659,000~~discounts ~~more~~related into ~~debt~~transactions ~~and~~in ~~equity~~which ~~securities~~we ~~than~~purchased ~~investments~~debt ~~during~~securities on the ~~three~~secondary ~~months~~markets ~~ended~~at ~~September~~a ~~30, 2020~~discount. WeSuch ~~also collected~~discounts ~~$1,833,000~~are ~~more~~amortized inover ~~MCAs~~the ~~and~~terms ~~other~~of ~~advances~~each ~~than~~debt wesecurity ~~funded~~to ~~during~~ the ~~three~~commitment ~~months~~values ~~ended~~that ~~September~~will ~~30,~~be ~~2020.~~due ~~Additionally,~~on weeach ~~collected $1~~maturity date,~~214,000~~ ~~more~~as inwell ~~mortgage~~as early ~~and~~repayment. ~~commercial~~Additionally, ~~loans~~we ~~receivable~~earn ~~than~~payment-in-kind we(“PIK”) ~~funded~~interest ~~during~~from ~~the~~one ~~three~~of ~~months~~our ~~ended~~debt ~~September~~securities ~~30,~~whereby ~~2020. Remaining~~interest ~~investing~~is ~~cash~~paid ~~outflows~~in ~~during~~ the ~~three~~form ~~months ended September 30, 2020 resulted from our purchase~~ of aan ~~small~~increase ~~minority interest~~ in anthe ~~operating~~commitment ~~business,~~value ~~and~~due from ~~our~~the ~~continued~~debt ~~investment~~security inissuer ~~land~~on ~~parcels~~the ~~for~~maturity ~~development and resale~~date.

~~During~~Three ~~the~~Months ~~three~~Ended ~~months ended September 30~~December 31, ~~2019,~~2020 we generated $137,000 of cash, net, from investing activities. Our net cash inflows were primarily driven by collecting more merchant payments and other advances than we redeployed to fund MCAs and other advances, resulting in ~~$1,567,000~~Comparison of net cash inflows from MCAs during the period. Additionally, we generated net cash from debt and equity securities as we liquidated $817,000 more in debt and equity securities than we invested during the three months ended September 30, 2019. Partially offsetting the net cash inflows from MCAs and other advances and debt and equity securities, we funded $1,981,000 more in mortgage and commercial loans than we collected during the period, primarily attributable to ~~new loans that we made to Funders. Remaining investing cash~~ ~~outflows during~~ the ~~three~~Three ~~months~~Months ~~ended~~Ended ~~September 30~~December 31, 2019 ~~resulted from our purchase of land parcels for development and resale.~~

~~Cash~~Consolidated Revenues ~~Flows~~and ~~from~~Income. ~~Financing~~During ~~Activities~~the three months ended December 31, 2020, we generated $1,197,000 of total revenue, compared to $1,787,000 in the three months ended December 31, 2019, with the decline driven largely by our decreasing participation in the MCA industry. Our net loss for the three months ended December 31, 2020 was $8,333,000, compared to net income of $2,737,000 for the three months ended December 31, 2019. This decrease was primarily attributable to aviation advance loss provisions, reductions of revenue and other interest income, and an increase in operating expenses due primarily to increased management and performance fees. Additionally, the three months ended December 31, 2019 included an adjustment for the decrease in fair value of contingent consideration for which the agreement was terminated during the fourth quarter of the fiscal year ended June 30, 2020. This was offset by increases in realized gains on sales of securities and unrealized gains on equity securities.

~~During~~MCA and Other Financial Services Segment Revenues. We generated $1,151,000 of revenue from MCA and other financial services operations during the three months ended ~~September~~ 30December 31, 2020, wecompared ~~used~~to $151,675,000 ofduring ~~cash~~the ~~for~~three ~~financing~~months ~~activities~~ended ~~for~~December 31, ~~distributions~~2019. toDuring the ~~non-controlling~~year ~~interest~~ended June 30, 2020, management concluded that it would not resume funding MCAs with Funders. This resulted in a decrease of MCA revenue during the current period. Our MCA and other financial services operations revenues for the three months ended December 31, 2020 and 2019 are as follows:

During the three months ended September 30, 2019, there were no cash flows from financing activities.

	Three Months Ended December 31,
	2020		2019

	(Amounts in thousands)
MCA and other financial services revenue	$	927	$	990
Syndication fee revenue		85		388
Fee income on MCA leads generation		34		62
MCA fees and other revenue		1,046		1,440
Interest on loans to MCA originators		105		235
Total MCA and other financial services operations segment revenue	$	1,151	$	1,675

28MCA revenue from interest on loans to Funders is categorized as MCA and other financial services operations revenue for segment reporting purposes but reported as interest on mortgage and commercial loans within our consolidated statements of operations.

~~Liquidity~~Revenues from each of the revenue sources within our MCA segment decreased with the onset of the COVID-19 pandemic. We experienced declines of MCA revenues during the three months ended December 31, 2020. This occurred as (i) fewer merchants are meeting MCA underwriting criteria, which reduces our syndication fee income and ability to generate revenue by funding MCAs, (ii) underwriters are less interested in purchasing leads, and (iii) a portion of our merchants, in coordination with the Funders, have reduced or paused payments to better weather the current economic downturn, which reduces our MCA revenues. Furthermore, we reduced our volume of MCA funding during the three months ended December 31, 2020, primarily as a result of our efforts to better evaluate the impact of the pandemic on MCA assets before funding additional assets. We anticipate continued lower funding and collection volume over the next few months and are uncertain as to the long-term impact of the pandemic at this point. On July 17, 2020, we entered into a series of agreements with Old LuxeMark pursuant to which our interest in LMCS was reduced from 80% to 51%. After the repayment of the outstanding balance of the Master Promissory Note issued by LMCS to us, Old LuxeMark has the right to purchase the remaining 51% equity interest in LMCS for nominal consideration. We are reviewing our strategic options with respect to our continued participation in the MCA industry.

We had working capital (current assets less current liabilities) of $52.2 million at September 30, 2020, compared to working capital of $51.0 million at June 30, 2020. At September 30, 2020, we had no material commitments for capital expenditures.29

~~As of~~Real ~~September~~Estate ~~30,~~Operations ~~2020,~~Segment ~~less than 0~~Revenues.1% We ofgenerated ~~our cash was in foreign accounts~~$46,000 ~~and~~of ~~there~~revenue ~~is no expectation that any foreign cash would need to be transferred~~ from ~~these~~interest ~~foreign~~on ~~accounts~~commercial tomortgage ~~cover~~loans ~~U.S. operations~~during in the ~~next~~three 12 months. ~~Based~~ended ~~upon our existing cash balances~~December 31, ~~equity securities~~2020, ~~and available-for-sale investments,~~ ~~historical~~compared ~~cash~~to ~~usage~~$112,000 ~~and~~during ~~anticipated operating cash flow in~~ the ~~current~~three ~~fiscal~~months ~~year~~ended December 31, ~~we believe that existing U~~2019.S. ~~cash~~The ~~balances will~~decrease bein ~~sufficient~~revenue toresulted ~~meet our anticipated working capital requirements for at least the next 12 months~~ from ~~the~~originations ~~issuance date~~outpacing ofborrower ~~this report~~repayments.

~~Off-Balance~~Selling, ~~Sheet~~General, ~~Arrangements~~and Administrative Expenses. Corporate selling, general, and administrative expenses were $1,161,000 for the three months ended December 31, 2020, a $164,000, or 16.4%, increase from the $997,000 for the three months ended December 31, 2019. Decreases in salaries and benefits, real property lease costs, and travel and entertainment, offset by increases in accounting fees and legal fees compared to the prior period caused the period-over-period decrease.

WeSelling, ~~had~~general, and administrative expenses for our MCA and other financial services segment were $41,000 for the three months ended December 31, 2020, a $328,000, or 88.9%, decrease from the $369,000 for the three months ended December 31, 2019. This decrease was caused by decreases in commissions and fees related to the decrease in MCA revenue during the period. There were no ~~material~~selling, ~~off-balance~~general, ~~sheet~~and ~~arrangements~~administrative expenses asfor ofour ~~September~~real 30estate segment in either the three months ended December 31, 2020 or 2019.

~~Recent~~Amortization ~~Accounting~~of ~~Guidance~~Purchased Intangibles. Our amortization of purchased intangibles includes amortization over the respective useful lives of the trade name, non-competition agreements, and investor/originator relationships attributable to our acquisition of the assets of Old LuxeMark (the “LuxeMark Acquisition”). Our intangible assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be fully recoverable. We acquired these intangibles as part of the LuxeMark Acquisition on February 13, 2019 and no impairments or circumstances requiring a testing of impairment of these intangible assets were identified as of or during the three months ended December 31, 2020.

~~See~~Provision ~~“Note~~for 2.Credit ~~Recent~~Losses ~~Accounting~~on ~~Guidance,”~~Advances. toDuring the ~~accompanying~~three ~~consolidated~~months ~~financial~~ended ~~statements~~December ~~for~~31, 2020, we recorded a ~~full~~$13,775,000 ~~description~~provision offor ~~recent~~credit ~~accounting~~losses ~~standards~~on aviation advances and MCAs, ~~including~~a $13,595,000 increase from the ~~respective~~$180,000 for the three months ended December 31, 2019. The period-over-period increase ~~expected~~in ~~dates~~provision ofexpense ~~adoption~~resulted ~~and~~primarily from the ~~expected~~loss ~~effects~~provision onrecorded ~~our~~against ~~consolidated~~the ~~results~~aviation ofadvances ~~operations~~in ~~and~~the ~~financial~~current ~~condition~~period versus the prior period (see Note 16).

~~Cautionary~~Other ~~Statement~~Interest ~~Regarding~~Income. ~~Forward-Looking~~Other ~~Statements~~interest income includes interest earned on investments in debt securities and cash and money market balances. The components of our interest income for the three months ended December 31, 2020 and 2019 are as follows:

Certain statements made or incorporated by reference in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the 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, our future performance, payment of dividends, ability to utilize our net deferred tax assets and availability of earnings and profits with respect to dividend income, as well as our 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. Examples of our forward-looking statements in this report include, but are not limited to, the duration and impact of the illness caused by the COVID-19 pandemic on the Company’s business plans and expected operating results, the ability of the Board of Directors and the Asset Management Committee of the Board of Directors (the “Asset Management Committee”) to identify suitable business opportunities and acquisition targets and the Company’s ability to consummate transactions with such acquisition targets; our ability to successfully develop our real estate operations; the future of our MCA and other financial services operations; the impact of any strategic initiatives we may undertake; the impact of the current reestablishment of and potential for future release of our tax valuation allowances on future income tax provisions and income taxes paid; our expected level of capital additions; our expected cash position; the impact of interest rate changes and fluctuation in currency exchange rates; our sufficiency of cash; the impact of litigation; and the payment of any declared dividends. These statements are based on beliefs and assumptions of our management, which are based on currently available information. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. The risks and uncertainties which could affect our financial condition or results of operations include, without limitation: the process of evaluating strategic alternatives; the Company’s ability to compete with experienced investors in the acquisition of one or more additional businesses; our ability to utilize our NOLs to offset cash taxes, in general, and in the event of an ownership change as defined by the Internal Revenue Service (the “IRS”); changes in and related uncertainties caused by changes in applicable tax laws; the current macroeconomic environment generally and with respect to acquisitions and the financing thereof; continuing unevenness of the global economic recovery; the availability of debt or equity financing to support any liquidity needs; global terrorism; and earthquakes, tsunamis, floods, pandemics, and other natural disasters.

	Three Months Ended December 31,
	2020		2019

	(Amounts in thousands)
Interest from cash deposits and debt securities	$	359	$	716
Accretion of discounts on purchased debt securities		311		1,190
Payment-in-kind interest		9		239
Other interest income	$	679	$	2,145

~~Our~~Other ~~forward-looking~~interest ~~statements~~income ~~are~~for ~~based on~~the ~~current~~three ~~expectations~~months ended ~~and~~December 31, ~~speak~~2020 ~~only~~decreased asby of$1,466,000, ~~the~~or ~~date of such statements~~68.3%, Wecompared ~~undertake~~to nothe ~~obligation~~three tomonths ~~publicly~~ended ~~update~~December 31, or2019, ~~revise~~primarily ~~any~~due ~~forward-looking~~to ~~statement,~~lower ~~whether~~yields ason aincremental ~~result~~investments ofin ~~future~~debt ~~events,~~securities ~~new~~since ~~information~~December 31, or2019 ~~otherwise,~~and ~~except~~accretion asof ~~may~~the bediscounts ~~required by~~on ~~applicable~~these ~~law~~securities.

29Realized Gain on Investments, Net. During the three months ended December 31, 2020, we sold investments in certain debt and equity securities for which we recognized $876,000 of net realized gains, as compared to $843,000 of realized gains on the sale of certain equity and debt securities during the same period in the prior year.

Other important risk factors that could cause actual results to differ from any forward-looking statements made in this report are discussed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30~~, 2020 and in “Item 1A. Risk Factors” in this report or elsewhere herein.~~

~~Item~~Unrealized 3(Loss) Gain on Equity Securities, Net. ~~Quantitative~~During the three months ended December 31, 2020, we reported unrealized gains on equity securities, net, of $2,285,000, compared to unrealized losses of $627,000 during the three months ended December 31, 2019. Our unrealized gains and ~~Qualitative~~losses ~~Disclosures~~on ~~About~~equity ~~Market~~securities ~~Risk~~each period are a function of changes in the fair value of the equity securities that we hold as of the current reporting period balance sheet date relative to the preceding balance sheet date. Our unrealized gains during the current period were attributable to increases in the fair value of our equity securities holdings during the period.

~~Pursuant~~Equity toin ~~Item~~Net ~~305(e)~~Loss offrom ~~Regulation~~Equity ~~S-K~~Method ~~(Section 229~~Investment.~~305(e)),~~ During the ~~Company~~three ismonths ~~not~~ended ~~required~~December to31, ~~provide~~2020, ~~the~~we ~~information~~recorded ~~required~~net byloss ~~this~~from ~~Item~~equity asmethod itinvestment isof a$53,000. There ~~“smaller~~was ~~reporting company”~~no asnet ~~defined~~income byor ~~Rule~~loss ~~229~~from equity method investment during the same period in the prior year.~~10(f)(1).~~

~~Item~~Income 4Tax (Benefit) Provision. ~~Controls~~We reported $1,725,000 of income tax benefit for the three months ended December 31, 2020, primarily due to the tax effects of the aviation advance loss. The effective tax rate ("ETR") each period is impacted by a number of factors, including the relative mix of domestic and ~~Procedures~~international earnings, adjustments to the deferred tax valuation allowances, and other items. The currently forecasted ETR may vary from the actual year-end ETR due to the changes in these factors. The Company’s global ETR for the three months ended December 31, 2020 and 2019 was 17% and -1%, respectively. The difference between the ETR’s for the three months ended December 31, 2020 and 2019 was driven by differences in the magnitude of taxable gains in the periods, as well as by the release of the bulk of the deferred tax valuation allowance during the fiscal year ended June 30, 2020, offset by the tax effects of the aviation advance loss provision recorded during the current period.

~~Evaluation~~Six ofMonths Ended December 31, 2020 in Comparison to ~~Disclosure~~the ~~Controls~~Six ~~and~~Months ~~Procedures~~Ended December 31, 2019

WeConsolidated Revenues ~~maintain disclosure controls~~ and ~~procedures that~~Income. ~~are~~During ~~designed~~the tosix ~~ensure~~months ~~that~~ended ~~information~~December ~~required~~31, to2020, bewe ~~disclosed~~generated in$2,107,000 ~~our~~of ~~periodic~~total ~~and~~revenue, ~~current reports that we file with the~~compared ~~SEC~~to ~~is recorded~~$3, ~~processed~~518,000 ~~summarized,~~in ~~and reported within~~ the ~~time~~six ~~periods~~months ~~specified~~ended inDecember ~~the~~31, ~~SEC’s rules and forms~~2019, ~~and that~~with ~~such~~the ~~information~~decline isdriven ~~accumulated~~largely ~~and~~by ~~communicated to~~ our ~~management,~~decreasing ~~including~~participation ~~our~~in ~~President and Chief Financial Officer (“CFO”),~~the asMCA ~~appropriate, to allow timely decisions regarding required disclosure~~industry. InOur ~~designing~~net ~~and~~loss ~~evaluating~~for the ~~disclosure~~six ~~controls~~months ~~and procedures,~~ended ~~management~~December ~~recognized~~31, ~~that~~2020 ~~any~~was ~~controls and procedures~~$7,944,000, nocompared ~~matter~~to ~~how~~net ~~well~~income ~~designed~~of ~~and operated~~$6,143,000 ~~can provide only~~for ~~reasonable~~the ~~and~~six ~~not~~months ~~absolute~~ended ~~assurance~~December of31, ~~achieving~~2019. ~~the~~This ~~desired~~decrease ~~control~~was ~~objectives.~~primarily Inattributable ~~reaching~~to aaviation ~~reasonable~~advance ~~level~~loss ~~of assurance~~provisions, reductions ~~management~~of ~~necessarily~~revenue ~~was~~and ~~required~~other tointerest ~~apply~~income, ~~its~~and ~~judgment~~an increase in ~~evaluating~~operating ~~the~~expenses ~~cost-benefit~~due ~~relationship~~primarily ofto ~~possible~~increased ~~controls~~management and performance ~~procedures~~fees. ~~In addition~~Additionally, the ~~design~~six ofmonths ~~any~~ended ~~system~~December of31, ~~controls~~2019 ~~also~~included isan ~~based~~adjustment infor ~~part upon certain assumptions about~~ the ~~likelihood of~~decrease ~~future events, and there can be no assurance that any design will succeed~~ in ~~achieving~~fair ~~its~~value ~~stated~~of ~~goals~~contingent consideration ~~under~~for ~~all~~which ~~potential future~~the ~~conditions.~~agreement ~~Over~~was ~~time,~~terminated ~~controls~~during ~~may~~the ~~become~~fourth ~~inadequate~~quarter ~~because~~ of ~~changes in conditions, or~~ the ~~degree~~fiscal ofyear ~~compliance~~ended ~~with policies~~June or30, ~~procedures may deteriorate~~2020. ~~Because~~This ofwas offset ~~the~~by ~~inherent~~an ~~limitations~~increase in arealized ~~cost-effective~~gains ~~control~~on ~~system,~~sales ~~misstatements~~of ~~due to~~securities ~~error~~and orunrealized ~~fraud~~gains ~~may~~on ~~occur~~equity ~~and not be detected~~securities.

AsMCA ofand ~~September~~Other ~~30,~~Financial ~~2020,~~Services ~~under the supervision~~Segment ~~and~~Revenues. ~~with~~We ~~the~~generated ~~participation~~$1,967,000 of ~~our~~revenue ~~management,~~from ~~including~~MCA ~~our~~and ~~President~~other ~~and~~financial ~~CFO,~~services weoperations ~~conducted~~during anthe ~~evaluation~~six ofmonths ~~the~~ended ~~effectiveness~~December 31, of2020, compared to $3,327,000 during the ~~design~~six ~~and~~months ~~operation~~ended ofDecember 31, ~~our~~2019. ~~disclosure~~During ~~controls~~the ~~and~~year ~~procedures~~ended June 30, as2020, ~~such~~management concluded ~~term~~that isit ~~defined~~would innot ~~Exchange~~resume ~~Act~~funding ~~Rules~~MCAs ~~13a-15(e) and~~with ~~15d-15(e)~~Funders. ~~Based~~This ~~upon~~resulted ~~that~~in ~~evaluation,~~a ~~our~~decrease ~~President~~of ~~and~~MCA ~~CFO~~revenue ~~concluded~~during ~~that~~the ~~our~~current ~~disclosure~~period. Our ~~controls~~MCA and ~~procedures~~other ~~were~~financial ~~effective at~~services ~~the~~operations ~~reasonable~~revenues ~~assurance~~for ~~level~~the assix ofmonths ~~September~~ended 30December 31, 2020. and 2019 are as follows:

Changes in Internal Control Over Financial Reporting

	Six Months Ended December 31,
	2020		2019

	(Amounts in thousands)
MCA and other financial services revenue	$	1,466	$	1,795
Syndication fee revenue		214		938
Fee income on MCA leads generation		34		155
MCA fees and other revenue		1,714		2,888
Interest on loans to MCA originators		253		439
Total MCA and other financial services operations segment revenue	$	1,967	$	3,327

~~There~~MCA ~~have~~revenue ~~been~~from nointerest ~~changes~~on inloans ~~our~~to ~~internal~~Funders ~~controls over financial reporting as such term~~ is ~~defined~~categorized ~~in the Securities Exchange Act of 1934,~~ as ~~amended~~MCA ~~(the “Exchange Act”) Rules 13a-15(e)~~ and ~~15d-15(e)~~other ~~during~~financial ~~the~~services ~~three~~operations ~~months~~revenue ~~ended~~for ~~September~~segment ~~30,~~reporting ~~2020~~purposes ~~that~~but ~~have~~reported ~~materially~~as ~~affected,~~interest ~~or are~~on ~~reasonably~~mortgage ~~likely~~and tocommercial ~~materially~~loans ~~affect,~~within our ~~internal~~consolidated ~~controls~~statements ~~over~~of ~~financial reporting~~operations.

3031

~~Part~~Revenues from each of the revenue sources IIwithin our MCA segment decreased with the onset of the COVID-19 ~~Other~~pandemic. ~~Information~~We experienced declines of MCA revenues during the six months ended December 31, 2020. This occurred as (i) fewer merchants are meeting MCA underwriting criteria, which reduces our syndication fee income and ability to generate revenue by funding MCAs, (ii) underwriters are less interested in purchasing leads, and (iii) a portion of our merchants, in coordination with the Funders, have reduced or paused payments to better weather the current economic downturn, which reduces our MCA revenues. Furthermore, we reduced our volume of MCA funding during the six months ended December 31, 2020, primarily as a result of our efforts to better evaluate the impact of the pandemic on MCA assets before funding additional assets. We anticipate continued lower funding and collection volume over the next few months and are uncertain as to the long-term impact of the pandemic at this point. On July 17, 2020, we entered into a series of agreements with Old LuxeMark pursuant to which our interest in LMCS was reduced from 80% to 51%. After the repayment of the outstanding balance of the Master Promissory Note issued by LMCS to us, Old LuxeMark has the right to purchase the remaining 51% equity interest in LMCS for nominal consideration. We are reviewing our strategic options with respect to our continued participation in the MCA industry.

~~Item~~Real 1Estate Operations Segment Revenues. We ~~Legal~~generated ~~Proceedings~~$140,000 of revenue from interest on commercial mortgage loans during the six months ended December 31, 2020, compared to $191,000 during the six months ended December 31, 2019. The decrease in revenue resulted from originations outpacing borrower repayments.

WeSelling, ~~are~~General, ~~from~~and ~~time~~Administrative Expenses. toCorporate ~~time~~selling, ~~party~~general, toand ~~various routine~~administrative ~~legal~~expenses ~~proceedings~~were ~~arising~~$2,054,000 ~~out~~for ofthe ~~our~~six ~~business.~~months ~~While~~ended ~~the~~December 31, 2020, ~~resolution~~a of$166,000, ~~any~~or ~~such~~8.8%, ~~matter~~increase ~~cannot~~from bethe ~~predicted with certainty~~$1, we888,000 ~~are~~for ~~not~~the ~~presently~~six ~~involved~~months inended ~~any litigation~~December 31, ~~nor~~2019. isIncreases ~~any~~in ~~legal~~accounting fees ~~proceeding~~and ~~currently~~legal ~~threatened against us~~fees, ~~that~~offset weby ~~believe, individually~~decreases or in ~~the~~salaries ~~aggregate,~~and ~~would~~benefits ~~have~~compared ato ~~material~~the ~~adverse~~prior ~~effect on our business~~period, ~~financial~~caused ~~condition,~~the orperiod-over-period ~~results of operations~~increase.

~~Item~~Selling, 1Ageneral, and administrative expenses for our MCA and other financial services segment were $233,000 for the six months ended December 31, 2020, a $490,000, or 67.8%, ~~Risk~~decrease ~~Factors~~from the $723,000 for the six months ended December 31, 2019. This decrease was caused by decreases in commissions and fees related to the decrease in MCA revenue during the period. There were no selling, general, and administrative expenses for our real estate segment in either the six months ended December 31, 2020 or 2019.

Amortization of Purchased Intangibles. Our ~~business~~amortization isof ~~subject~~purchased tointangibles ~~risks~~includes ~~and~~amortization ~~events that,~~over ifthe ~~they~~respective ~~occur~~useful lives of the trade name, ~~could~~non-competition agreements, ~~adversely~~and ~~affect~~investor/originator relationships attributable to our ~~financial~~acquisition ~~condition~~of ~~and~~the ~~results~~assets of ~~operations~~Old ~~and~~LuxeMark (the ~~trading~~“LuxeMark Acquisition”). ~~price~~Our ofintangible ~~our~~assets ~~securities. Except~~are asevaluated ~~noted~~for ~~below,~~impairment ~~our~~whenever ~~risk~~events ~~factors~~or ~~have~~changes ~~not~~in ~~changed~~circumstances ~~materially~~indicate ~~from~~that the ~~those~~carrying ~~described~~value inof ~~“Part~~the I,assets ~~Item~~may 1Anot be fully recoverable. ~~Risk~~We ~~Factors” of~~acquired ~~our~~these ~~Annual~~intangibles ~~Report~~as part of the LuxeMark Acquisition on ~~Form~~February 13, ~~10-K~~2019 ~~for~~and ~~the~~no ~~fiscal~~impairments ~~year~~or ~~ended~~circumstances ~~June~~requiring ~~30,~~a ~~2020,~~testing ~~filed~~of ~~with~~impairment of these intangible assets were identified as of or during the ~~SEC~~six onmonths ~~September~~ended 15December 31, 2020.

~~General~~Provision for ~~Business~~Credit ~~Risks~~Losses on Advances. During the six months ended December 31, 2020, we recorded a $13,827,000 provision for credit losses on aviation advances and MCAs, a $13,431,000 increase from the $396,000 for the six months ended December 31, 2019. The period-over-period increase in provision expense resulted from the loss provision recorded against the aviation advances in the current period versus the prior period (see Note 16).

~~The~~Other ~~Company~~Interest ~~may~~Income. beOther ~~classified~~interest asincome anincludes ~~inadvertent~~interest ~~investment~~earned ~~company~~on ifinvestments wein ~~acquire~~debt ~~investment~~ securities inand ~~excess~~cash ofand ~~40%~~money market balances. The components of our ~~total~~interest income ~~assets.~~for the six months ended December 31, 2020 and 2019 are as follows:

We are engaged in the business of being a diversified holding company engaged in significant finance and real estate activities while we continue to seek to acquire or establish other finance or operating businesses or assets. Our acquisition strategy focuses on evaluating acquisition targets that have reasonable growth prospects and that could benefit from our substantial NOLs, and our management spends a significant portion of its time reviewing potential acquisitions, conducting due diligence, and seeking to negotiate transaction terms. From time to time, we have purchased investment securities as part of a deliberate strategy to obtain control of an operating business.

	Six Months Ended December 31,
	2020		2019

	(Amounts in thousands)
Interest from cash deposits and debt securities	$	858	$	1,433
Accretion of discounts on purchased debt securities		916		2,366
Payment-in-kind interest		265		483
Other interest income	$	2,039	$	4,282

Under the Investment Company Act of 1940 (the “ICA”), a company may fall within the scope of being an “inadvertent investment company” under Section 3(a)(1)(C) of the ICA if the value of its investment securities (as defined in the ICA) is more than 40% of the company’s total assets on an unconsolidated basis (exclusive of government securities and cash and cash equivalents). We do not believe that we are engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in the business of investing, reinvesting, or trading in securities. However, with the assistance of CIDM II, LLC (“CIDM II,” or the “Asset Manager”), we seek prudently to hold excess liquid resources in marketable securities to preserve resources needed to acquire operating businesses or assets and fund our finance and real estate activities.32

AnOther ~~inadvertent~~interest ~~investment~~income ~~company~~for ~~can avoid being classified as an investment company if it can rely on one of~~ the ~~exclusions~~six ~~under~~months ended ~~the ICA. One such exclusion~~December 31, ~~Rule~~2020 ~~3a-2 under~~decreased ~~the~~by ~~ICA~~$2,243,000, ~~allows an inadvertent investment company a grace period of one year from the earlier of (i) the date on which an issuer owns securities and/~~or ~~cash having a value exceeding 50~~52.4% ~~of the issuer’s total assets on either a consolidated or unconsolidated basis~~, ~~and~~compared ~~(ii) the date on which an issuer owns or proposes~~ to ~~acquire investment securities having a value exceeding 40% of~~ the ~~value~~six ofmonths ~~such~~ended ~~issuer’s~~December 31, ~~total~~2019, ~~assets (exclusive of government securities and cash items) on an unconsolidated basis.~~primarily Wedue ~~are putting in place policies that we expect will work~~ to ~~keep~~lower ~~the~~yields ~~investment securities held by us at less than 40% of our total assets, which may include selling certain of our investments~~ on ~~disadvantageous~~incremental ~~terms, holding a greater proportion of our~~ investments in ~~marketable~~debt securities insince ~~U.S. government securities or cash equivalents that have a lower rate of return than other investment securities~~December 31, or2019 ~~making other material modifications to our business operations~~ and ~~strategy,~~accretion ~~any or all~~ of ~~which~~the ~~could have~~discounts ~~a material adverse effect~~ on these ~~our business, financial condition, results of operations, and future prospects~~securities.

AsRealized ~~Rule~~Gain ~~3a-2~~on isInvestments, ~~available to a company no~~Net. ~~more~~During ~~than~~the ~~once~~six ~~every~~months ~~three~~ended ~~years~~December 31, ~~and assuming no other exclusion were available to us~~2020, we ~~would~~sold ~~have~~investments toin ~~keep~~certain ~~within~~debt ~~the~~and ~~40%~~equity ~~limit~~ securities for atwhich ~~least three years after~~ we ~~ceased~~recognized $1,408,000 ~~being~~of annet ~~inadvertent~~realized ~~investment~~gains, ~~company.~~as ~~This~~compared ~~may limit our ability~~ to ~~make~~$1,919,000 ~~certain~~of ~~investments or~~realized ~~enter~~gains ~~into joint ventures that could otherwise have a positive impact~~ on ~~our~~the ~~earnings.~~sale Inof ~~any~~certain ~~event,~~equity weand dodebt ~~not intend to become~~securities anduring ~~investment~~the ~~company~~same ~~engaged~~period in the ~~business~~prior ~~of investing and trading securities~~year.

~~The~~Unrealized ~~Board~~(Loss) ofGain ~~Directors~~on ~~and~~Equity ~~management regularly~~Securities, ~~monitor~~Net. During the ~~Company’s~~six ~~status~~months ~~relative~~ended toDecember 31, ~~the~~2020, ~~inadvertent~~we ~~investment~~reported ~~company~~unrealized ~~test~~gains ~~under~~on ~~the~~equity ~~ICA~~securities, ~~and~~net, ~~believe~~of ~~that~~$1,240,000, compared ~~the~~to ~~Company is~~unrealized ~~not~~losses of $158,000 ~~currently~~during orthe assix ofmonths ~~September~~ended 30December 31, ~~2020,~~2019. anOur ~~inadvertent~~unrealized ~~investment~~gains ~~company~~and ~~based~~losses on equity ~~the~~securities ~~assets~~each ~~test~~period ~~under~~are ~~Section 3(~~a~~)(1)(C)~~ function of ~~the~~ ~~ICA.~~changes ~~The~~in ~~effects~~the fair value of the ~~COVID-19~~equity ~~pandemic~~securities ~~and~~that ~~resulting~~we ~~economic~~hold ~~downturn~~as ~~have~~of ~~adversely~~the ~~impacted~~current reporting ~~the~~period ~~Company’s~~balance ~~acquisition activities~~sheet ~~due~~date relative to the ~~reduced~~preceding ~~level~~balance ofsheet ~~merger~~date. ~~and~~Our ~~acquisition~~unrealized ~~activity~~gains ~~and~~during the ~~difficulty~~current ~~for~~period were ~~buyers~~attributable ~~and~~to ~~sellers~~an toincrease ~~agree~~in onthe ~~valuations and~~fair ~~transaction~~value ~~terms~~of equity securities during the period.

~~Classification~~Equity asin anNet ~~investment~~Loss ~~company under~~from ~~the~~Equity ~~ICA~~Method Investment. ~~requires~~During ~~registration with~~ the ~~SEC.~~six Ifmonths anended ~~investment~~December ~~company fails to register~~31, ~~it would have to stop doing almost all business~~2020, ~~and its contracts would become voidable. Registration is time-consuming and restrictive and would require a restructuring of our operations, and~~ we ~~would~~recorded benet ~~very~~loss ~~constrained~~from inequity ~~the~~method ~~kind~~investment of ~~business we could do as a registered investment company~~$53,000. ~~Further,~~There wewas ~~would~~no ~~become~~net ~~subject~~income toor ~~substantial~~loss ~~regulation~~from ~~concerning~~equity ~~management,~~method ~~operations,~~investment ~~transactions~~during ~~with affiliated persons, and portfolio composition, and would need to file reports under~~ the ~~ICA~~same ~~regime.~~period ~~The cost of such compliance would result~~ in ~~our incurring substantial additional expenses, and~~ the ~~failure~~prior ~~to register if required would have a materially adverse impact to conduct our operations~~year. ~~We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company.~~

Income Tax Provision. We reported $1,494,000 of income tax benefit for the six months ended December 31, 2020, primarily due to the tax effects of the aviation advance loss provision. The ETR each period is impacted by a number of factors, including the relative mix of domestic and international earnings, adjustments to the valuation allowances, and other items. The currently forecasted ETR may vary from the actual year-end ETR due to the changes in these factors. The Company’s global ETR for the six months ended December 31, 2020 and 2019 was 16% and 2%, respectively. The difference between the ETR’s for the six months ended December 31, 2020 and 2019 was driven by differences in the magnitude of taxable gains in the periods, as well as by the release of the bulk of the deferred tax valuation allowance during the fiscal year ended June 30, 2020, offset by the tax effects of the aviation advance loss provision recorded during the current period.

~~Our~~Liquidity ~~limited operating history makes it difficult to evaluate our future business prospects~~ and toCapital ~~make decisions based on our historical performance.~~Resources

~~Although~~We ~~our~~do ~~executive~~not ~~officers~~currently ~~have~~expect ~~been engaged in~~ the ~~industries~~COVID-19 pandemic into ~~which~~significantly weaffect ~~operate~~our ~~for~~liquidity ~~varying~~and ~~degrees~~currently ofhave ~~time,~~access weto ~~did~~sufficient ~~not~~liquidity ~~begin~~and ~~operations~~capital ofresources ~~our~~to ~~current business~~continue ~~until~~funding ~~recently.~~our Weoperations ~~have~~and asustain ~~very~~currently ~~limited~~expected ~~operating~~levels ~~history~~of incapital ~~our~~expenditures ~~current~~over ~~form,~~the ~~which~~next ~~makes~~twelve itmonths. ~~difficult~~While towe ~~evaluate our business~~maintain onsignificant ~~the~~amounts ~~basis~~ of ~~historical~~cash ~~operations.~~and Ascash aequivalents ~~consequence,~~and itmarketable issecurities ~~difficult,~~which ifwe ~~not~~may ~~impossible,~~use to ~~forecast~~fund our ~~future~~operations ~~results~~and ~~based~~make investments, ~~upon~~the ~~our~~COVID-19 ~~historical~~pandemic ~~data.~~has ~~Reliance~~had ona ~~our~~significant ~~historical~~impact ~~results~~on ~~may~~credit ~~not~~markets, bewhich ~~representative~~may ofadversely ~~the~~affect ~~results~~our weability ~~will~~to ~~achieve,~~access ~~and for~~third-party ~~certain~~financing. ~~areas~~Given inour ~~which~~substantial wecash ~~operate~~balances, ~~will~~we do not beanticipate ~~indicative~~that atour ~~all.~~future ~~Because~~liquidity ofwill ~~the~~be ~~uncertainties~~materially ~~related~~impacted toby ~~our lack of historical~~any ~~operations,~~funding weobligations ~~may~~related beto ~~hindered in~~ our ~~ability~~affiliates. Due to ~~anticipate~~the ~~and~~impairment ~~timely~~in ~~adapt~~our toaviation ~~increases~~deposits orheld ~~decreases~~by inWright ~~sales~~Brothers, ~~product~~the ~~costs~~Company orwill ~~expenses.~~cease Ifrecognizing weany ~~make~~related ~~poor~~revenue ~~budgetary~~in ~~decisions~~future asperiods. aStill, ~~result~~the ofCompany ~~unreliable~~does ~~historical~~not ~~data,~~believe wethis ~~could~~will beaffect ~~less~~its ~~profitable or incur~~overall ~~losses,~~future ~~which~~liquidity. ~~may~~Our ~~result~~future inliquidity awill ~~decline~~be inaffected ~~our~~by, ~~stock~~among ~~price.~~other things:

We• ~~have~~our anfuture ~~evolving~~access ~~business~~to ~~model, which increases the complexity of our business.~~capital;

~~Our~~• business model has evolved in the past and continues to do so. In prior years we have added additional types of services and product offerings and, in some cases, we have modified or discontinued those offerings. We intend to continue to try to offer additional types of products or services, and we do not know whether any of them will be successful. From time to time, we have also modified aspects of our ~~business~~exploration ~~model relating to our product mix. We do not know whether these or any other modifications will be successful. The additions~~ and ~~modifications to~~evaluation ~~our business have increased the complexity~~ of ~~our~~strategic ~~business~~alternatives and ~~placed~~development significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of ~~our business are likely to have similar effects. Further, any~~ new ~~business~~operating ~~or website we launch that is not favorably received by the market could damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our business.~~assets;

We• ~~are a holding company whose subsidiaries are given certain degree of independence and~~ our ~~failure~~ability to ~~integrate~~collect on our ~~subsidiaries~~commercial ~~may~~loans ~~adversely~~and ~~affect~~advances ~~our financial condition.~~receivable;

We• ~~have given our subsidiary companies and their executives a certain degree of independence in decision-making. On~~ the ~~one~~liquidity ~~hand, this independence may increase the sense of ownership at all levels, on the other hand, it has also increased the difficulty of the integration of operation~~ and ~~management, which~~fair ~~has~~value ~~resulted in increased difficulty~~ of ~~management integration. In the event we are not able to successfully manage~~ our ~~subsidiaries, this~~debt ~~will result in operating difficulties~~ and ~~have~~equity asecurities; ~~negative impact on our business.~~and

~~Acquisition~~• ~~Risks~~our ongoing operating expenses.

IfUses weand ~~make~~Sources ~~any~~of ~~additional acquisitions, they may disrupt or have a negative impact on our business.~~Cash

WeCash ~~have~~Flows ~~plans~~from toOperating eventually make additional acquisitions beyond the LuxeMark Acquisition. Whenever we make acquisitions, we could have difficulty integrating the acquired companies’ personnel and operations with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees, and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:Activities

·We ~~difficulty~~used of$96,000 ~~integrating~~and ~~acquired~~generated ~~products~~$2, ~~services~~080,000 of orcash ~~operations;~~from ·operating ~~potential~~activities ~~disruption~~during of the ~~ongoing~~six ~~businesses~~months ended December 31, 2020 and ~~distraction~~2019, ofrespectively. ~~our~~Operating ~~management~~cash ~~and~~used during the ~~management~~six ofmonths ~~acquired~~ended ~~companies;~~December ·31, ~~difficulty~~2020 ofwas ~~incorporating~~primarily ~~acquired~~attributable ~~rights~~to orincome ~~products~~from ~~into~~operations, ~~our~~adjusted ~~existing~~for ~~business;~~advance ·loss ~~difficulties~~provisions, realized inand ~~disposing~~unrealized gains on investments, and the timing of collection of interest income. Operating cash generated during the ~~excess~~six ormonths ~~idle~~ended ~~facilities~~December of31, an2019 ~~acquired~~was ~~company~~primarily orattributable ~~business~~to ~~and~~cash ~~expenses~~income ingenerated ~~maintaining~~by ~~such~~our ~~facilities;~~operations and investments exceeding our operating costs.

3233

·Cash ~~difficulties~~Flows in maintaining uniform standards, controls, procedures, and policies; · potential impairment of relationships with employees and customers as a result of any integration of new management personnel; · potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers; · effect of any government regulations which relate to the business acquired; and · potential unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition, or modify the marketing and sales of acquired products or the defense of any litigation, whether or not successful, resulting from ~~actions~~Investing ~~of the acquired company prior to our acquisition.~~Activities

During the six months ended December 31, 2020, we generated $7,072,000 of cash, net, from investing activities. Our ~~business~~net ~~could~~cash beinflows ~~severely~~were ~~impaired~~primarily driven by liquidations ifof $10,625,000 more in debt and toequity securities than investments during the ~~extent~~six ~~that~~months weended ~~are~~December 31, ~~unable~~2020. toWe ~~succeed~~also collected $1,850,000 more in ~~addressing~~mortgage ~~any~~and ofcommercial ~~these~~loans ~~risks~~receivable orthan ~~other~~we ~~problems~~funded ~~encountered~~during inthe ~~connection~~six months ended December 31, ~~with~~2020. ~~these~~We ~~acquisitions~~funded $1,277,000 ~~many~~more ofin ~~which~~aviation ~~cannot~~advances beand ~~presently~~MCAs ~~identified~~than we collected during the six months ended December 31, 2020. Additionally, ~~These~~we ~~risks~~invested ~~and~~$3,850,000 ~~problems~~in ~~could~~an ~~disrupt~~equity ~~our~~method ~~ongoing~~subsidiary ~~business~~during the six months ended December 31, 2020. Remaining ~~distract~~investing ~~our~~cash ~~management~~outflows ~~and~~during ~~employees~~the six months ended December 31, ~~increase~~2020 resulted from our ~~expenses~~purchase of a small minority interest in an operating business, and ~~adversely~~from ~~affect~~ our ~~results~~continued ofinvestment ~~operations~~in land parcels for development and resale.

NoDuring ~~assurance~~the six months ended December 31, 2019, we generated $1,893,000 of ~~successful~~cash, ~~expansion~~net, from investing activities. Our net cash inflows were primarily driven by liquidations of ~~operations~~$2,384,000 more in debt and equity securities than investments during the period. Partially offsetting the net cash inflows from debt and equity securities, we funded $196,000 more in mortgage and commercial loans than we collected during the period, primarily attributable to new loans that we made to Funders. Remaining investing cash outflows during the six months ended December 31, 2019 resulted from our purchase of land parcels for development and resale.

~~Our~~Cash ~~increase~~Flows infrom ~~the~~Financing scope and the scale of our operations, including the hiring of additional personnel, has resulted in higher operating expenses. We anticipate that our operating expenses will continue to increase. Expansion of our operations may also make significant demands on our management, finances, and other resources. Our ability to manage the anticipated future growth, should it occur, will depend upon a significant expansion of our accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures, and controls. We cannot assure that significant problems in these areas will not occur. Failure to expand these areas and implement and improve such systems, procedures, and controls in an efficient manner at a pace consistent with our business could have a material adverse effect on our business, financial condition, and results of operations. We cannot assure that attempts to expand our marketing, sales, manufacturing, and customer support efforts will succeed or generate additional sales or profits in any future period. As a result of the expansion of our operations and the anticipated increase in our operating expenses, along with the difficulty in forecasting revenue levels, we expect to continue to experience significant fluctuations in our results of operations.Activities

~~MCA~~During ~~Risks~~the six months ended December 31, 2020, we used $59,000 of cash for financing activities for distributions to the non-controlling interest and used $2,000 in cash for financing activities for payment of accrued dividends related to restricted stock releases.

~~The~~During ~~MCA~~the ~~industry~~six ~~faces~~months ~~potential~~ended ~~regulation~~December 31, 2019, ~~from~~we ~~the~~used ~~U.S. Department~~$1,000 of ~~Treasury~~cash for financing activities for payment of accrued dividends related to restricted stock releases.

With the growing emergence of MCA providers and concerns raised by small business advocacy groups, the U.S. Department of Treasury (the “Treasury”) released a statement outlining its objectives regarding small business financing, calling for more robust small business borrower protections and effective oversight, with commentators arguing that small businesses should receive enhanced protections. The statement also details the Treasury’s desire to expand small business access to capital through partnerships between traditional and non-traditional lenders. The Treasury highlights two possible types of partnerships: (i) a referral partnership in which merchants that are unable to meet certain criteria or seeking products not offered by their financial institution are directed to an MCA provider or other alternative financing provider and (ii) co-branded or white-label partnerships, where financial institutions contract with non-traditional lenders to integrate technology services.Liquidity

~~The~~We ~~legal~~had ~~requirements~~working ~~applicable~~capital to(current ~~both~~assets less ~~non-traditional~~current ~~and~~liabilities) ~~traditional financing institutions may vary depending on the type~~ of ~~partnership~~$43.1 ~~These~~million ~~laws~~as ~~may~~of ~~include~~December ~~consumer protection~~31, ~~statutes and regulations~~2020, ~~anti-money~~compared ~~laundering~~to ~~regulations,~~working ~~and~~capital ~~fair~~of ~~lending~~$51.0 ~~requirements,~~million inas ~~addition~~of toJune ~~relevant~~30, 2020. ~~state~~While ~~laws~~the orloss ~~regulations.~~of ~~Before~~the ~~engaging~~Company’s inaviation ~~these~~deposits ~~partnerships,~~had ~~traditional~~a ~~financiers~~significant ~~may~~impact ~~request~~on ~~all~~working ~~transactions~~capital beduring ~~monitored by~~ the ~~institutions’~~quarter, ~~prudential regulator to~~ the ~~extent~~Company’s working ancapital ~~MCA~~remains ~~provider~~strong isand ~~performing~~sufficient ~~functions~~to execute on ~~behalf~~its ofstated ~~the~~business ~~financial institution~~plans. AnAs ~~increasing number~~ of ~~partnerships~~December ~~may~~31, ~~cause~~2020, ~~the~~we ~~Treasury~~had tono ~~re-examine~~material commitments ~~registration requirements~~ for ~~non-traditional financing~~capital ~~lenders, including MCA providers~~expenditures.

33As of December 31, 2020, less than 0.1% of our cash was in foreign accounts, and there is no expectation that any foreign cash would need to be transferred from these foreign accounts to cover U.S. operations in the next 12 months. Based upon our existing cash balances, equity securities, and available-for-sale investments, historical cash usage, and anticipated operating cash flow in the current fiscal year, we believe that existing U.S. cash balances will be sufficient to meet our anticipated working capital requirements for at least the next 12 months from the issuance date of this report.

IfOff-Balance ~~our~~Sheet ~~MCA transactions are characterized as loans, we face potential legal and financial risks.~~Arrangements

AsWe ~~the~~had ~~MCA~~no ~~industry~~material has gained popularity, more focus has been placed on the contractual obligations in MCA agreements. An ambiguous and unclear contract may result in the transaction being regarded as a loan. Currently, the common law rules in each state, generally, hold that an unconditional repayment obligation classifies an advance as a “loan.” An MCA that is classified as a “loan” creates potential legal and financial risks, including, but not limited to: (i) nonoff-~~compliance~~balance ~~with~~sheet ~~federal and state regulations; (ii) breach of good~~arrangements ~~faith and classification~~ as ~~an unconscionable contract; and (iii) non-possession~~ of ~~the required lending licenses. In order to prevent an MCA from being classified as a “loan~~December 31,” we take the following actions: (i) create a clear and unambiguous agreement between a funder and a merchant; (ii) establish conditional and non-illusory repayment terms that are contingent on the future sales receipts of a merchant; (iii) restrict the use of collateral and the requirement of absolute repayment; and (iv) ensure the conditional repayment obligations for both the business and the personal guaranty are equivalent2020. ~~Notwithstanding the steps we take to clarify that our MCA transactions are not loans, courts may interpret our agreements differently.~~

~~Our~~Recent ~~MCA~~Accounting ~~transactions are subject to the ability of merchants to continue to make payments.~~Guidance

~~The~~See ~~amount~~“Note of2. ~~customer~~Recent ~~purchases~~Accounting ~~at a given~~Guidance,” ~~business tends~~ to ~~change~~the ~~rather~~accompanying ~~frequently,~~consolidated ~~with~~financial ~~fluctuations~~statements ~~occurring~~for ~~daily.~~a ~~Therefore,~~full ~~there~~description isof norecent ~~guarantee~~accounting ~~that a certain daily payment~~standards, asincluding ~~agreed to in~~ the ~~terms,~~respective expected ~~will~~dates ~~remain stable, if at all. The volatility~~ of ~~the~~adoption ~~market~~ and ~~conditional repayment terms of an MCA can cause~~ the expected ~~repayment~~effects ~~term~~on toour ~~vary.~~consolidated Anresults ~~MCA may result in a loss or total loss within a short period~~ of ~~time~~operations ~~if a merchant is unable to maintain its business. Such volatility stems from various sources, including market information, supply~~ and ~~demand~~financial ~~for a particular product, and national and international news~~condition.

~~Due diligence in MCA transactions is not as stringent as that of traditional loans, which presents a greater risk of fraud and inaccurate valuations.~~34

~~The~~Cautionary ~~required~~Statement ~~information~~Regarding toForward-Looking be provided by a merchant for an MCA is less stringent and differs from that provided for traditional capital advances and loans from institutional lenders, giving rise to numerous risks. These risks include, but are not limited to, a Funder receiving fraudulent or inaccurate financial data from a merchant, entering into a transaction with a merchant who has historical and/or current credit related issues, and facing market shifts which may outdate the market research a Funder uses to create its approval methodology. Although the Uniform Commercial Code governs MCA transactions as commercial transactions and provides for certain legal protections, the lack of collateral required in MCA transactions presents a risk of total and unrecoverable loss.Statements

WeCertain ~~face~~statements ~~risks~~made or incorporated by ~~using~~reference ~~Automated~~in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning ~~Clearing~~of ~~House~~the 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, our future performance, payment of dividends, ability to utilize our net deferred tax assets and availability of earnings and profits with respect to dividend income, as well as our 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. Examples of our forward-looking statements in this report include, but are not limited to, the duration and impact of the illness caused by the COVID-19 pandemic on the Company’s business plans and expected operating results, the ability of the Board of Directors and the Asset Management Committee of the Board of Directors (the “~~ACH~~Asset Management Committee”) ~~payments~~to identify suitable business opportunities and acquisition targets and the Company’s ability to consummate transactions with such acquisition targets; our ability to successfully develop our real estate operations; the future of our MCA and other financial services operations; the impact of any strategic initiatives we may undertake; the impact of the current reestablishment of and potential for future release of our tax valuation allowances on future income tax provisions and income taxes paid; our expected level of capital additions; our expected cash position; the impact of interest rate changes and fluctuation in currency exchange rates; our sufficiency of cash; the impact of litigation; and the payment of any declared dividends. These statements are based on beliefs and assumptions of our management, which are based on currently available information. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. The risks and uncertainties which could affect our financial condition or results of operations include, without limitation: the process of evaluating strategic alternatives; the Company’s ability to compete with experienced investors in the acquisition of one or more additional businesses; our ability to utilize our NOLs to offset cash taxes, in general, and in the event of an ownership change as defined by the Internal Revenue Service (the “IRS”); changes in and related uncertainties caused by changes in applicable tax laws; the current macroeconomic environment generally and with respect to acquisitions and the financing thereof; continuing unevenness of the global economic recovery; the availability of debt or equity financing to support any liquidity needs; global terrorism; and earthquakes, tsunamis, floods, pandemics, and other natural disasters.

~~ACH~~Our ~~transactions~~forward-looking ~~are~~statements ~~payments that~~ are ~~electronically~~based ~~transferred~~on ~~from~~current ~~one~~expectations ~~verified~~and ~~bank~~speak ~~account~~only toas ~~another.~~of ~~ACH~~the ~~payments~~date ~~are~~of ~~used~~such ~~by funders to debit a merchant’s account~~statements. ~~The time~~We ~~difference~~undertake ~~between~~no ~~when~~obligation ~~an ACH payment is initiated and when it is settled is referred~~ to aspublicly ~~“floating.”~~update ~~The~~or ~~floating~~revise ~~time~~any ~~when~~forward-looking ~~participating~~statement, inwhether anas ~~MCA originated by~~ a ~~funder~~result isof ~~approximately~~future 11events, ~~days.~~new ~~ACH payments are not guaranteed to a funder and can be returned. Thus~~information, weor ~~must take the floating time into consideration when calculating collections. In addition~~otherwise, ~~there~~except ~~is an~~as ~~inherent risk that a merchant’s ACH payment~~ may be ~~denied~~required ~~and a funder may not receive a payment from a merchant when~~by ~~due~~applicable law.

34Other important risk factors that could cause actual results to differ from any forward-looking statements made in this report are discussed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020 and in “Item 1A. Risk Factors” in this report or elsewhere herein.

Item 63. ~~Exhibits~~Quantitative and Qualitative Disclosures About Market Risk

Exhibit No.		Description of Document
3.1		Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-2 (File No. 33-62440)).
3.2		Certificate of Amendment of the Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Proxy on Form DEFR14A filed on June 2, 2008 (File No. 001-13150)).
3.3		Certificate of Amendment to its Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2011 (File No. 000-13150)).
3.4		Certificate of Correction to Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002 (File No. 000-13150)).
3.5		Amended Certificate of Designations of Series A Participating Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A, dated August 9, 2002 (File No. 000-13150)).
3.6		Amendment to Amended Certificate of Designations of Series A Participating Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A, dated August 9, 2002) (File No. 000-13150).
3.7		Certificate of Designations of Series B Preferred Stock (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 1, 2016).
3.8		Certificate of Amendment to the Restated Certificate of Incorporation of Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 7, 2016).
3.9		Certificate of Elimination of Series B Participating Preferred Stock of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 7, 2016).
3.10		Certificate of Amendment to the Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on October 31, 2017).
3.11		Amended and Restated Bylaws of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on January 5, 2018).
3.12		Certificate of Amendment to Restated Certificate of Incorporation dated as of January 2, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on January 5, 2018).
3.13		Certificate of Amendment to Restated Certificate of Incorporation dated as of November 8, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 13, 2018).
10.1		Amendment to Operating Agreement of LM Capital Solutions, LLC by and among LM Capital Solutions, LLC, AZOKKB LLC, CCUR Holdings, Inc., Igor Volshteyn, Warren Sutherland and Oskar Kowalski (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).
10.2		Waiver and Release Agreement by and among AZOKKB LLC, LM Capital Solutions, LLC, Avraham Zeines, Oskar Kowalski and Kamil Blaszczak, dated as of July 17, 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).

Pursuant to Item 305(e) of Regulation S-K (Section 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company” as defined by Rule 229.10(f)(1).

35Item 4. Controls and Procedures

10.3		Omnibus Termination of Common Stock Warrants by and among CCUR Holdings, Inc. Avraham Zeines, Oskar Kowalski and Kamil Blaszczak, dated as of July 17, 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).
10.4+		Assignment and Assumption Agreement by and between LM Capital Solutions, LLC and AZOKKB LLC, dated as of July 17, 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).
10.5		Amendment to Master Promissory Note by and between CCUR Holdings, Inc. and LM Capital Solutions, LLC, dated as of July 17, 2020 (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).
10.6*#		Engagement Letter Between Brio Financial Group and CCUR Holdings, Inc., dated September 29, 2020.
10.7*#		Severance Agreement Between Warren Sutherland and CCUR Holdings, Inc., dated October 1, 2020.
10.8*		Amendment to Amended Management Agreement, dated October 15, 2020.
31.1*		Certification of Principal Executive Officer, Pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer, Pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		XBRL Instance Document.
101.SCH*		XBRL Taxonomy Extension Schema Document.
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

Evaluation of Disclosure Controls and Procedures

*We ~~Filed~~maintain ~~herewith~~disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic and current reports that we file with the SEC is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

** Furnished herewith35

#As ~~Indicates~~of December 31, 2020, under the supervision and with the participation of our management, ~~contract~~including orour ~~compensatory~~President ~~plan~~and CFO, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Securities Exchange Act of 1934, as amended (the “Exchange Act”) Rules 13a-15(e) and 15d-15(e). Based upon that evaluation, our President and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020.

+Changes ~~Certain~~in ~~confidential~~Internal Control ~~portions~~Over ofFinancial ~~this exhibit have been omitted pursuant to Item 601(b) of Regulation S-K.~~Reporting

36There have been no changes in our internal controls over financial reporting as such term is defined in the Exchange Act Rules 13a-15(e) and 15d-15(e) during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

~~SIGNATURES~~36

~~Pursuant to the requirements~~Part II of- ~~the~~Other ~~Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~Information

Date: November 9, 2020		CCUR HOLDINGS, INC.
	By:	/s/ Igor Volshteyn
		Igor Volshteyn
		President and Chief Operating Officer
		(Principal Executive Officer and Principal Financial Officer)
	By:	/s/ Jonathan Tegge
		Jonathan Tegge
		Chief Financial Officer
		(Principal Accounting Officer)

Item 1.

Legal Proceedings

37We are, from time to time, party to various routine legal proceedings arising out of our business. While the resolution of any such matter cannot be predicted with certainty, we are not presently involved in any litigation, nor is any legal proceeding currently threatened against us, that we believe, individually or in the aggregate, would have a material adverse effect on our business, financial condition, or results of operations.

Item 1A.

Risk Factors

Our business is subject to risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. Except as noted below, our risk factors have not changed materially from those described in “Part I, Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2020, filed with the SEC on September 15, 2020.

General Business Risks

The Company may be classified as an inadvertent investment company if we acquire investment securities in excess of 40% of our total assets.

An inadvertent investment company can avoid being classified as an investment company if it can rely on one of the exclusions under the ICA. One such exclusion, Rule 3a-2 under the ICA, allows an inadvertent investment company a grace period of one year from the earlier of (i) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis, and (ii) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis. We are putting in place policies that we expect will work to keep the investment securities held by us at less than 40% of our total assets, which may include selling certain of our investments on disadvantageous terms, holding a greater proportion of our investments in marketable securities in U.S. government securities or cash equivalents that have a lower rate of return than other investment securities, or making other material modifications to our business operations and strategy, any or all of which could have a material adverse effect on our business, financial condition, results of operations, and future prospects.

As Rule 3a-2 is available to a company no more than once every three years, and assuming no other exclusion were available to us, we would have to keep within the 40% limit for at least three years after we ceased being an inadvertent investment company. This may limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on our earnings. In any event, we do not intend to become an investment company engaged in the business of investing and trading securities.

The Board of Directors and management regularly monitor the Company’s status relative to the inadvertent investment company test under the ICA and believe that the Company is not, currently or as of December 31, 2020, an inadvertent investment company based on the assets test under Section 3(a)(1)(C) of the ICA. The effects of the COVID-19 pandemic and resulting economic downturn have adversely impacted the Company’s acquisition activities due to the reduced level of merger and acquisition activity and the difficulty for buyers and sellers to agree on valuations and transaction terms.

Classification as an investment company under the ICA requires registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time-consuming and restrictive and would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons, and portfolio composition, and would need to file reports under the ICA regime. The cost of such compliance would result in our incurring substantial additional expenses, and the failure to register if required would have a materially adverse impact to conduct our operations. We do not believe that it would be practical or feasible for a company of our size, management, and financial resources to operate as a registered investment company.

Our limited operating history makes it difficult to evaluate our future business prospects and to make decisions based on our historical performance.

Although our executive officers have been engaged in the industries in which we operate for varying degrees of time, we did not begin operations of our current business until recently. We have a very limited operating history in our current form, which makes it difficult to evaluate our business on the basis of historical operations. As a consequence, it is difficult, if not impossible, to forecast our future results based upon our historical data. Reliance on our historical results may not be representative of the results we will achieve, and for certain areas in which we operate, will not be indicative at all. Because of the uncertainties related to our lack of historical operations, we may be hindered in our ability to anticipate and timely adapt to increases or decreases in sales, product costs or expenses. If we make poor budgetary decisions as a result of unreliable historical data, we could be less profitable or incur losses, which may result in a decline in our stock price.

We have an evolving business model, which increases the complexity of our business.

Our business model has evolved in the past and continues to do so. In prior years we have added additional types of services and product offerings and, in some cases, we have modified or discontinued those offerings. We intend to continue to try to offer additional types of products or services, and we do not know whether any of them will be successful. From time to time, we have also modified aspects of our business model relating to our product mix. We do not know whether these or any other modifications will be successful. The additions and modifications to our business have increased the complexity of our business and placed significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. Future additions to or modifications of our business are likely to have similar effects. Further, any new business or website we launch that is not favorably received by the market could damage our reputation or our brand. The occurrence of any of the foregoing could have a material adverse effect on our business.

We are a holding company whose subsidiaries are given certain degree of independence and our failure to integrate our subsidiaries may adversely affect our financial condition.

We have given our subsidiary companies and their executives a certain degree of independence in decision-making. On the one hand, this independence may increase the sense of ownership at all levels, on the other hand, it has also increased the difficulty of the integration of operation and management, which has resulted in increased difficulty of management integration. In the event we are not able to successfully manage our subsidiaries, this will result in operating difficulties and have a negative impact on our business.

Acquisition Risks

If we make any additional acquisitions, they may disrupt or have a negative impact on our business.

We have plans to eventually make additional acquisitions beyond the LuxeMark Acquisition. Whenever we make acquisitions, we could have difficulty integrating the acquired companies’ personnel and operations with our own. In addition, the key personnel of the acquired business may not be willing to work for us. We cannot predict the effect expansion may have on our core business. Regardless of whether we are successful in making an acquisition, the negotiations could disrupt our ongoing business, distract our management and employees, and increase our expenses. In addition to the risks described above, acquisitions are accompanied by a number of inherent risks, including, without limitation, the following:

	·	difficulty of integrating acquired products, services, or operations;
	·	potential disruption of the ongoing businesses and distraction of our management and the management of acquired companies;
	·	difficulty of incorporating acquired rights or products into our existing business;
	·	difficulties in disposing of the excess or idle facilities of an acquired company or business and expenses in maintaining such facilities;
	·	difficulties in maintaining uniform standards, controls, procedures, and policies;
	·	potential impairment of relationships with employees and customers as a result of any integration of new management personnel;
	·	potential inability or failure to achieve additional sales and enhance our customer base through cross-marketing of the products to new and existing customers;
	·	effect of any government regulations which relate to the business acquired; and
	·	potential unknown liabilities associated with acquired businesses or product lines, or the need to spend significant amounts to retool, reposition, or modify the marketing and sales of acquired products or the defense of any litigation, whether or not successful, resulting from actions of the acquired company prior to our acquisition.

Our business could be severely impaired if and to the extent that we are unable to succeed in addressing any of these risks or other problems encountered in connection with these acquisitions, many of which cannot be presently identified. These risks and problems could disrupt our ongoing business, distract our management and employees, increase our expenses, and adversely affect our results of operations.

No assurance of successful expansion of operations.

Our increase in the scope and the scale of our operations, including the hiring of additional personnel, has resulted in higher operating expenses. We anticipate that our operating expenses will continue to increase. Expansion of our operations may also make significant demands on our management, finances, and other resources. Our ability to manage the anticipated future growth, should it occur, will depend upon a significant expansion of our accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures, and controls. We cannot assure that significant problems in these areas will not occur. Failure to expand these areas and implement and improve such systems, procedures, and controls in an efficient manner at a pace consistent with our business could have a material adverse effect on our business, financial condition, and results of operations. We cannot assure that attempts to expand our marketing, sales, manufacturing, and customer support efforts will succeed or generate additional sales or profits in any future period. As a result of the expansion of our operations and the anticipated increase in our operating expenses, along with the difficulty in forecasting revenue levels, we expect to continue to experience significant fluctuations in our results of operations.

MCA Risks

The MCA industry faces potential regulation from the U.S. Department of Treasury.

The legal requirements applicable to both non-traditional and traditional financing institutions may vary depending on the type of partnership. These laws may include consumer protection statutes and regulations, anti-money laundering regulations, and fair lending requirements, in addition to relevant state laws or regulations. Before engaging in these partnerships, traditional financiers may request all transactions be monitored by the institutions’ prudential regulator to the extent an MCA provider is performing functions on behalf of the financial institution. An increasing number of partnerships may cause the Treasury to re-examine registration requirements for non-traditional financing lenders, including MCA providers.

If our MCA transactions are characterized as loans, we face potential legal and financial risks.

As the MCA industry has gained popularity, more focus has been placed on the contractual obligations in MCA agreements. An ambiguous and unclear contract may result in the transaction being regarded as a loan. Currently, the common law rules in each state, generally, hold that an unconditional repayment obligation classifies an advance as a “loan.” An MCA that is classified as a “loan” creates potential legal and financial risks, including, but not limited to: (i) non-compliance with federal and state regulations; (ii) breach of good faith and classification as an unconscionable contract; and (iii) non-possession of the required lending licenses. In order to prevent an MCA from being classified as a “loan,” we take the following actions: (i) create a clear and unambiguous agreement between a funder and a merchant; (ii) establish conditional and non-illusory repayment terms that are contingent on the future sales receipts of a merchant; (iii) restrict the use of collateral and the requirement of absolute repayment; and (iv) ensure the conditional repayment obligations for both the business and the personal guaranty are equivalent. Notwithstanding the steps we take to clarify that our MCA transactions are not loans, courts may interpret our agreements differently.

Our MCA transactions are subject to the ability of merchants to continue to make payments.

The amount of customer purchases at a given business tends to change rather frequently, with fluctuations occurring daily. Therefore, there is no guarantee that a certain daily payment, as agreed to in the terms, will remain stable, if at all. The volatility of the market and conditional repayment terms of an MCA can cause the expected repayment term to vary. An MCA may result in a loss or total loss within a short period of time if a merchant is unable to maintain its business. Such volatility stems from various sources, including market information, supply and demand for a particular product, and national and international news.

Due diligence in MCA transactions is not as stringent as that of traditional loans, which presents a greater risk of fraud and inaccurate valuations.

The required information to be provided by a merchant for an MCA is less stringent and differs from that provided for traditional capital advances and loans from institutional lenders, giving rise to numerous risks. These risks include, but are not limited to, a Funder receiving fraudulent or inaccurate financial data from a merchant, entering into a transaction with a merchant who has historical and/or current credit related issues, and facing market shifts which may outdate the market research a Funder uses to create its approval methodology. Although the Uniform Commercial Code governs MCA transactions as commercial transactions and provides for certain legal protections, the lack of collateral required in MCA transactions presents a risk of total and unrecoverable loss.

We face risks by using Automated Clearing House (“ACH”) payments.

ACH transactions are payments that are electronically transferred from one verified bank account to another. ACH payments are used by funders to debit a merchant’s account. The time difference between when an ACH payment is initiated and when it is settled is referred to as “floating.” The floating time when participating in an MCA originated by a funder is approximately 11 days. ACH payments are not guaranteed to a funder and can be returned. Thus, we must take the floating time into consideration when calculating collections. In addition, there is an inherent risk that a merchant’s ACH payment may be denied and a funder may not receive a payment from a merchant when due.

Item 6.

Exhibits

Exhibit No.	Description of Document

3.1	Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-2 (File No. 33-62440)).

3.2	Certificate of Amendment of the Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Proxy on Form DEFR14A filed on June 2, 2008 (File No. 001-13150)).

3.3	Certificate of Amendment to its Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on June 30, 2011 (File No. 000-13150)).

3.4	Certificate of Correction to Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2002 (File No. 000-13150)).

3.5	Amended Certificate of Designations of Series A Participating Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A, dated August 9, 2002 (File No. 000-13150)).

3.6	Amendment to Amended Certificate of Designations of Series A Participating Cumulative Preferred Stock (incorporated by reference to the Form 8-A/A, dated August 9, 2002) (File No. 000-13150).

3.7	Certificate of Designations of Series B Preferred Stock (incorporated by reference to the Company’s Current Report on Form 8-K filed on March 1, 2016).

3.8	Certificate of Amendment to the Restated Certificate of Incorporation of Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 7, 2016).

3.9	Certificate of Elimination of Series B Participating Preferred Stock of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 7, 2016).

3.10	Certificate of Amendment to the Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on October 31, 2017).

3.11	Amended and Restated Bylaws of the Company (incorporated by reference to the Company’s Current Report on Form 8-K filed on January 5, 2018).

3.12	Certificate of Amendment to Restated Certificate of Incorporation dated as of January 2, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on January 5, 2018).

3.13	Certificate of Amendment to Restated Certificate of Incorporation dated as of November 8, 2018 (incorporated by reference to the Company’s Current Report on Form 8-K filed on November 13, 2018).

10.1	Amendment to Operating Agreement of LM Capital Solutions, LLC by and among LM Capital Solutions, LLC, AZOKKB LLC, CCUR Holdings, Inc., Igor Volshteyn, Warren Sutherland and Oskar Kowalski (incorporated by reference to the Company’s Current Report on Form 8-K filed on July 22, 2020).

10.6*	Amendment to Amended Management Agreement, dated January 6, 2021

31.1*	Certification of Principal Executive Officer, Pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*	Certification of Principal Financial Officer, Pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*	XBRL Instance Document.

101.SCH*	XBRL Taxonomy Extension Schema Document.

101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

Filed herewith

^**

Furnished herewith

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 thereunto duly authorized.

Date: February 16, 2021

CCUR HOLDINGS, INC.

	By:	/s/ Igor Volshteyn
		Igor Volshteyn
		President and Chief Operating Officer
		(Principal Executive Officer and Principal Financial Officer)

	By:	/s/ Jonathan Tegge
		Jonathan Tegge
		Chief Financial Officer
		(Principal Accounting Officer)

Filing Compare · CCUR Holdings, Inc.