Fifth Street Asset Management Inc.

CIK:0001611988|SEC Filings

Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
Consolidated Statements of Operations - USD ($)	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues
Management fees	$ 0	$ 730,507	$ 922,187	$ 2,162,419
Performance fees	0	38,661	0	124,836
Other fees	7,336	55,092	7,336	170,241
Total revenues	7,336	824,260	929,523	2,457,496
Expenses
Compensation and benefits	4,897,425	1,159,255	8,666,014	5,257,631
General, administrative and other expenses	2,465,138	2,943,495	8,829,906	9,366,081
Depreciation and amortization	342,476	349,475	977,655	3,925,519
Total expenses	7,705,039	4,452,225	18,473,575	18,549,231
Other income (expense)
Interest income	95,867	386,626	725,340	1,082,368
Interest expense	(46,778)	(140,457)	(344,062)	(525,985)
Income (loss) from equity method investments	(6,656,075)	1,576,215	(2,016,009)	3,554,541
Unrealized loss on MMKT Notes	0	(2,582,405)	0	0
Realized gain on settlement of MMKT Notes	0	2,592,751	0	2,592,751
Unrealized gain on beneficial interests in CLOs	654,915	537,600	983,434	169,373
Gain on extinguishment of debt	0	0	0	2,000,000
Gain on sale of CLO Management	5,583,112	0	4,642,815	0
Adjustment of TRA liability	12,608,166	0	12,515,818	7,525,901
Loss on impairment of fixed assets	(4,252,700)	0	(4,252,700)	0
Other income (expense), net	0	(75,728)	0	(620,514)
Total other income (expense), net	7,986,507	2,294,602	12,254,636	15,778,435
Income (loss) from continuing operations before provision for income taxes	288,804	(1,333,363)	(5,289,416)	(313,300)
Provision for income taxes	16,423,914	672,108	15,851,288	6,481,489
Net loss from continuing operations	(16,135,110)	(2,005,471)	(21,140,704)	(6,794,789)
Net income (loss) from discontinued operations, net of tax	(11,578,691)	12,185,290	(1,727,678)	10,051,045
Net income (loss)	(27,713,801)	10,179,819	(22,868,382)	3,256,256
Net (income) loss attributable to non-controlling interests	17,585,079	(10,417,537)	13,432,722	(3,878,297)
Net loss attributable to Fifth Street Asset Management Inc.	$ (10,128,722)	$ (237,718)	$ (9,435,660)	$ (622,041)
Class A Common Stock
Basic and diluted income (loss) per share:
Loss from continuing operations (in usd per share)	$ (0.49)	$ (0.47)	$ (0.57)	$ (0.01)
Income (loss) from discontinued operations (in usd per share)	(0.16)	0.43	(0.04)	(0.10)
Net loss attributable to Fifth Street Asset Management Inc. (in usd per share)	$ (0.65)	$ (0.04)	$ (0.61)	$ (0.11)
Weighted average shares of Class A common stock outstanding - basic and diluted (in shares)	15,649,686	5,908,407	15,498,388	5,847,139

Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities
Net loss	$ (21,140,704)	$ (6,794,789)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	765,335	3,713,200
Amortization of fractional interests in aircrafts	212,320	212,319
Realized gain on sale of CLO Management	(4,642,815)	0
Amortization of equity-based compensation	1,740,859	1,858,102
Write-off of MMKT capitalized software costs	0	624,512
Unrealized (gain) loss on beneficial interests in CLOs	(983,434)	(169,373)
Distributions of earnings from equity method investments	1,017,458	3,059,289
Interest income accreted on beneficial interest in CLOs	(725,321)	(1,082,342)
Loss on impairment of fixed assets	4,252,700	0
Deferred taxes	15,900,832	8,276,868
Deferred rent	(151,413)	(1,035,401)
Realized gain on MMKT Notes	0	(2,592,751)
Loss on lease abandonment	0	1,240,928
Gain on extinguishment of debt	0	(2,000,000)
Adjustment of TRA liability	(12,515,818)	(7,525,901)
(Income) loss from equity method investments	2,016,009	(3,554,541)
Changes in operating assets and liabilities:
Escrow receivable related to sale of CLO Management	(2,600,000)	0
Prepaid expenses	486,601	(1,723,695)
Due from affiliates	408,119	(535,519)
Other assets	70,130	433,531
Accounts payable and accrued expenses	4,216,929	832,003
Accrued compensation and benefits	(1,348,977)	(2,301,078)
Income taxes payable	(190,001)	(28,559)
Net cash provided by (used in) continuing operating activities	(12,674,685)	(9,031,649)
Net cash provided by discontinued operating activities	17,834,248	14,043,368
Net cash provided by (used in) continuing operating activities	5,159,563	5,011,719
Cash flows from investing activities
Purchases of fixed assets	(52,505)	(15,048)
Purchases of equity method investments	0	(37,548,532)
Redemptions of equity method investments - FSOF	666,563	6,000,000
Distributions from equity method investments - FSC and FSFR common stock	2,902,592	842,801
Proceeds from sale of CLO Management	16,534,067	0
Net cash provided by (used in) investing activities	20,050,717	(29,292,189)
Cash flows from financing activities
Proceeds from borrowings under credit facility	0	30,000,000
Repayments under credit facility	(9,850,000)	(3,000,000)
Deferred financing costs paid	(372,821)	0
Repayments of notes payable	0	(2,237,443)
Net cash provided by (used in) financing activities	(26,194,390)	11,233,099
Net decrease in cash	(984,110)	(13,047,371)
Cash, beginning of period	6,727,085	17,185,204
Cash, end of period	5,742,975	4,137,833
Supplemental disclosures of cash flow information:
Cash paid during the period for interest	3,789,461	2,857,564
Cash paid during the period for income taxes	190,001	251,236
Non-cash investing activities:
Non-cash contribution to FSOF	123,300	78,720
Non-cash distribution from FSOF	123,300	78,720
Non-cash financing activities:
Accrued dividends	744,768	1,126,478
Deemed capital contribution	0	5,810,794
Issuance of shares to settle derivative liability	0	3,267,160
Assumed liabilities in connection with sale of CLO Management	12,972,565	0
Increase in deferred tax assets as a result of exchange of Holdings LP Interests	30,599,203	0
Increase in amounts payable to related parties pursuant to tax receivable agreement	26,009,323	0
Affiliates
Changes in operating assets and liabilities:
Due to affiliates	0	4,314
Members
Cash flows from financing activities
Distributions to Holdings limited partners	(12,940,843)	(11,373,105)
Shareholders
Cash flows from financing activities
Dividends to Class A shareholders	(3,030,726)	(2,156,353)
Beneficial interests in CLOs
Cash flows from investing activities
Distributions from equity method investments - FSC and FSFR common stock	0	1,428,590
Management fees receivable
Changes in operating assets and liabilities:
Fees receivable	536,506	(55,947)
Performance fees receivable
Changes in operating assets and liabilities:
Fees receivable	0	21,062
August 2015 MMKT Notes \| Convertible Notes
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Interest expense on MMKT Notes	$ 0	$ 92,119

Consolidated Statements of Financial Condition - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and cash equivalents	$ 5,742,975	$ 6,727,085
Insurance recovery receivable	0	9,250,000
Escrow receivable related to sale of CLO Management	2,600,000	0
Prepaid expenses (includes $418,300 and $620,794 related to income taxes as of September 30, 2017 and December 31, 2016, respectively)	1,586,792	2,073,393
Investments in equity method investees	59,697,562	66,176,884
Due from affiliates	2,459,308	3,405,921
Fixed assets, net	378,802	5,344,332
Deferred tax assets	57,113,514	42,415,143
Deferred financing costs	0	1,426,103
Other assets	3,072,622	3,355,072
Total assets	141,637,850	178,798,861
Liabilities
Accounts payable and accrued expenses	14,477,440	5,260,511
Accrued compensation and benefits	11,167,520	12,516,497
Reserve for expenses reimbursable to affiliates	3,732,920	0
Income taxes payable	33,693	223,694
Loans payable	2,000,000	14,972,565
Legal settlement payable	0	9,250,000
Credit facility payable (net of $598,400 of deferred financing costs at September 30, 2017)	91,551,600	102,000,000
Dividends payable	744,768	1,961,863
Deferred rent liability	1,927,941	2,079,354
Total liabilities	175,146,000	184,285,151
Commitments and contingencies
Equity (deficit)
Preferred stock, $0.01 par value; 5,000,000 shares authorized; none issued and outstanding as of September 30, 2017 and December 31, 2016	0	0
Additional paid-in capital	6,499,818	6,354,291
Accumulated deficit	(11,161,721)	(1,726,061)
Total stockholders' equity (deficit), Fifth Street Asset Management Inc.	(4,162,551)	5,122,823
Non-controlling interests	(29,345,599)	(10,609,113)
Total deficit	(33,508,150)	(5,486,290)
Total liabilities and equity (deficit)	141,637,850	178,798,861
Class A Common Stock
Equity (deficit)
Common stock	156,497	66,024
Class B Common Stock
Equity (deficit)
Common stock	342,855	428,569
Affiliates
Liabilities
Due to related party	26,358	30,412
Recipients of Tax Receivable Agreements
Liabilities
Due to related party	49,483,760	35,990,255
Beneficial interests in CLOs
Assets
Beneficial interests in CLOs at fair value: (cost December 31, 2016: $24,138,496)	0	23,155,062
Management fees receivable
Assets
Management fees receivable	8,986,275	15,346,566
Performance fees receivable
Assets
Management fees receivable	$ 0	$ 123,300