XML 36 R25.htm IDEA: XBRL DOCUMENT

Commitments, Contingencies, and Other

6 Months Ended

Jun. 30, 2024

Commitments, Contingencies, and Other [Abstract]

Commitments, Contingencies, and Other

18. Commitments, Contingencies, and Other

Legal and Regulatory Matters

The Company is party to certain claims, suits and complaints arising in the ordinary course of business. As of June 30, 2024, the Company does not expect that these claims, suits and complaints will have a material impact on its results of operations or financial position.

On April 18, 2024, the Company received a notification from Nasdaq Regulation that the Company no longer complied with Nasdaq’s Listing Rules (the “Nasdaq Rules”) for continued listing, as a result of the Company’s failure to file its 2023 Form 10-K. The Company regained compliance with the Nasdaq Rules in connection with the filing of its 2023 Form 10-K on May 10, 2024.

Overnight Financing

As of both June 30, 2024 and December 31, 2023, MSCO had an available line of credit for short term overnight demand borrowing with BMO Harris Bank (“BMO Harris”) of up to $25 million. As of those dates, MSCO had no outstanding loan balance and there were no commitment fees or other restrictions on the line of credit. The Company utilizes customer or firm securities as a pledge for short-term borrowing needs. There was $1,000 and $0 in interest expense for this line of credit for the three months ended June 30, 2024 and 2023, respectively. There was $3,000 and $0 in interest expense for this line of credit for the six months ended June 30, 2024 and 2023, respectively. There were no fees related to this line of credit for the three or six months ended June 30, 2024 and 2023.

NFS Contract

Effective August 1, 2021, MSCO entered into an amendment to its clearing agreement with NFS that, among other things, extends the term of the arrangement for an additional four-year period commencing on August 1, 2021 and ending July 31, 2025. If the Company chooses to exit this agreement before the end of the contract term, the Company is under the obligation to pay an early termination fee upon occurrence pursuant to the table below:

Date of Termination		Early Termination Fee
Prior to August 1, 2024		$	4,500,000
Prior to August 1, 2025		$	3,250,000

For the three and six months ended June 30, 2024 and 2023, there has been no expense recognized for any early termination fees. The Company believes that it is unlikely it will have to make material payments related to early termination fees and has not recorded any contingent liability in the financial statements related to this arrangement.

Technology Vendor

The Company has entered into agreements with technology vendors for certain development projects related to its Retail Platform. As of June 30, 2024, the Company incurred costs of approximately $1.8 million for these vendors.

General Contingencies

The Company’s general contingencies are included in Note 21 – Commitments, Contingencies, and Other in the Company’s 2023 Form 10-K. Other than the below, there have been no material updates to the Company’s general contingencies during the three and six months ended June 30, 2024.

The Company is self-insured with respect to employee health claims. As part of this plan, the Company recognized expenses of $332,000 and $266,000 for the three months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024 and 2023, the Company recognized expenses of $726,000 and $446,000, respectively.

The Company had an accrual of $123,000 as of June 30, 2024, which represents the estimate of future expense to be recognized for claims incurred during the period.

The Company believes that its present insurance coverage and reserves are sufficient to cover currently estimated exposures, but there can be no assurance that the Company will not incur liabilities in excess of recorded reserves or in excess of its insurance limits.