Segment Reporting

6 Months Ended

Jun. 30, 2012

Segment Reporting Disclosure [Text Block]

NOTE 12 – Segment Reporting

          The Company operates in three business segments, Capital Markets, DirectMarkets and Merchant Banking. The Capital Markets reportable segment includes the Company’s investment banking, sales and trading activities and research. The Capital Markets reportable segment is managed as a single operating segment that provides the following principal sources of revenue:

• investment banking fees, which are derived from corporate finance activities and strategic advisory services;

• realized and unrealized gains with respect to securities held for the Company’s own account;

• commissions on sales and trading activities;

• conference fees; and

• other miscellaneous sources of revenues, such as interest.

          Although the Company has multiple sources of revenue derived within Capital Markets, most of its revenue is derived from investment banking services and consists of private placement, underwriting and strategic advisory fees earned upon the successful completion of financing or other types of corporate transactions, such as mergers, acquisitions and dispositions..

          The DirectMarkets segment is comprised of operating activities related to the DirectMarkets platform. This year the Company introduced the DirectMarkets platform, the first-ever 24/7 automated electronic transaction platform that will link issuers with investors for primary offerings of securities by existing publicly-traded companies. The DirectMarkets platform was developed by the Company over the past several years, building on the expertise obtained in completing more than 580 financing transactions for public companies since 2002. During the last decade, capital-raising options and alternatives for public companies have evolved from traditional follow-on offerings to registered directs, at the market and confidentially marketed public offerings. Through this evolution, the issuer has gained more influence over the capital-raising process by acting on shorter notice and reducing its exposure to market volatility during the life of a deal. The DirectMarkets platform is the next and logical evolutionary step in empowering the issuer and bringing access to the capital markets directly into the C-Suite of public companies through an electronic interface linking public company issuers with investors.

          Total revenue for the three month and six month periods ended June 30, 2012 was and $0.4 million and $0.7 million, respectively, which came from non-investment banking advisory fees related to IRG assets recently acquired. The expenses relate to the non-capitalizable employee and other costs of developing and marketing the DirectMarkets platform.

          The Merchant Banking segment is primarily comprised of operating activities related to Aceras BioMedical. On May 12, 2008, the Company formed Aceras BioMedical, a joint venture through which it, in partnership with Aceras Partners, LLC, makes principal investments in early-stage biotechnology and life sciences companies. In conjunction with the establishment of the joint venture, the Company formed RPI, which holds a 50% stake in Aceras BioMedical and serves as the holding vehicle for all of its principal-related businesses. At June 30, 2012, $10.0 million of this commitment remained unfunded. RPI receives 50% of Aceras BioMedical’s economic interest in all investments made.

          The Company’s net revenues, expenses, and total assets by segment are summarized below (in millions of dollars):

	Capital Markets			Direct Markets			Merchant Banking			Total
2012
Three Months Ended June 30
Total revenues	$	6.4			0.4			(0.1	)		6.7
Expenses	$	12.6			2.2			1.0			15.8
Operating income (loss)	$	(6.2	)		(1.8	)		(1.1	)		(9.1	)
Segment assets	$	20.8			2.8			4.6			28.2
Six Months Ended June 30
Total revenues	$	36.6			0.7			(5.1	)		32.2
Expenses	$	33.4			4.1			1.8			39.3
Operating income (loss)	$	3.2			(3.4	)		(6.9	)		(7.1	)
Segment assets	$	20.8			2.8			4.6			28.2
2011
Three Months Ended June 30
Total revenues	$	15.9			—			—			15.9
Expenses	$	25.3			—			1.1			26.4
Operating loss	$	(9.4	)		—			(1.1	)		(10.5	)
Segment assets	$	68.5			—			9.9			78.4
Six Months Ended June 30
Total revenues	$	42.7			—			0.5			43.2
Expenses	$	52.1			—			1.9			54.0
Operating income (loss)	$	(9.4	)		—			(1.4	)		(10.8	)
Segment assets	$	68.5			—			9.9			78.4